Guidance on Stage 1 Transfers: Everything you need to know Version 6.0 Officer contacts: APCC Oliver Shaw oliver.shaw@apccs.police.uk 07714399756 APCCE Miranda Caruthers-Watt Miranda.Carruthers-Watt@lancashire.gov.uk Contents Purpose and Audience... 2 Section 1: Introduction to Transfers... 2 Stage 1 Transfer... 2 Stage 2 Transfer... 3 Section 2: Staffing Models, TUPE and Finance Code... 4 Staffing models to support the PCC... 4 TUPE... 4 Section 3: Preparing for the Police Staff Transfer... 5 Staff not covered by this Guidance... 8 Consulting with Trade Unions... 8 Writing to Police Staff... 9 Section 4: Assets, Rights, Liabilities and Pensions... 10 Due Diligence... 10 Financial Management Code of Practice... 11 Pensions... 11 Annexes... 13 Annex A: Model letter to employees and their representatives about the transfer... 13 Annex B: Frequently Asked Questions... 14
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Purpose and Audience This Guidance Note has a dual audience of Police Authority Members and Officers and is designed to be used by local transition boards. It is structured to give an overview and of the issues concerning Transfers whilst providing technical detail and advice for practitioners. It provides Members with a sense of the work that might need to be undertaken to prepare for the stage 1 transfer and for officers, advice on how to get the work done. Disclaimer There are some complex employment matters which are covered in this Guidance Note and this document seeks to clarify the existing position and provide support to authorities. It in no way replaces the need for police authorities to give careful consideration of all of the transfer matters in their own areas and to take professional advice where necessary. Section 1: Introduction to Transfers On the 22 nd of November 2012, the Police Reform and Social Responsibility Act will replace police authorities with Local Elected Policing Bodies (LEPB) [Note: purposes of this guidance, we will refer to LEPBs as Police and Crime Commissioners (PCCs)]. The transfer of assets, staff and liabilities from the police authorities to PCCs will occur at midnight on the 21 st November 1 via a statutory stage 1 transfer. The Act proposes a second stage 2 transfer whereby the PCC can further transfer assets, staff and liabilities to the Chief Constable at a later date. The government anticipates this second stage will occur by April 2014. Stage 1 Transfer At the time of transfer, all land, assets, liabilities, contracts, legal proceedings and employed staff will transfer from the police authority to the PCC 2. This includes property interests as well as contracts, cases currently before the courts, licenses, employer s liability issues, as well as things such as fleet, furniture etc. Following the transfer to the PCC, the police authority will cease to exist. The stage 1 transfer will happen by statue and does not require a separate transfer document, however police authorities might find it useful to have a clear schedule of all of the rights, assets, property, liabilities and staff that will be transferring refer to the section Section 2: Staffing Models, TUPE and Finance Code for further information. Creation of corporation sole At the time of the stage 1 transfer, the Police Reform and Social Responsibility Act creates two new legal entities, both of which are corporations sole. These are: 1 The stage 1 transfers will take place at the relevant commencement time. The relevant commencement time has not formally been agreed by placing commencement orders before parliament but for the purpose of this guidance it is assumed that commencement will take place at midnight on 21st November 2012. 2 Schedule 15 Part 2 S6 provides the arrangements by which staff transfer to the PCC from the Police Authority. 2
The Chief Constable - Schedule 15 Part 1 of the Act enables the transfer of rights and liabilities which immediately before the transfer were rights and liabilities of the chief officer of that police area. The Police and Crime Commissioner - Schedule 15 Part 2 of the Act enables the transfer of property, rights and liabilities which were the property, rights and liabilities 3 of Police Authorities immediately before the transfer. At its simplest, at midnight on 21 st November, the Act will create two new corporations sole, the PCC and the Chief Constable. All rights and liabilities formerly held by a Chief Constable will transfer to themselves as a newly created corporation sole. Similarly, all staff, rights, liabilities and property previously held or employed by police authorities will transfer to the Police and Crime Commissioner as a newly created corporation sole. Stage 2 Transfer The stage 2 transfer refers to the subsequent movement of certain staff, property, rights and liabilities from the PCC to the Chief Constable. The thinking behind the stage 2 transfer is that PCCs, once in office, will want and be able to make arrangements locally with regard to how functions are discharged. This will mean negotiations locally between the PCC and the Chief Constable around who will employ which staff, hold certain properties, liabilities and assets etc. In order for these discussions to occur, the government has announced that stage 2 transfers will be completed by April 2014. There are still a number of details concerning the stage 2 transfer which are yet finalised. Subject to clarification of these matters, the APA / APACE will seek to produce a similar Guidance note in due course. 3 The statutory transfer allows for property (including land and contracts) to be transferred without notifying or consulting 3rd parties. Contracts cannot usually be assigned without the consent of the third party. However, the Act contains what are known as "saving provisions" which allow these transfers to take place. These are set out in Para 23 Schedule 15 of the Act. 3
Section 2: Staffing Models, TUPE and Finance Code This section discusses a variety of issues that may be directly relevant to the Stage 1 transfer depending on the circumstances of your police authority. Staffing models to support the PCC Following the election, the PCC will want to establish their own staffing models to support them in the Office of the PCC. As part of transition work, police authorities should consider what staffing models are in place to support the PCC after they are initially elected into office. This could require a reorganisation of some police staff ahead of the stage 1 transfer; however this is matter for individual police authorities to consider depending on their local circumstances. Fundamentally, police authorities will want to ensure that they have the necessary resources in place to support the PCC for their initial period in office. These arrangements will be in place until such time the PCC is ready to implement the staffing model for their office that best suits their needs. The Home Office, APACE and the APA are looking at a variety of staffing models that could be implemented when the PCC takes up office. This work will be circulated in due course. TUPE TUPE is an acronym for the Transfer of Undertakings (Protection of Employment) Regulations. The Regulations were first passed in 1981 and reviewed in 2006. TUPE is a significant and often complex piece of legislation adopted by the UK in order to implement the European Acquired Rights Directive. The purpose of TUPE is to protect employees if the business in which they are employed changes hands. Its effect is to move employees and any liabilities associated with them from the old employer to the new employer by operation of law. The Government has said that it does not believe that TUPE applies in respect of any of the changes in respect of policing governance because this is the reorganisation of an administrative function rather than the transfer of an undertaking. In order to facilitate transfers of administrative functions the Cabinet Office has developed a Statement of Practice and the Policing Minister has confirmed that he expects the principles set out in the Cabinet Office Statement of Practice on Staff Transfers in the Public Sector to be applied. In effect this means, with the exception of some police staff working in police authorities, there should be no change to the terms and conditions, direction and control or reporting relationships for the majority of police staff as a direct result of Stage 1 transfer on November 22 nd. 4
Section 3: Preparing for the Police Staff Transfer Police Staff is a description which covers all employees of the police authority, as opposed to warranted police officers. This is a broad description covering everyone from PCSOs and CSIs to the people working in the Chief Executive's Office. At its most simple, all police staff currently employed by the police authority on 21 November 2012 will transfer to the employment of the PCC on the 22 of November 2012. This transfer will be automatic and is a statutory transfer under the legislation. The statutory transfer process specifically provides for the transfer of contracts of employment as if specifically made between the new employer and the member of staff. This process also transfers all existing pension rights, liabilities and obligations without change. Arrangements are in hand to ensure that Police and Crime Commissioners are able to be responsible for pension arrangements within the Local Government pension scheme. In terms of planning, police staff will generally fall into a number of different groups which may require differing levels of preparation, depending on how your police staff workforce is comprised. The following section explains the various groups and suggests different types of preparation that may be required. 1. Police Staff working in the force / constabulary and under the direction and control of the Chief Constable This is likely to be the largest group of police staff. These are the people who are normally referred to as Police Staff. These will be people currently under the direction and control of the Chief Constable. Preparation: Write to police staff explaining the transfer arrangements, including the impact upon their terms and conditions of employment and access to further information refer to There are a number of other categories of Police Staff. Some police authorities may have staff who have been seconded to a joint venture or transferred (probably under formal TUPE arrangements) to a Strategic Partnership or external provider. There may be specific provisions in the contracts which established these partnerships and authorities are advised to seek further professional advice if this affects them. Where the authority remains the employer and staff are seconded into a joint or collaborative venture, the staff will be transferred to the employment of the PCC of their originating authority and remain seconded as before. This is an area where authorities are recommended to seek specific advice. It is possible that you will also have civilianised certain functions and have services provided by private sector providers. These staff are not employed by the police authority and will not transfer, but the liabilities and rights under the contract will. Consulting with Trade Unions Police Authorities will want to make early contact with their recognised trade unions to open up formal consultation on the transfer of police staff to PCCs. This can be done in a variety of ways, but should involve: 5
Timely referrals via force consultative and negotiating machinery Invitation to the recognised trade unions to join authority/force transition boards, if this has not already been done An agreed local joint communications strategy. Writing to Police Staff below. 2. Police Staff working under a collaborative agreement Police Staff employed under a collaborative agreement will transfer to the PCC on the 22 nd November in the same way as those police staff working solely within the force / constabulary. However, police authorities will want to ensure that they have clarified the relationship and employment status of these individuals. This task is especially important for staff working under informal collaborative agreements. The APA strongly advises that all informal collaborative agreements should be formalised ahead of the stage 1 transfer. The formalisation of collaborative agreements should be done as part of a due diligence exercise refer to Section 4 Due Diligence for further details. This will allow the agreement to become either an asset or liability capable of transferring under the new arrangements. Informal arrangements between chief constables should also be formalised in order that they are capable of transfer to the chief constable as a corporate body. While it is not essential to formalise collaborative agreements before the stage 1 transfer, doing so will ensure clarity about which staff have been transferred to whom. Schedule 13 of the Police Reform and Social Responsibility Act deals with police powers under collaboration agreements and authorities are advised to have regard to this. Preparation: A due diligence checklist has been sent to all police authority Chief Executives; ensure that either this or a local version has been satisfactorily completed. Ensure the police authority is clear about the relationship and employment status of all police staff who may be working under collaborative agreements. This may require a due diligence exercise and/or the entering into collaborative agreements to formalise previously informal working arrangements between forces. -then- Write to police staff refer to Consulting with Trade Unions Police Authorities will want to make early contact with their recognised trade unions to open up formal consultation on the transfer of police staff to PCCs. This can be done in a variety of ways, but should involve: Timely referrals via force consultative and negotiating machinery Invitation to the recognised trade unions to join authority/force transition boards, if this has not already been done 6
An agreed local joint communications strategy. Writing to Police Staff below. 3. Police Authority Staff Police Authority staff provide direct support to the police authority. They are not under the direction and control of the Chief Constable. Police authorities should also consider whether they have service level agreements or contracts with local authorities under S113 Local Government Act. There are two sub-categories for staff working in the police authority: 3a. Police Authority Staff within the Chief Executive's Department This group are the police authority staff, working within the police authority. This group will transfer to the employment of the PCC on the 22 nd November. Preparation: Check the terms and conditions of staff in this category, they may be the same as Police Staff, but you might have people who transferred from local authorities who have retained on local authority terms and conditions or a hybrid. Write to police staff refer to Consulting with Trade Unions Police Authorities will want to make early contact with their recognised trade unions to open up formal consultation on the transfer of police staff to PCCs. This can be done in a variety of ways, but should involve: Timely referrals via force consultative and negotiating machinery Invitation to the recognised trade unions to join authority/force transition boards, if this has not already been done An agreed local joint communications strategy. Writing to Police Staff below. 3b. Staff working for the police authority who are employed by a local authority and either seconded to the police authority or providing services to the authority under a service level agreement or contract. This group are employed by the relevant local authority and are working within the police authority. It is estimated that this applies to approximately 20% of police authority staff. Police authorities with staff in this group should consider whether their arrangements are suitable in advance of the first stage transfer. It should be noted that the PRSRA Transfer Order does not compel a local authority to transfer any of its staff to the police authority. Preparations for police staff in group may possibly involve the following actions: Understand whether the local authority intends staff to transfer to the police authority in advance of the statutory transfer date. If this is the case you will need to seek advice as to whether this is to be a TUPE or TUPE type transfer. 7
Consideration of what the initial staffing model to be in place to support the PCC Discuss any proposals with force and local authority HR departments Consult with staff potentially affected by changes ahead of the stage 1 transfer. Preparation: Consider the above issues relevant to your police authority. -then- For any police authority staff transferred to police staff terms and conditions (ahead of the stage 1 transfer) refer to Consulting with Trade Unions Police Authorities will want to make early contact with their recognised trade unions to open up formal consultation on the transfer of police staff to PCCs. This can be done in a variety of ways, but should involve: Timely referrals via force consultative and negotiating machinery Invitation to the recognised trade unions to join authority/force transition boards, if this has not already been done An agreed local joint communications strategy. Writing to Police Staff. Staff not covered by this Guidance There are a number of other categories of Police Staff. Some police authorities may have staff who have been seconded to a joint venture or transferred (probably under formal TUPE arrangements) to a Strategic Partnership or external provider. There may be specific provisions in the contracts which established these partnerships and authorities are advised to seek further professional advice if this affects them. Where the authority remains the employer and staff are seconded into a joint or collaborative venture, the staff will be transferred to the employment of the PCC of their originating authority and remain seconded as before. This is an area where authorities are recommended to seek specific advice. It is possible that you will also have civilianised certain functions and have services provided by private sector providers. These staff are not employed by the police authority and will not transfer, but the liabilities and rights under the contract will. Consulting with Trade Unions Police Authorities will want to make early contact with their recognised trade unions to open up formal consultation on the transfer of police staff to PCCs. This can be done in a variety of ways, but should involve: Timely referrals via force consultative and negotiating machinery 8
Invitation to the recognised trade unions to join authority/force transition boards, if this has not already been done An agreed local joint communications strategy. Writing to Police Staff The APA recommends that police authorities, as the employer of police staff, should write to their employees, and their recognised trade unions, to explain the stage 1 transfer. Authorities may use the constabulary HR department to do this and are unlikely to have separate HR resources. It is suggested the following bodies should be involved in these discussions: Chief Constable of the force and/or force HR department Local recognised trade union The APA has produced a template letter at Annex A: that police authorities may wish to use when writing to police staff. Some further local customisation may be required, for example we are aware that some police authorities are planning to write jointly with their Chief Constable to police staff. Non Police Staff Council forces may also need to customise the wording of the letter. Timing There is no set timeframe when police staff should be written to. However police authorities may want to ensure the letters are sent with sufficient time to allow any questions to be raised and addressed ahead of the transfer. With this in mind, it is suggested that police staff should be written to at least three months ahead of the stage 1 transfer date (i.e. late August 2012). 9
Section 4: Assets, Rights, Liabilities and Pensions This section provides an overview of issues concerning assets, rights, liabilities and pensions. While some of the matters covered in this section relate more directly to the Stage 2 transfer, it is important for police authorities to be mindful of them when planning their stage 1 transfer. Due Diligence In business terms, due diligence can be simply defined as understanding what you are buying and making sure you get what you are paying for. There are a number of legal definitions of due diligence but it is generally accepted to be a measure of prudent and sensible investigation as to the circumstances that would ordinarily be expected from and exercised by a reasonable and prudent person under the particular circumstances. There is so absolute standard of measurement and much depends on the individual circumstances of the transfer. As the stage 1 transfer is statutory, some people may argue that there is no need to go through a formal due diligence exercise. Practically speaking, for any transfer, due diligence would include fully understanding all of the obligations of the transferring body: assets, contracts, land however it may be held including leases and licences where relevant, debts, pending and potential legal proceedings, including any employers liability matters, warranties, long-term customer agreements, employment contracts, distribution agreements, compensation arrangements. In terms of land, it is important to have a schedule of the land and property held by the authority as this will need to be the subject of a land registry transfer at Stage 1. Although all assets, land property and contracts etc will transfer automatically by virtue of the statute, there will be some work needed immediately post the Stage 1 Transfer. You should consider what resources are needed to do this additional work. For example, although the property held by the Police Authority will transfer to the OPCC, it is necessary to register the OPCC as the new title holder with the Land Registry. This is a straightforward procedure but your legal officers will need to prepare for the work. It is recommended that this schedule is prepared early as you may find that some property titles, previously held by bodies other than the police authority, have not been transferred to the authority. Actions to consider: Each police authority will want to consider whether they have an adequate schedule that sets out the assets, staff and liabilities that will transfer from the police authority to the PCC in November 2012. As the Act provides for the Chief Constable to have a general power to do anything which is calculated to facilitate, conducive or incidental to the exercise of functions of a Chief Constable (Schedule 2 Para 7) including entering into contracts and acquiring and disposing of property (except land) with the consent of the PCC it is particularly important that a clear record of who is responsible for what is maintained. Having this information is also likely to be very important when preparing for Stage 2 transfers, particularly for accounting rules being developed under the Financial Management Code of Practice (FMCP) refer below. 10
All police authorities have been supplied with a due diligence checklist and this will allow them to be in a position to supply both the PCC and Chief Constable with comprehensive lists of the property rights and liabilities as outlined. A copy of the due diligence checklist is available from APACE. Financial Management Code of Practice The Financial Management Code of Practice (FMCP) provides clarity around the financial governance arrangements within the police service in England and Wales, and reflects the fact that the police service has a key statutory duty to secure value for money in the use of public funds. It provides high level guidance to help ensure effective and constructive relationships in all financial matters. The FMCP sets the tone while promoting flexibility and avoiding overt prescription so that the detail of arrangements can be worked out locally. This FMCP is issued under section 17 of the Police Reform and Social Responsibility Act 2011 and section 39A of the Police Act 1996 which permits the Secretary of State to issue codes of practice to Elected Local Policing Bodies ( ELPBs ) and Chief Officers of Police ( Chief Officers ), respectively. As set out in section 17(4) of the 2011 Act and section 39A(7) of the 1996 Act, Elected Local Policing Bodies and Chief Officers must have regard to this code in carrying out their functions. Implications for Stage 1 Transfer The Police Authorities Treasurers Society (PATS) (and other stakeholders) are currently working to develop detailed accounting rules as part of the FMCP. Police authorities will be expected to have regard to the relevant provisions in respect of transfers and other arrangements. While this work is not directly related to the stage 1 transfer, it will be pivotal for the stage 2 transfer. Accordingly, police authorities should be confident they have their house in order with respect to understanding what assets and liabilities are held by the police authority at the time of transfer to the PCC. Pensions Pension issues for staff with respect to transfers may be significant, depending on the pensions which they are currently building up as part of their current employment. However, these issues do not need to be resolved in time for the stage 1 transfer as existing pensions rights, liabilities and obligations will transfer unchanged. This section provides a summary of the known issues relating pensions that stakeholders are working to address in time for the stage 2 transfer: If they are accruing salary-related pensions the treatment of these rights will be complex and the detail is not dealt with in the Act. However, these issues are being considered and further information is likely from the Home Office Pensions working group. Police staff will almost certainly be in the salary-related Local Government Pension Scheme (LGPS) for their area. Broadly speaking each county has its own LGPS, although in some areas it is based on previous local government history. The Act, (Schedule 15) transfers all employer obligations under the individuals' contracts of employment. There will be work needed at a local level but the national principles need to be agreed first and there is extensive work underway to identify the pensions issues needed. This is being led by PATS and trade unions will be actively engaged 11
A specific guidance note in respect of pension matters will be provided. 12
Annexes Annex A: Model letter to employees and their representatives about the transfer Dear [insert name] As you will be aware, the Police Reform and Social Responsibility Act 2011 provides for the creation of Police and Crime Commissioners to replace Police Authorities. The legislation also provides for the transfer of staff from the existing Police Authorities to the Police and Crime Commissioners. The change is effected by statute so there is nothing that employees need to do. The purpose of this letter is merely to explain the change. The transfer of staff will take place on 22 November 2012. You will be transferred automatically on your existing terms and conditions of employment, including your pension, and there will be no break in the continuity of your employment, nor in your pension entitlements, rights or obligations. [Explain any measures (actions, steps or arrangements) that the Police Authority envisages taking prior to the transfer which affect employees and which are connected with the transfer]. Following the transfer, the Police and Crime Commissioner and the Chief Constable will commence a dialogue as to which police staff will stay in the employment of the Commissioner and who will transfer a second time to the employment of the Chief Constable. This second transfer is expected to take place no later than April 2014.The legislation provides for this second transfer, but it is too early to say exactly who that would affect, i.e. who is likely to be retained as an employee of the Police and Crime Commissioner, who is likely to be under their direction and control, and who is likely to become an employee of the Chief Constable. As these matters become clearer, we will endeavour to inform you at the appropriate time. Otherwise, all that will change on 22 November this year is the identity of your employer on your contract of employment. If you have any questions these should be addressed to [insert]. We have already opened consultation with our recognised trade unions on the issues raised in this letter. Members of a recognised trade union may wish to seek advice from their union. May I take the opportunity of this formal notification to stress the importance of the role of our police staff and to thank you on behalf of the <<insert police authority name>> and the << Insert Chief Constable of XX Force>> for the valuable role you play in providing a police service for the people of <<Insert force area>>. Please retain this letter for your records. Yours sincerely <<Insert police authority Chair signature>> 13
Annex B: Frequently Asked Questions Is there a statutory consultation required for police staff ahead of the stage 1 transfer? There is no statutory consultation ahead of the stage 1 transfer for police staff, however we would strongly suggest that all Unions and Staff Associations are fully engaged and are part of the transition process in the interest of clear communication with your workforce. The APA and APACE advocate writing to all police staff to explain the changes and engaging with relevant unions and the force / constabulary as a matter of good practice. Some police authorities may decide to make changes to the composition of their police staff workforce ahead of the stage 1 transfer and (depending on the changes) this will require consultation with the affected police staff. Police authorities will need to take proper HR advice in these circumstances with respect to any consultation required. Apart from writing to police staff, does the police authority have to do anything to ensure the stage 1 transfer goes through? No. The stage 1 transfer will happen by statue and does not require a separate transfer document. When should the police authority have written to police staff by? There is no set timeframe when police staff should be written to. However police authorities may want to ensure the letters are sent with sufficient time to allow any questions to be raised and addressed ahead of the transfer. With this in mind, it is suggested that formal correspondence should take place at least three months ahead of the stage 1 transfer date (i.e. late August 2012). Will there be any changes to pension arrangements for stage 1 transfers? No. There are no significant issues concerning pensions as a direct result of the stage 1 transfers. However, there are a number of issues around pensions for the stage 2 transfer and these are currently being considered by stakeholders. Who should police staff contact if they have concerns? All queries should be addressed to the Chief Executive of the police authority and they will liaise with the relevant HR department. Trade union Members can contact their unions. Will the terms and conditions for police staff employed within the force or constabulary change as a result of the stage 1 transfer? No. Police Staff employed within the force or constabulary will have their terms and conditions of employment, and pensions, automatically transferred from the police authority to the PCC and there will be no break in the continuity of employment. Will the terms and conditions for police staff employed within the police authority change as a result of the stage 1 transfer? No, but the PCC may choose to make changes to their office after they are elected. Any changes made would need to be dealt with in line with employment law and existing terms and conditions. 14