The government has withdrawn the local authority Two-Tier Code (formally, the Code of Practice on Workforce Matters in Local Authority Service Contracts) from 23 March 2011. The Code applied to local authority sector outsourcing and in effect 'gold-plated' TUPE so that new employees hired by the private sector contractor had to be given no less favourable terms than their ex-local authority colleagues.

This follows the withdrawal of the equivalent central government Code in December (summarised here). The government is considering whether to publish voluntary principles of good employment practice in the Code's place (as was done for central government contracting).

The government is also consulting until 15 June 2011 on the future of the Fair Deal policy applicable on public sector outsourcing, which requires the private sector contractor to provide access to a good quality pension scheme for transferred staff. More detail is available in our Pensions ebulletin.