TRANSFER OF PERSONS ENGAGED IN DOCKYARD SERVICES TRANSFERRED TO PRIVATE SECTOR (Hansard, 8 April 1986)

§ Mr. Lee
I beg to move amendment No. 2, in page 2, line 8, leave out 'the whole or any part of'.

§ Mr. Deputy Speaker (Sir Paul Dean)
With this it will be convenient to discuss Government amendments Nos. 3, 4 and 10.

§ Mr. Lee
The first three amendments have been tabled by the Government following the debates in Committee on clause 1(2)(b) and remove any doubt that the dockyards might be split into different parts. Amendments Nos. 2 and 4 make it clear that only one company will be set up by my right hon. Friend the Secretary of State for Defence for each dockyard. Amendment No. 3 does no more than tidy up the clause to remove any doubt which might otherwise have been caused over the transfer of dockyard employees. Amendment No. 10 brings clause 1(8) into line with clause 1(4), thus meeting the concerns expressed in Committee by the right hon. Member for Llanelli (Mr. Davies).
As the House knows, the vast majority of those employed in the dockyards will transfer to the dockyard company, but not all will so transfer. Therefore, I invite the House to agree to amendments Nos. 2, 3, 4 and 10.

§ Mr. Denzil Davies
As the Under-Secretary of State has said, these amendments reflect the debates in Committee. We are grateful to him for responding to the points that we made. We have no objection to any of the amendments.

§ Mr. Lamont
I beg to move amendment No. 5, in page 2, line 22, leave out 'transfer of the'.

§ Mr. Deputy Speaker
With this it will be convenient to take the following: Government amendments Nos. 6, 7 and 9.
Amendment No. 8, in page 2, line 24, after second 'a', insert 'commercial'.

§ Mr. Lamont
All these amendments are concerned with TUPE, which we discussed earlier and on various aspects of which we had a debate in Standing Committee.
The right hon. Member for Llanelli (Mr. Davies) said that TUPE had good parts and was probably a beneficial addition to our law relating to the transfer of undertakings. The right hon. Gentleman conceded that the regulations protect many rights which perhaps were not protected before. The purpose of one of his amendments was to ensure that TUPE applies not just to the present transfer but to a transfer to any future management. The Government and the Opposition are as one in wanting to ensure that TUPE applies.
In Committee the right hon. Gentleman said that he was broadly satisfied with what we proposed, with one exception, which was that in his view, unless the Bill made it clear that the dockyard undertaking was to be treated as a commercial business, TUF'E could not be guaranteed to apply. I undertook to consider further whether an amendment along the lines that he was suggesting was necessary. I have since written to the right hon. Gentleman confirming that in my view such an amendment is not required to ensure, as we both want, that there is no doubt that TUPE applies in this case. The legal advice that I have been given—we have gone into this matter in some detail — is that the dockyard undertaking at each dockyard is an undertaking within the 1981 regulations.
The right hon. Gentleman knows that I was satisfied that the Bill was therefore sound in this respect. None the less, further consideration has been given by the draftsmen 115 to the wording of clause 1(4). I hope that the right hon. Gentleman will accept that amendments 5 to 9 are directed towards the result that we all want. Clause 1(4) remains directed towards the application of TUPE to the transfer of the employees alone.
As we have said before, there was a legal doubt, although not the legal doubt which the right hon. Gentleman raised. I give this explanation because I think that the right hon. Gentleman and his hon. Friends might otherwise think that I am introducing this amendment because of the point which the right hon. Gentleman made. It is, in fact, a different point, despite the wording of the amendment. There was a legal doubt whether the transfer of the employees alone, without more, would be an undertaking within the meaning of TUPE. With the amendments which we are debating now, the subsection removes any doubt, by providing that the services of the employees, without more, shall be treated as part of the undertaking capable of being transferred as a business. As a result, I think it is beyond doubt that TUPE will apply to the transfer of the services to a company formed by my right hon. Friend.
Clause 1(4) in the Bill as printed was sound, but the approach which I have just described avoids any argument and I hope that the House will agree that it makes clear beyond any doubt the application of TUPE. For this reason, I hope that hon. Gentlemen will not press their amendment but will support what we have proposed.

§ Mr. Denzil Davies
The Minister of State has explained why these amendments have been brought forward. We shall certainly not claim any false victory and I accept entirely that it is through his hard work and that of his officials that these amendments have been brought forward. TUPE does not seem to be too easy for anybody, as far as I can see.
With regard to the points we raised in Committee about the commercial operation of the dockyards, I am grateful to the hon. Gentleman for his letter. His lawyers have managed to find a case, although I do not think it is as good as the case that I found, and I accept that the dockyards, although they are not a commercial venture, are perhaps in the nature of a commercial venture. I am sure that there is a lot of room for debate even there, but, since TUPE is a good thing, we want to see it applied. We shall not be pressing the objections which we pressed in the Standing Committee, and we welcome the amendments that have been made.