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Rule 68:
Employee transfer costs

Explains the requirement for agencies to disclose the costs relating to the transfer of employees due to restructuring.

  1. In certain situations, an agency must disclose the costs relating to the transfer of employees due to restructuring. The circumstances are contained in the Employment Relations Act 2000 (the Act), Part 6A and Schedule 1A. Disclosure of costs must be made available to prospective suppliers (new employers) on request when:
    1. the restructuring is the subject of a tender, and
    2. the type of employees affected falls within a category listed in the Act.

Procurement advice

The purpose of Part 6A of the Employment Relations Act 2000 is to protect ‘vulnerable’ employees in specific industries. It deals with continuity of employment under the same terms and conditions, if an employee’s work is affected by a restructuring that is the subject of a tender (eg outsourcing a service that was previously provided in-house).

It relates only to employees in certain types of industries, which include the:

  • Education sector – cleaning, food catering, caretaking and laundry services
  • Health sector and age-related residential care – cleaning, food catering, orderly and laundry services
  • Public service, airports and any other place of work – cleaning and food catering services.

Where disclosure of the costs relating to the transfer of employees is not provided, prospective suppliers can make an application to the Employment Relations Authority for a compliance order. The provisions of the Act override the Official Information Act 1982.

Further information on employment and skills is available on the MBIE website.

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