TNAG-2422-FCO40-3524-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1992 — Page 4

FILE NOTE

CONFIDENTIAL

HKA 233/1

Pa

HHOCS

poliy

PRIVATISATION OF UK GOVERNMENT DEPARTMENTS

1. I spoke with Sylvia Thompson in the Treasury about what

happened in the UK when a government department was privatised.

2. Ms Thompson informed me that, since 1982, most such

privatisations have been governed by an EC Directive - the acquired rights directive and its associated Transfer of

-

Undertakings (Protection of Employment) Regulations.

(TUPE). These regulations protect employees when

undertakings are transfered. All rights of the employees are automatically transfered to the new employer. Thus the terms and conditions of service of such employees must be the same under the new employer as under the government. There is no/no right to retire or to compensation. There is

no break no change and therefore no right to retire. However, if the new organisation wished to fire an employee, they would have to grant exactly the same terms of dismissal as would have been available under the government.

2.

These arrangements do not/not cover pension rights. pensions of such persons are either preserved under the

PCSPS, or transfered to the new organisation.

3.

The

It is debatable whether the TUPE regulations would come into play in the sort of situation envisaged in Hong Kong: one government taking over another. Ms Thompson mused that if the EC presidency were to take over the UK civil service,

she thought that the TUPE regulations would apply and that therefore civil servants would not/not be given compensation

or the right to retire.

M.

M V Stone

PJZAYK/1

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