Commentary on Sections Schedule 3 Transfer schemes
73.This Schedule contains further provisions governing transfer schemes made under section 15.
74.Paragraphs 1 and 2 set out how a transfer scheme may specify or identify property, rights and liabilities to be transferred. They also provide when the scheme may come into force and define what may be transferred under a scheme. Paragraph 3 allows a scheme to create new rights and liabilities as between transferors, transferees and third parties. Paragraph 4 provides for a scheme to oblige a transferee or transferor to enter into agreements, or execute instruments, in favour of certain others.
75.Paragraph 5 provides that transfer schemes made under this Act shall have the effect of vesting property, rights and liabilities in the transferee without the need for any further formalities.
76.Paragraph 6 provides for the transfer of any statutory powers or duties the transferor may have in relation to property, rights and liabilities transferring under a scheme.
77.Paragraph 8 allows the transferor and transferee to modify a transfer scheme by agreement after it has come into force. Where the agreement relates to a contract of employment or adversely affect the interests of a third party, the agreement will only be valid if the relevant employee or third party is party to it.
78.Paragraph 9 contains provision for continuity of employment rights for employees of the transferor who become, by virtue of a transfer scheme, employees of the transferee. It also provides safeguards in relation to the pension entitlement of employees transferred under a transfer scheme. Sub-paragraph (2) makes it clear that transferred staff retain the terms and conditions under their existing contracts of employment. Sub-paragraph (3) sets out what happens if an individual objects to the transfer of their employment contract under a transfer scheme before it takes effect. The contract of employment will be terminated immediately before the point at which the transfer has taken place but the employee is not to be considered to have been dismissed for any purpose. Sub-paragraph (4) preserves an individual’s right to terminate their contract of employment where there is a substantial detrimental change in the individual’s working conditions, other than the change of employer.
79.Paragraph 10 provides for circumstances in which compensation may be payable to third parties as a result of provisions in a transfer scheme.
80.Paragraph 11 provides a power for the Secretary of State to require a company to provide him or her with information which he or she needs in order to be able to make a scheme. The company may be subject to a notice and ultimately a court order if it does not comply with a request for information.