Workplace Report November 2019


It’s not just pay that’s been a target for negotiators

Apart from a decent pay rise, what’s been on the union shopping list and likely to be on the want list for the present pay round? There is enormous scope, but improving working time, bolstering earnings and securing a fair pay system are likely to be strong contenders. 

The 2019-20 pay round is under way but most deals have yet to be negotiated, so what can we expect to see on the agenda? A decent pay rise will be the starting point but many deals (perhaps one in two, based on past experience) are likely to go beyond that. What will the other priorities be? 

Unions negotiating for local government workers in England, Wales and Northern Ireland (GMB, UNISON and Unite) have already submitted their April 2020 claim. They are calling for a real living wage of £10 an hour as starting point for the pay spine, and a 10% increase on all other pay points, but the pay claim also addresses some other key issues:

• annual leave: a one-day increase to the minimum paid annual leave entitlement set out in the Green Book;

• working week: a two-hour reduction in the standard working week as set out in the Green Book;

• health and safety: a comprehensive joint national review of the workplace causes of stress and mental health throughout local authorities; and

• working conditions: National Joint Council (NJC) pay increases cannot and must not be met by slashing locally determined conditions and the joint unions are calling for the LGA (the Local Government Association representing employers) to support statements confirming that.

Unions say the decision to allow allowances to be locally determined (under the NJC agreement) has led to a licence to freeze which needs to end. They condemn the “shredding” of working conditions, from unsocial hours to overtime, car allowances, standby payments, annual leave, sick pay and weekend working.

These priorities are not unique to the local government NJC. In the transport sector, the ASLEF Charter (designed to help companies understand and meet union members’ aspirations) sets its sights on retirement at 55, an average 32-hour four-day week, a maximum working day of 9 hours 30 minutes/eight to nine hours on night turns, and better maternity, paternity and parental/adoptive leave, among other objectives. The accompanying Freight Conditions Code includes demands on job share, the cab environment and toilet facilities. 

UNISON’s Knowledge Base provides guidance on negotiating pay, working patterns, leave and pensions, among other key topics. 

Meanwhile, Unite’s Pay Claim Generator helps union reps put together a pay claim, drawing on information from a variety of sources, and invites them to include:

• working time: reduced working time with no loss of pay, better paid annual leave and/or a good compassionate bereavement policy;

• pay additions: a significant increase in shift premiums; 

• casualisation and job security: a new technology agreement, an agency workers framework agreement and/or a job security agreement;

• family friendly policies: a good childcare package, improvement in maternity leave arrangements; and

• an Equal Pay Audit

These are all popular union objectives, but which are most likely to make progress? Drawing on past experience, almost half of the 1,126 deals covered in the 2018-19 LRD Pay Survey addressed something more than the simple pay rise. The frequency with which different topics were tackled is set out in table 1. These aren’t necessarily all improvements, sometimes it’s about continuing an existing arrangement, or even cutting back, but the table provides a good indication of what negotiators were discussing when they met to set pay. 

Pay additions of one sort or another topped of the list, mentioned in one in five (21%) of deals, including the simple but important step of increasing and maintaining their value in line with the pay rise; separately, 7% of deals mentioned bonus or incentive payments. Aspects of working time were addressed in 12% of deals. Pay systems (either pay structures, performance pay or progression) got a mention in 13% of deals. 

Less common were changes to family-friendly policies, perhaps because regulatory improvements drive change in this area. However, one in eight agreements (12%) addressed the wider employment package (including pensions) while 3% of touched on negotiations and procedures (from simply altering the pay anniversary date, to more elaborate changes). In some cases, working parties or commitments to further discussion were included.

Improving working time

Working time has risen up the policy agenda thanks to the Labour Party’s ideas about a four-day week, and the recent Skidelsky report (see Workplace Report, October 2019), but it has also been a prime target for negotiators. 

Topping up annual leave, either for workers in general or for those with a certain level of service, has probably been the most common objective, with negotiators in a range of agreements securing an extra day or so, but sometimes achieving more dramatic improvements.

Alongside a 1.2% pay rise, workers at bus company Stagecoach South Shields got an extra five days additional paid annual leave, applied from September 2018. The new three-year pay agreement at City Cruises increased annual leave from 28 to 30 days (inclusive of bank holidays) but it also adjusted service-related leave so that it now rises in stages to 33 days after 10 years (previously 15 years’ service was required). 

Across-the-board improvements needn’t be the only way to improve holiday entitlement. Publisher Taylor & Francis agreed to one additional day in recognition of employees’ birthdays, usable at any time throughout the year. The opportunity to “buy” extra leave, through a three-day holiday purchase scheme is now available on a permanent basis at warehousing group XPO Logistics (Bradford).

Relaxing unnecessary restrictions can also be worthwhile. Under the Wincanton (Heinz) Wigan pay deal, the holiday ban over Christmas at the delivery group has been lifted; and the pay deal at car parts firm International Automotive Components (IAC) — JLR Halewood confirmed that all service day holidays can be taken as requested by employees and will not be used to cover JaguarLandRover annual holidays or any other kind of forced lay-off period. 

Cutting the working week, usually with no loss of pay, is another core bargaining objective. The Royal Mail formally agreed to the long term goal of a 35-hour working week by 2022, starting with one-hour cuts from 1 October 2018 and 1 October 2019. 

Negotiators for detainee custody officers at the G4S Immigration Removal Centre (Brook House and Tinsley House) secured a reduction from 46 to 40 hours. And from this month (November 2019), Halewood workers at JaguarLandRover saw a cut from 37.5 to 37 hours, bringing them into line with other plants. 

P&O Carnival Cruises took the unusual step of reducing the number of annual working days from 1 April 2019, as its pay settlement: negotiators agreed a seven-day reduction to 235 working days which equates to a 3.17% increase in the daily rate of pay. There was a reduction of 36 hours a year (with no loss of pay) for the length of the deal at Angel Delight to Batchelor’s group Premier Foods (Ashford).

Shorter hours may not be the issue. Siemens Metering Services agreed to offer all water meter readers on 27 hour contracts the opportunity to move to 39-hour contracts. Negotiated improvements in break time (for example, an additional five minutes for Wincanton (Asda) – Doncaster workers) are another possibility, as is protection for paid working time in the event of a downturn: Mahle Engine Systems UK agreed to change the existing agreement (until the end of this year) to pay the first two weeks of lay-off within any 13 week period.

Better paid time off for sickness absence is another way to improve paid working time. Under the Serco Pan-Custodial prisons agreement, it was extended for an additional 10 days for staff with over 5 years’ service. The BBC agreed an increase to full pay for up to a maximum of 18 weeks, then half pay for a further 9 weeks in a rolling 12-month period (previous entitlement was 26 weeks in a rolling 24 month period.) 

At Lambeth College (South Bank Colleges), all staff on “new” contracts now get the better “old” contractual sick pay entitlement of six months’ full pay and six months’ half pay. Some negotiators have agreed to cut un-paid “waiting days” where these exist. 

Leave for members injured while carrying out their duties was improved under the Mitie Security (Southampton General Hospital) agreement, with a phased increase (over two years) to three months full pay followed by three months half pay. And at Joseph Walkers Shortbread, payment for a first medical appointment increased (to four hours for Elgin staff and to a full shift for Inverness and Aberdeen staff).

Casting the working time net even wider, Scottish Enterprise agreed to update its guidance on access to flexible working with flexi-time to be offered to all staff, while the National Assembly for Wales agreed to harmonise flexitime and overtime bandwidths at 7am to 7pm. The Heating, Ventilating and Domestic Engineering JCC increased bereavement leave from a maximum of three days to five; confectioner Lees of Scotland increased it to two days for an in-law or grandparent, and introduced five days paid leave for a common law partner. At Tyneside Safety Glass, it is now paid inclusive of shift allowance and other enhancements.

Bolstering earnings

Basic pay is usually at the centre of any pay deal, but earnings can be affected by a variety of pay additions (addressed in some way in 21% of 2018-19 pay deals) or bonuses and incentives (addressed in 7% of deals). 

A common bargaining objective is improve the compensation for shifts or unsocial hours working. So, as part of its last pay deal, supply chain partnership Best Food Logistics Pret introduced a 10% shift allowance for drivers and drivers’ assistants between 8pm and 4am. Menzies Aviation (Luton Airport) agreed to pay an unsociable hours premium of £1 an hour between midnight and 5am, while Port of Dover Cargo Ltd increased its night work rate by 50p an hour to £1.50. 

At Alstom Transport RS&S (West Coast & Systems Support), the value of the permanent night work allowance increased in real terms, by 0.5% to 19%. The same happened, in effect, at 2 Sisters Food Group (Sunderland) where the night shift premium rose by 7.8% (compared with pay increases of between 2% and 4.9%). The improvement negotiated at DHL (Gilmoss) was to incorporate the shift allowance into overtime calculations.

Compensation for overtime working improved at alloy manufacturer Ross & Catherall Ltd (Doncaster) where on Monday to Saturday it is now all paid at time and a half (previously the first two hours were time and a third). Cosmetics manufacturer BCM Fareva introduced a 25% premium payment on Saturdays while at parcels firm UPS, Saturday overtime moved up from the lower to the higher rate.

For bank holiday working, Pirelli Tyres (Staffline Recruitment) introduced a new £50 premium, while staff rostered to work on Christmas Day at G4S (Queen Elizabeth Hospital Woolwich Patient Transport) will get double time (previously it was single time only). London and regional allowances, standby and on-call allowances are all areas for potential improvement, as are attendance payments, like the scheme at Lineside Logistics (Ford, Dagenham), which now pays up to £500.

At the Department for Education (DfE), long-service awards were enhanced to £250 cash or an additional five days’ annual leave for 25 years’ service. Trelleborg Antivibration Solution’s long-service awards increased by 50% at all levels.

But these familiar payments are by no means the limit for canny negotiators. Under the collective agreement covering the Highways England — Traffic Officer Service, a formalised coaching allowance of £750 was introduced. And new functional allowances (funded from the non-consolidated budget) were introduced for MOD non-industrial staff to attract and retain aircraft safety specialists and other specific staff groups.

Turning to bonus or incentive payments, last December’s settlements at British Airways included a new gain share productivity-based bonus scheme for non-management staff in settlements for its various bargaining groups, while a non-consolidated bonus for ‘strategic and transformative programmes’ (based on measurable savings and benefits) was introduced locally. 

Elsewhere in the transport sector, N Brown Logistics launched a new bonus scheme for the financial year 2020, replacing an existing manager annual bonus scheme and profit share scheme. For Band 1 “lunar” staff the maximum bonus payable will be 5% (as compared to 0.83% under the profit share scheme) with 70% based on company performance while the other 30% is based on team performance. 

And in public transport, the Stagecoach Supertram (Sheffield) pay deal added conductor commission added to terms and conditions. 

In manufacturing, the 2% Weetabix pay deal from 1 January 2019 came with a lump sum profit-related bonus of between 1% and 3% - effective when the company exceeds its profit target by 1%. At Crane Process Flow Technologies, the operational excellence (OpEx) bonus scheme was updated with new objectives and increased payments, alongside a 3.5% pay increase. 

Hinckley & Rugby Building Society agreed a one-off performance bonus of up to 6% but averaging at 3%, alongside its 2.25% increase in salaries. 

In public administration, the pay deal for staff at water industry regulator Ofwat included a six-monthly bonus scheme and recognition vouchers for contributions beyond expectations (typically £1,000). 

The 2% pay deal for pharmacists, store managers and “role banded staff” at Well Pharmacy came with an agreement to expand eligibility for the role banded annual bonus scheme to all grades, while the profit target-based all colleague bonus continued to apply with a potential for up to 4% of base pay in 2019 and 5% in 2020 and 2021.

Pay systems

Altogether 13% of 2018-19 settlements dealt either with pay structures, incremental progression or performance-related pay, in some (but not all) cases opening the way to improved pay levels and/or greater pay certainty. 

The principle of pay progression has come under fire over the last decade so it was interesting to see some negotiators addressing this in the 2018-19 pay round. At New College Swindon, where pay rose by 2%, pay scales are to change to allow quicker progression (a working party will monitor the changes and look at further improvements); also a reduction from 5 to 3 pay steps for staff in Grades 4 and 5 to achieve quicker progression to the maximum at Portsmouth Water. 

Shortened pay ranges allow staff to achieve progression through the ranges within shorter timescales at the Health and Safety Executive (HSE). Pay progression will move quicker towards the market midpoint for lower-paid Shop Direct Head Office staff and slower for the higher paid staff. This will achieve greater consistency for the same roles/grades over time (market-based pay increases took the place of previous increases based on comparative performance, performance ratings and forced distribution). 

Under the SSE (Scottish & Southern Energy) Joint Agreement, there was a commitment to implement a pay progression model by 1 April 2020 with progression payments from that date for staff reaching specified triggers (or backdated if implementation of the model is delayed).

At Severn Trent Water, a 2.4% increase in pay with flowthrough to all negotiated allowances included higher increases for staff lower down in each pay band as the company continues to narrow the bands.

Progression in its broadest sense was addressed in other ways too. The probationary rate for warehouse tier II staff reduced from six to three months under the agreement at Wincanton Greenford (Waitrose Contract); the minimum pay on promotion uplift at the Bank of Ireland increased from 5% to 7%; and a 5% gap between pay bands (with progression from minimum to maximum of each pay band within three years) was maintained as part of a 2.3% pay bill increase for Welsh Government staff that provided varying percentage awards. 

Other pay changes had the potential to affect staff pay progression too. Under the Local Authorities (England & Wales & Northern Ireland) NJC a revised national pay spine reduced the lowest 12 pay points (6-17) to 6 (new pay points 1-6) and expanded the next 10 pay points (18-27) to 15 (new pay points 7-21). These provide the basis for pay restructuring by conforming local authorities up and down the country. Pay changes in the NHS also included the deletion of spine points in the mid-range of pay bands, with staff moving to the spine point above (NHS Wales - Agenda for Change) as pay ranges were shortened and overlaps removed.

A different approach was taken in the National Probation Service. Under the terms of the deal, from 1 April 2021, automatic annual pay progression will be removed and a competency based pay progression framework (CBPPF) will be introduced.

Pay progression continues to be linked to individual performance in many workplaces, but at business services group Diligenta the 2.5% pay increase was mainly not performance-related, except that the lowest performers were excluded. At Scottish Power Generation (Drax), pay increases based on performance continue to be suspended and the company is committed to work with union reps to review performance-related pay and individual progression.

Pay bargaining in 2018-19 was also an opportunity to make other pay system changes, with new grades or payment for additional responsibilities. At household products group Reckitt Benckiser (Nottingham), all grade pay rates were replaced by a new team member rate of £27,170 ayear (a 16.36% increase to the previous minimum level 1 rate). A 3.3% increase across the board at UK Bulk Handling Services Ltd came with a change in the five grade pay structure to just two grades, with the lower paid grades (A3, A4 and A5) removed and a minimum entry level at A2.

A new pay range was introduced for crown prosecutors at the Crown Prosecution Service, with minimum increases of approximately 8%, comparable to the uplift applied when moving to a higher grade. Grades were also restructured in the DHL (Virgin West Coast Trains Contract) agreement to recognise additional responsibilities and roles, expected to simplify pay negotiations in future.

These three broad areas – working time, pay additions and pay systems – are likely to find their way onto many bargaining agendas in the months ahead. Burt many, many other issues were addressed in 2018-19, from death-in-service benefits to employment status, gym membership, job security, parking costs, pensions and late career planning, permanent health insurance, private healthcare, redundancy pay and medical severance as well as working practices.

Table 1: Issues tackled in pay settlements

Proportion of all 2018-19 deals Notes
Pay additions 21% improved-value 6%, maintained value 10%
Low pay measures 18% non-statutory 14%, NMW/NLW 3.5%
Cash-based deals 15% partly cash-based 13%, wholly cash-based 2%
Working time 12% improvements 9%, other changes 2%
Bonus or incentives 7% improved-value 2% (others mostly maintained)
Performance pay 6% role reduced, maintained or extended
Pay structures 5% improved in some way 3.5%, other issues 1.5%
Pay progression 5% enhanced or maintained 4%
Procedures 3% includes negotiations and date changes
Family-friendly 2% mainly improvements
Employment package 12% diverse issues including pensions in 3% of deals