Redundancy Modification Orders

John Bercow Excerpts

Wednesday 12th July 2017 Commons Chamber

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

rose—[Interruption.]

[Mr Speaker]

Order. I am saddened by the speedy exit—

[The First Secretary of State and Minister for the Cabinet Office (Damian Green)]

But not surprised.

[Mr Speaker]

But not surprised, says the First Secretary of State. I am saddened by the speedy exit of large numbers of Members. If there are so many Members who wish to leave and who do not wish to hear the oration of the hon. Member for Linlithgow and East Falkirk (Martyn Day) on the subject of redundancy modification orders—a quite unaccountable departure on their part—I hope that they will leave the Chamber quickly and quietly so that the rest of us can listen to the oration of the hon. Gentleman.

[Martyn Day]

Thank you, Mr Speaker. I am grateful to you for allowing me this opportunity to raise the issue of redundancy modification orders—or, to use the full Sunday name, the Redundancy Payments (Continuity of Employment in Local Government, etc.) (Modification) Order 1999.

As the name implies, the order acts to preserve continuity of employment where an employee moves between certain local government, and indeed some other identified, positions. Pretty much every type of job that once belonged to the local government family is covered by the RMO, with a wide range of bodies listed. To illustrate that, the list already includes bodies in my constituency, such as West Lothian Leisure Ltd, and others including the Scottish Environment Protection Agency, Scottish Water, the Scottish Commission for the Regulation of Care and the Scottish Social Services Council, to name just a few.

I refer Members to the order’s explanatory notes, which describe its effect quite clearly:

“The Order modifies certain provisions of the Employment Rights Act 1996 concerning redundancy payments, in their application to persons employed by certain local government employers or other employers in related sectors. The modifications have the effect that the employment of such a person by more than one such employer may be treated as if it were continuous for the purposes of those provisions; and re-engagement of such a person, or an offer of re-engagement made to such a person, by any such employer is treated as if it were re-engagement, or as if the offer had been made, by that person’s employer.”

In ordinary language, that means that the order deems certain successive employments as continuous, and the provisions of the Employment Rights Act 1996 would apply as if the individual had been employed by the same employer throughout the entire period.

If an employee under notice of redundancy receives a job offer from another listed body on the modification order and starts the new role within four weeks of the end of their old job, they are considered to have continuity of employment. If an employee decides during the first four weeks not to continue with the new job, they will be able to terminate the contract, and they would be entitled to receive any redundancy payments from the old employer. However, no continuous service accrued under the redundancy modification order applies to anything other than the redundancy payment. Such continuous service fails to entitle employees to any additional annual leave or other benefit over and above that of their contractual entitlements.

While the order treats certain types of successive employments as continuous, it does not preserve continuity if there is a break in service. The order has been amended a number of times to include new employments, with the last amendment being in 2015.

The crux of the issue, and the reason for this debate, is the lack of progress made on updating the order, and the impacts of this on employees’ rights and continuous service benefits—benefits such as pension and annual leave entitlement, as well as the calculation of redundancy payments. Many terms and conditions of local government employment are linked to continuous service, so the impact of changing employers extends far beyond redundancy rights, affecting other entitlements, such as sickness allowance and maternity pay.

The lack of an update to the order means that a number of organisations across the UK have yet to be included in the order, despite applying for inclusion—in some cases, several years ago. One such organisation is the Falkirk Community Trust, which applied for inclusion shortly after its establishment in 2011. Its application has been considered, and the trust has been approved for inclusion in the schedule of bodies in the order. To date, this inclusion has not taken place and has been beset with delays.

The Government stated in 2015 that the order would be updated in due course. As the House will be aware, the Department for Communities and Local Government administers the local government redundancy modification order on behalf of the UK Government and the devolved Administrations in Scotland and Wales. I have been told in answer to parliamentary questions that the Department is

“actively looking at options on taking forward the Redundancy Modification Order and will update relevant organisations in due course.”