Transport Act 2000

[F1 123X Local service contracts: application of TUPE E+W

(1) Subsection (3) applies to a situation in which—

(a) at the effective time of a local service contract, local services cease to be provided by a person (the “former operator”) in—

(i) the area to which the relevant franchising scheme relates, or

(ii) in the case of a franchising scheme which provides for scheme sub-areas, the relevant scheme sub-area,

in accordance with section 123J(3), and

(b) at the same time, a person (the “new operator”) begins to provide local services in that area under that local service contract.

(2) Subsection (3) also applies to a situation in which—

(a) local services which, at the effective time of a local service contract, a person (the “former operator”) would be required by section 123J(3) to cease providing in—

(i) the area mentioned in subsection (1)(a)(i), or

(ii) the area mentioned in subsection (1)(a)(ii) (as the case may be),

cease to be provided by the former operator before the effective time of that local service contract, and

(b) at the same time as those local services cease to be provided by the former operator, a person (the “new operator”) begins to provide local services in that area under an agreement which the authority or authorities operating the relevant franchising scheme entered into by reason of the cessation of the local services referred to in paragraph (a).

(3) Any situation to which this subsection applies is to be treated as a relevant transfer for the purposes of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) (whether or not TUPE would apply apart from this subsection).

(4) For the purposes of TUPE, the organised grouping of employees that is subject to the relevant transfer consists of those employees of the former operator whose employment is principally connected with the provision of the local services referred to in subsection (1)(a) or (as the case may be) the local services referred to in subsection (2)(a).

(5) Any situation which by virtue of this section is treated as a relevant transfer for the purposes of TUPE is also to be treated as a relevant transfer within the meaning of TUPE for the purposes of—

(a) sections 257 and 258 of the Pensions Act 2004, and

(b) any regulations made under section 258 of that Act.

(6) The Secretary of State may make regulations supplementing the provision made by this section.

(7) The provision that may be made by regulations under subsection (6) includes—

(a) provision for determining, for the purposes of subsection (4), whether a person's employment is principally connected with the provision of any particular local services (including provision for or in connection with the appointment of a person to make such determination);

(b) provision for determining, in the case of any particular organised grouping of employees, the particular new operator who is to be the transferee for the purposes of TUPE (including provision for or in connection with the appointment of a person to make such determination);

(c) provision requiring any person operating local services in the area to which a franchising scheme relates to provide the authority or authorities operating the scheme with such information as may be prescribed, at such time as may be prescribed, about such of that person's employees as would fall within subsection (4) if the person ceased to provide those services in the circumstances described in subsection (1)(a);

(d) provision requiring the authority or authorities operating a franchising scheme to provide all persons operating local services in the area to which the scheme relates with such information as may be prescribed, at such time as may be prescribed, so as to enable such persons to comply with any requirement imposed by virtue of paragraph (c) of this subsection;

(e) provision requiring the authority or authorities operating a franchising scheme to ensure that any local service contract entered into with a person under the scheme, or any other agreement made with a person for the provision of local services in the area to which the scheme relates, is made on terms—

(i) that require the person, in the event of there being any transferring employees, to secure pension protection for every transferring employee, or every transferring employee of a prescribed description, who as an employee of the former operator had rights to acquire pension benefits, and

(ii) that, so far as relating to the securing of pension protection for a transferring employee, are enforceable by the employee.

(8) For the purposes of this section—

(a) “transferring employee” means an employee of a former operator whose contract of employment becomes, either by virtue of TUPE or by virtue of this section, a contract of employment with a new operator;

(b) “pension protection” is secured for a transferring employee if after the change of employer referred to in paragraph (a)—

(i) the employee has, as an employee of the new operator, rights to acquire pension benefits, and

(ii) those rights are of such description as is prescribed by regulations.

(9) The Secretary of State must exercise the power conferred by this section to make regulations containing provision falling within subsection (7)(e) so as to ensure—

(a) that pension protection is required to be secured for every transferring original employee who, as an employee of the original operator, had rights to acquire pension benefits, and

(b) that the rights to acquire pension benefits which a transferring original employee has as an employee of the new operator by virtue of paragraph (a) are rights which—

(i) are the same as the rights the transferring original employee had as an employee of the original operator, or

(ii) under provision made by regulations, count as being broadly comparable to, or better than, those rights.

(10) For the purposes of subsection (9)—

• “transferring original employee” means a transferring employee—

  (a)

  who immediately before the relevant date was employed by a person (the “original operator”) providing local services in the area to which the relevant franchising scheme relates, and

  (b)

  whose contract of employment—

  (i)

  was, from that date until the change of employer referred to in subsection (8)(a), a contract of employment with the original operator, or

  (ii)

  on each occasion when the employee was subject to a relevant transfer became, either by virtue of TUPE or by virtue of this section, a contract of employment with a person providing local services in the area referred to in paragraph (a);

• “relevant date”, in relation to a franchising scheme, means—

  (a)

  the date on which the scheme was made, or

  (b)

  where—

  (i)

  the local services being provided by the original operator were not subject to the scheme when it was made, and

  (ii)

  as a result of the variation of the scheme, those services became subject to the scheme,

  the date on which that variation was made;

• “relevant transfer” means anything that is, or is to be treated as, a relevant transfer for the purposes of TUPE.]

Textual Amendments

F1 Ss. 123A-123X and cross-heading inserted (27.4.2017 for specified purposes, 27.6.2017 in so far as not already in force) by Bus Services Act 2017 (c. 21), ss. 4, 26(3)

Modifications etc. (not altering text)

C1 Pt. 2: functions made exercisable (28.2.2024) by The East Midlands Combined County Authority Regulations 2024 (S.I. 2024/232), regs. 1(2), 15(1)

C2 Pt. 2: transfer of functions (2.11.2018) by The Newcastle Upon Tyne, North Tyneside and Northumberland Combined Authority (Establishment and Functions) Order 2018 (S.I. 2018/1133), arts. 1, 7 (with art. 28)

C3 Pt. 2 functions made exercisable (2.11.2018) by The Newcastle Upon Tyne, North Tyneside and Northumberland Combined Authority (Establishment and Functions) Order 2018 (S.I. 2018/1133), arts. 1, 9 (with art. 28)

C4 Ss. 123A-123X: functions transferred (28.2.2024) by The East Midlands Combined County Authority Regulations 2024 (S.I. 2024/232), regs. 1(2), 15(2)

C5 S. 123X(8)(b) modified (19.12.2017) by The Franchising Schemes and Enhanced Partnership Schemes (Pension Protection) (England) Regulations 2017 (S.I. 2017/1093), regs. 1(2), 4