The Government's calculations for the amount it would save from
reorganisation of local government in Scotland had been ''blown out of
the water'' by a European Court of Justice finding, Shadow Scottish
Secretary George Robertson claimed yesterday.
Mr Walter van Gerven, the ECJ's advocate-general, gave an opinion --
effectively a preliminary judgment -- on Wednesday, that Britain had
defied European Union rules by failing to safeguard employees' rights
when they were sacked or transferred from one employer to another.
His findings were based on an examination of the privatisation
exercises of the Thatcher era but Labour believes they could have
profound implications for the transfer of staff under the local
government reform plans.
The Government's view is that it is acting within the law and that Mr
van Gerven's opinion will make no difference to the local government
changes.
The issue was raised by Mr Robertson on a point of order when the
committee considering the Scottish Local Government Bill convened for
its latest deliberations yesterday morning, and again later, in a debate
on transitional costs of the reorganisation.
Mr Robertson's point was that the calculations on staffing levels --
the Government has said it expects a reduction of between 700 and 2000
-- were fundamental to the calculations on the notional budgets it would
set for the new authorities from 1996-97.
He accused Ministers of failing to recognise the significance of the
ECJ finding. ''The Government is in deep financial water here,'' he
said. ''The Bill is designed to reduce the number of staff and, through
that, make savings which will justify this unnecessary and unwanted
legislation.''
He argued that the Government was embarking on a totally new concept
by setting notional budgets for the new authorities.
The Government's view is that it had always been envisaged that all
existing employees of local authorities would transfer to the new
authorities under the same terms and conditions of employment. The new
authorities would then decide on their manning levels and would be
entitled to make people redundant -- or take on more staff -- as they
saw fit.
This, it was claimed, would not be covered by the EU's Transfer of
Undertakings (Protection of Employment) directive (Tupe) which is at the
centre of the controversy.
Scottish Office Minister Allan Stewart told the committee yesterday
that what had been arrived at on Wednesday was an opinion by the
advocate- general, not a finding by the ECJ, and that the Government
would await the decision of the ECJ in due course.
He added: ''The UK reached agreement with the EC on these directives
some time ago. Appropriate changes were implemented by the Trades Union
Reform and Employment Rights Act 1993. The remaining area of
disagreement is a technical one, relating to consultation procedures
with employee representatives.
''There is absolutely no question of such a technical issue affecting
the costs of reform.''
In later exchanges, Labour strongly challenged the Minister on how the
costs of the reorganisation would be paid for, but Mr Stewart stuck to
his guns.
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