UPDATE: Further to our Alert earlier today (below), Eric Pickles has now announced that the Local Authority Two Tier Code is revoked with immediate effect. 


In a speech to the CBI, Communities Secretary, Eric Pickles has announced that the local authority two-tier code, ‘the Code of Practice on Workforce Matters in Local Authority Service Contracts’  (‘the Code’) is to be withdrawn. This development was widely anticipated following the withdrawal of the general public sector two-tier code last December.  The withdrawal of the Code will have a major impact on local authority employers, but will also affect other public and private sector organisations involved in joint working arrangements with local authorities.

Once the Code has been removed, the effect will be that, following a TUPE transfer, there will be no requirement for employers to offer new recruits terms and conditions that are “no less favourable” than those on which their TUPE transferred colleagues are employed.  Eric Pickles said in his speech that the aim of scrapping the Code is to reduced taxpayer costs and encourage job creation.

No date has been set for the removal of the Code but it may well be removed imminently, and without consultation - assuming that the government takes the same approach that it did with the withdrawal of the general two tier code last year.