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BARGAINING ON ANNUAL PAY RISES

How can this guide assist me?This document seeks to provide negotiators with the following material to assist in bargaining over annual pay increases:

An outline of the latest developments in key economic factors that shape pay claims, particularly:

Changes in the cost of living facing workers, which pay claims need to keep pace with if the buying power of wages are not to fall;

Pay settlement and average earnings growth figures, which can act as a benchmark for pay claims;

The context for pay claims in terms of the labour market, the National Minimum Wage, the Living Wage and other dimensions of the economy.

Directions to model pay claims, which are likely to be of most value to branches representing staff working in private companies and community / voluntary organisations, who are not covered by the major national bargaining bodies in local government, the NHS and education;

Advice on supplementing a claim through a staff survey and a model questionnaire that can be amended to suit local circumstances;

Bargaining on annual pay rises Last updated: October 2018 Contact: [email protected] 1

Contents of the guideLatest headline figures.............................................................................................................3

Inflation as benchmark for pay claims......................................................................................4

Historical inflation rates........................................................................................................4

Impact on real wages...........................................................................................................5

Main factors affecting inflation..............................................................................................6

Forecast inflation rates.........................................................................................................8

Reason for comparing wages to RPI....................................................................................9

Pay settlements and average earnings as benchmark for pay claims...................................11

Pay settlements..................................................................................................................11

Average earnings...............................................................................................................12

Wider context to consider referencing in pay claims..............................................................15

Labour market....................................................................................................................15

National Minimum Wage....................................................................................................16

Living Wage........................................................................................................................17

Comparisons of pay against other dimensions of the economy.........................................18

Appendix 1 - Pay rises over last year among UNISON’s largest bargaining groups.............19

Appendix 2 - Model pay claims..............................................................................................20

Appendix 3 – General model pay claim.................................................................................21

Appendix 4 – Model pay claim letter for local NHS contracts................................................27

Appendix 5 - Strengthening claims through a staff survey.....................................................28


Latest headline figures

Whole economy Private Public Community / voluntary

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Inflation as benchmark for pay claims

Historical inflation rates

The most widely reported measure of inflation in the UK is the Consumer Prices Index (CPI). However, the most accurate indicator of changes in the cost of living facing workers is the Retail Prices Index (RPI) [for the reasons why RPI is most relevant, see note below].

Over 2010 and 2011, RPI inflation centred on the 5% mark, before a decline saw the rate cluster around 3% during most of the three years between 2012 and 2014. Inflation then went into a further slide, with RPI around 1% over most of 2015. However, inflation began to rise again over 2016, escalated sharply throughout 2017 and then stablised around the 3% mark over 2018. The September 2018 figures stood at 3.3% for RPI and 2.4% for CPI.

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Source: Office for National Statistics, UK Consumer Price Inflation: September 2018, published October 2018

Between the start of 2010 and the end of 2017, the cost of living, as measured by the Retail Prices Index, rose by a total of 27.6%.


Impact on real wagesThe annual changes for full years since 2010 have been as below. The annual pay rises at an organisation can be set against these annual inflation rates to show the impact on the value of wages and examples of actual salaries can be used to show the impact in cash terms (if you need assistance in carrying out these calculations, contact Bargaining Support on [email protected] ).

Year % Annual Growth in Retail Prices Index 2010 4.62011 5.22012 3.22013 3.02014 2.42015 1.02016 1.82017 3.6

Across the economy, the most recent data from the Annual Survey of Hours and Earnings suggests that the real value of average UK pay packets has fallen by 13% since 2010, with employees losing over £3,000 a year from the value of their pay packet. The average worker would have accumulated over £24,434 more had their wage kept pace with inflation.

For the public sector worker who has not benefited from any incremental progression in their pay, the decline has been even sharper. Between 2010 and 2017, the public sector worker on the median wage saw a 17% cut in the real value of their earnings, leaving their 2017 wage £6,109 down on the value of their earnings at the start of 2010 and the accumulated loss from their wage failing to keep pace with inflation each year stood at over £32,000.


mailto:[email protected]

Main factors affecting inflation The changes in the price of components of the Retail Prices Index over the year to September 2018 are shown in the table below.

Item Average % increase to September 2018

Travel and leisure 4.5

Personal expenditure 3.6

Alcohol and tobacco 3.4

Housing and household expenditure 3.0

Consumer durables 2.7

Food and catering 1.8

All goods 3.2

All services 3.3

All items 3.3Source: Office for National Statistics, Consumer Price Inflation Reference Tables, October 2018

Within these figures, some costs are rising significantly faster, such as petrol and oil at 10.8%, electricity bills at 9.3%, gas bills at 5.5%, bus and coach fares at 5.4%, council tax and rates at 4.9%, rail fares at 4.4% and mortgage interest payments at 4.1%..

The price of housing also remains one of the biggest issues facing employees and their families1. Across the UK, house prices rose by 3.2%2 in the year to August 2018. However, the picture varied across the nations of the UK, with Wales experiencing the biggest increase at 6.2%, followed by Northern Ireland at 4.4%, Scotland at 4.1% and England at 2.9% (to see price changes in English regions, click here, or for a borough / county breakdown click here for England / Wales, here for Scotland and here for Northern Ireland).

Private rental prices grew less rapidly, but nonetheless rose 0.9% in the year to September 2018 across Great Britain.3 The latest data for Northern Ireland is less up-to-date, but the last study in 2017 showed sharply higher increases of 5.3%4. The average monthly rent for new tenancies in the UK is up 1.7% on last year and now stands at £9435 (for a regional breakdown of rents click here ).

Though not specifically assessed by CPI or RPI figures, childcare costs represent a key area of expenditure for many staff (UNISON surveys have consistently found that around a third of staff have child caring responsibilities).Therefore, it is also worth noting that the annual Family & Childcare Trust survey6 for 2018 found that the cost of a part-time nursery place for a child under two has grown by 7% over the last year and the annual cost now stands at £5,075 for 25 hours care a week. 1 LSL Property Services puts average house prices at £303,199 across England and Wales, £181,075 in Scotland and £179,237 in Wales. Land and Property Services puts average house prices in Northern Ireland at £132,795, though this figure is calculated using a different statistical method to LSL, so the figure is not comparable to the rest of the UK.2 Office for National Statistics, UK House Price Index: August 2018, published September 2018

3 Office for National Statistics, Index of Private Housing Rental Prices, September 2018 4 Ulster University, Performance of the Private Rental Market in Northern Ireland Jan– Jun 20175 HomeLet Rental Index, September 20186 Family & Childcare Trust, Childcare Survey 2018


https://homelet.co.uk/assets/documents/HomeLet-Rental-Index-Sep18-LO.pdf

https://www.finance-ni.gov.uk/sites/default/files/publications/dfp/NI%20HPI%20Statistics%20press%20notice%20Q2%202018.pdf

https://lsl-assets.s3.amazonaws.com/lslps/uploads/media_file/Scotland-House-Price-Index-September-2018.pdf

hhttps://lsl-assets.s3.amazonaws.com/lslps/uploads/media_file/England-Wales-House-Price-Index-August-2018.pdf

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/august2018#england-slowdown-driven-by-the-south-and-east-of-the-country

Current inflation rates can mask longer term changes in the cost of living that have taken place since 2010. The examples below show major increases in core costs that have surpassed average prices increases over the period.

Item % price rise 2010 - 2017



House prices

35% Bus and coach fares 44% Electricity 36%

Rail fares 27% Gas 23%


Forecast inflation ratesThe Treasury average of independent forecasts states that RPI inflation will average 3.1% over 2019. It will then remain at 3% or above every year until 2022, following the pattern shown in the graph below. These annual rates show the rate at which pay rises would be needed for wages just to maintain their current value.

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Source: HM Treasury Forecasts for the UK Economy, August 2018

If these rates turn out to be correct, the cost of living employees face will have grown by 13% between 2019 and 2022, following the pattern set out in the graph below.

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Reason for comparing wages to RPIUNISON believes that the Retail Prices Index (RPI) remains the most accurate measure of inflation faced by employees.

The most widely quoted figure for inflation in the media is the Consumer Prices Index, However, UNISON believes that CPI consistently understates the real level of inflation for the following reasons:

CPI fails to adequately measure one of the main costs facing most households in the UK – housing. Almost two-thirds of housing in the UK is owner occupied, yet CPI almost entirely excludes the housing costs of people with a mortgage;

CPI is less targeted on the experiences of the working population than RPI, since CPI covers non working groups excluded by RPI – most notably pensioner households where 75% of income is derived from state pensions and benefits, the top 4% of households by income and tourists;

CPI is calculated using a flawed statistical technique that consistently under-estimates the actual cost of living rises faced by employees. The statistical arguments are set out exhaustively in the report “Consumer Prices in the UK” by former Treasury economic adviser Dr Mark Courtney, which is summarised here and covered in full here

The Royal Statistical Society has consistently stated that CPI was never intended as a measure of changes in costs facing households. Rather, it was “designed in the 1990s for macroeconomic purposes” and its purpose is to act “as the principal inflation indicator for the Bank of England in its interest-setting rate role.”

The society sums up its position as follows:

“Why should the typical household accept an inflation index that: -

fails to take account of, or does not track directly, one of their main expenditure items: mortgage payments and other costs of house purchase and renovation;

gives more weight to the expenditure patterns of wealthier households than of other households;

fails to take account of interest on loans for a wide variety of purposes, ranging from student loans to loans for car purchase;

includes the expenditure of foreign tourists in the UK but not their own expenditure outside the UK;

fails to include council tax.”

Following recommendations made by the National Statistician in November last year, the Office for National Statistics (ONS) has now adopted the inflation measure CPIH as its “most comprehensive measure of inflation.” However, the National Statistician also seemed to acknowledge that both CPI and CPIH fail to measure the real costs facing workers as the ONS was also instructed to develop a measure that addressed the Royal Statistical Society’s concerns outlined above (this measure is not expected to be ready until later this year).

Though CPIH represents an improvement on CPI in attempting to incorporate housing costs, its measure of housing costs is based on treating all households as if they rented their accommodation. However, rents can follow sharply different trends to house prices, making


https://www.unison.org.uk/content/uploads/2014/11/TowebFull-report-Consumer-Price-indices-in-the-UK2.pdf

http://www.unison.org.uk/documents/4126

this a dubious assumption. Furthermore, the other more significant flaws in CPI outlined above remain a feature of CPIH.

CPI is the figure quoted almost uniformly across the media, but RPI remains by far the most common reference point for pay negotiations. Incomes Data Research found in its 2016 Reward Intentions Survey that 75% of employers regard RPI as the “most relevant to making decisions on the level of pay award,” compared to 53% for CPI, 5% for RPIJ and 3% for CPIH.


Pay settlements and average earnings as benchmark for pay claims

Pay settlementsPay settlements across the economy stand at 2.8%, which is still below the long-run median of between 3% and 3.5% that prevailed for over two decades until the 2008 economic crisis, but nonetheless represents a significant increase on recent years and the highest level since the crisis.

Pay settlements in the private sector stand at 2.8%, which is almost 1% higher than the rate in the public sector. Private sector settlements have been running far in advance of the public sector since 2010.

The table below also shows average settlements in the not-for-profit and utility sectors.

Pay claims should emphasise that employers falling below relevant rates can expect damage to their ability to recruit and retain high quality staff.

[To reference the latest pay settlements for UNISON’s largest bargaining groups, see appendix one at the end of this document, or to seek more detailed figures on pay settlements within a particular sector, contact Bargaining Support on [email protected]]

Sector Average pay settlementsAcross economy 2.8% Private sector 2.8%Public sector 2.0%Not for profit 2.5% Energy & gas 3.5%Water & waste management 2.5%

Source: Labour Research Department, settlements year to October 2018

Average pay settlements across the economy since 2010 are shown by the table below. The dangers of falling behind market rates over the long term can be demonstrated to employers as part of pay claims by contrasting the pay awards in an organisation against this economy average (for more detailed averages by sector, contact Bargaining Support on [email protected]).

Year Average pay settlements 2010 2.0%2011 2.5%2012 2.5%2013 2.5%2014 2.5%2015 2.2%2016 2.0%2017 2.0%

Average earnings



The graph below shows trends in average earnings growth over the last two years, which mirror pay settlements in showing the competitiveness of public sector wages in decline. Since April 2013, private sector earnings growth has been running ahead of the public sector every month except two. However, the end of the public sector pay cap has seen the gap narrowing and the latest figures showed private sector growth failing to outpace public sector growth for the first time in over four years. In August 2018, the whole economy average stood at 2.7%, in line with both the private sector and public sector growth figure.

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Source: Office for National Statistics, Labour Market Statistics, October 2018

Forecasts of average earnings predict that growth will average 2.4% in 2019 and then a steady escalation every year will take the rate to 3% by 2022, following the pattern below7.

These predicted rates can again be used to show the pay increases needed for an employer to avoid slipping behind the going rate and suffering damage to recruitment and retention.

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Note on comparisons between public and private sector 7 Office for Budgetary Responsibility, Economic and Fiscal Outlook, February 2018


Though the campaign by the government and much of the media to paint public sector workers as overpaid relative to private sector workers is not currently running at the pitch it was when the public sector pay cap was introduced, average earnings have often be used as the basis for making this false assertion.

The claim is usually based on a crude comparison of average pay that doesn’t take account of the different type of jobs in the public and private sector. The latest study by the Office for National Statistics that ensured the comparison was conducted on a like-for-like basis, taking into account region, occupation, gender and job tenure, found that the average public sector worker was paid 1% less than a private sector worker in 2016.8 And if organisational size is taken as a factor in the comparison, the gap grows to 5.5% (the graph below shows how the differential calculated on this basis has favoured the private sector since 2010).

Before public sector average earnings growth dropped well below the private sector rate in 2013, average earnings growth rates were also often used as a basis to argue that the public sector continues to see improvements in pay that are not matched by the private sector and particularly as a basis for attacking pay progression.

The flaw in these arguments is that the use of average earnings growth for comparisons does not simply reflect changes due to pay settlements and pay progression.

Changes in the average are affected by a multitude of factors that affect the composition of the public and private workforce. Any changes that swell the lower paid end of the workforce and/or reduce the proportion of higher paid employees, such as differences between the sectors in recruiting staff on part time or zero hours contracts, or redundancies that hit the most recent recruits hardest, will act as a downward pressure on the average.

The government’s drive toward greater outsourcing in itself tends to lower private sector average earnings growth and raise public sector growth because of the marked tendency for outsourcing to focus on lower paid sections of the workforce.

Therefore, average earnings growth does not offer any kind of sound basis for judging actual changes in the pay packet of a worker in the public or private sector. Pay settlement data forms a much sounder basis for comparison as it eradicates the differences in workforce composition that affects average earnings growth comparisons.

The Annual Survey of Hours and Earnings (ASHE) provides detailed data that can form useful comparators for changes in average earnings experienced by UNISON members. The

8 ONS, Analysis of factors affecting earnings using ASHE 2016, October 2016


table below shows the change in median gross annual pay for full-time staff within the main job categories listed.

Job Type Annual % change 2016-17All employees 2.0Managers, directors and senior officials 1.7Professional occupations 1.0 Science, research, engineering and technology professionals 2.1 Health professionals 0.4 Teaching and educational professionals 0.2 Business, media and public service professionals 2.3Associate professional and technical occupations 2.4 Science, engineering and technology associate professionals 1.4 Health and social care associate professionals 0.7 Protective service occupations 3.6 Culture, media and sports occupations 2.0 Business and public service associate professionals 2.2Administrative and secretarial occupations 1.8 Administrative occupations 1.9 Secretarial and related occupations 1.7Skilled trades occupations 1.6 Skilled metal, electrical and electronic trades 1.1 Skilled construction and building trades 1.9Caring, leisure and other service occupations 2.3 Caring personal service occupations 2.1 Leisure, travel and related personal service occupations 3.0Sales and customer service occupations 3.7 Sales occupations 3.5 Customer service occupations 3.6

A listing of earnings growth for more specific jobs within these categories can be found on the Office for National Statistics website by clicking here

A breakdown of earnings growth is available by region and local authority


https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/placeofworkbylocalauthorityashetable7

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2017provisionaland2016revisedresults/relateddata?:uri=employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/an

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/occupation4digitsoc2010ashetable14

Wider context to consider referencing in pay claims

Labour marketThe general pattern across the economy is one of falling unemployment and therefore escalating recruitment and retention problems, though the scale of underemployment is alleviating some of these pressures for employers

The unemployment rate has been in decline from a peak of 8.5% in 2011 to 4% over the three months to August 2018, bringing the rate to a 43-year low. Over the same period, the number of unemployed people per vacancy has fallen from 5.8 to 1.6.

Unemployment rates are forecast to remain around current levels over the next year, averaging 4.2% in 20199, while growth in the value of the economy (GDP) picks up slightly to 1.5%.

The latest CIPD Labour Market Outlook report states that 66% of all employers with vacancies are reporting hard-to-fill vacancies – a figure that has grown from 56% in the spring of 2017. Across sectors, the public sector reports the highest figure at 70%, while private sector records 66% and the voluntary sector 57%.10

The median number of applicants for low skilled roles has dropped from 25 in autumn 2015 to 20 in summer 2018. Among medium skilled roles, the number of applicants has dropped from 15 to 10, and among low skilled roles, from 8 to 6.

Consequently, labour turnover rates are up to 19.8% across the economy11 and just under half of employers are reporting that they are under significant pressure to raise wages for high and middle skilled roles12

The Office for National Statistics indicates that the vacancy rate across the economy is 2.8%. Sector analysis shows the public administration category at 1.6%, education at 1.9%, human health and social work at 3.3%, the electricity and gas category at 2.6% and the water supply category 2.2%.

Therefore, data gathered on turnover and / or vacancy rates within an employer can be contrasted within these wider rates to illustrate a particular recruitment and retention problem. For more detailed figures on sector turnover rates, contact Bargaining Support on [email protected].

9 HM Treasury, Forecasts for the UK Economy, August 201810 Chartered Institute of Personnel Development, Labour Market Outlook, Winter 2017-1811 XpertHR, Labour turnover rates 201812 CIPD, Labour Market Outlook, Summer 2018



National Minimum Wage The legally enforceable National Minimum Wage sets the floor for any pay scale. The current minimum hourly rates are set out below.

Category of staff Rate from April 2018

Aged 25 and over £7.83

Aged 21 - 24 £7.38

Aged 18 - 20 £5.90

Aged 16 - 17 £4.20

Apprentices £3.70

The Office for Budgetary Responsibility’s forecast for the top two rates until 2022 is set out below:

Category of staff 2019 2020 2021 2022

Aged 25 and over £8.20 £8.57 £8.82 £9.09

Aged 21 - 24 £7.57 £7.76 £7.97 £8.21

These forecasts are based on expected changes in average earnings and movement toward the government target for rates to reach 60% of the average earnings of staff aged 25 or over by 2020. However, they are just estimates and no changes come into force until new rates are announced by the government.

UNISON’s National Minimum Wage guide carries a thorough treatment of the issue and includes factors to consider within a pay claim, such as cascading increases up the pay scale and eliminating youth or apprentice rates if the organisation applies them.


https://www.unison.org.uk/content/uploads/2018/07/National-Minimum-Wage.pdf

Living Wage

UNISON policy is to press for the Living Wage as the minimum rate of pay and where that rate has been achieved to press for a minimum of £10 an hour.

The Living Wage has become a standard benchmark for the minimum needed for low-paid staff to have a “basic but acceptable” standard of living.

The rates, announced annually by the Living Wage Foundation, are currently £8.75 an hour outside London and £10.20 an hour in London.

Studies supported by Barclays Bank have shown that Living Wage employers report an increase in productivity, a reduction in staff turnover / absenteeism rates and improvements in their public reputation.

Consequently, there are now over 4,600 employers accredited as Living Wage employers by the Living Wage Foundation, including some of the largest private companies in the UK, such as Barclays, HSBC, IKEA and Lidl.

Across the public sector, minimum rates at or above the Living Wage have been established for staff among all Scotland’s public sector organisations, NHS Agenda for Change throughout Britain, Further Education colleges in Wales and all UK universities (for staff on a 35-hour week). Support staff in more than 12,000 schools across the UK are also set to be paid the Living Wage as a result of national agreements.

Furthermore, even where national agreements have not achieved a Living Wage settlement, a major proportion of individual councils, schools and academies have taken up the Living Wage on their own initiative. A UNISON Freedom of Information survey covering local government, universities, further education colleges and police authorities that drew over 900 responses found that 51% of employers across these sectors already pay at least the Living Wage to their lowest paid staff.

Pay claims that include a Living Wage element can draw on the greater detail set out in UNISON’s Living Wage guide on supporting arguments and the bargaining factors to consider.


https://www.unison.org.uk/content/uploads/2018/07/Living-Wage.pdf

Comparisons of pay against other dimensions of the economyThe graphs below put the performance of public sector pay in the context of developments across the wider economy. While the average value of total public sector pay rises between 2010 and 2017 has been 5.5%, the value of the economy has increased by 15%, the cost of living has risen by over 27%, company profits have jumped by 30%, the pay of chief executives for the UK’s largest companies has grown by 37% and total dividends paid to shareholders have grown by 75%.

Pay rise since 2010* Value of economy *** Cost of living**** Company profits ***** Top bosses' pay ** Dividends to shareholders*****

*

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%

How does public sector pay compare over the last seven years

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Sources:

* Based on median public sector pay rise of 0.4% in 2010 (Incomes Data Services), followed by pay freezes in 2011 and 2012, then 1% pay cap from 2013 to 2017

** Based on growth in average FTSE 100 chief executive pay between 2010 and 2017 from CIPD / High Pay Centre, Executive Pay, August 2018

*** Based on growth in gross domestic product between 2010 and 2017 from Office for National Statistics, Second Estimate of GDP, Quarter Q4 (Oct to Dec) 2017

**** Based on Retail Prices Index between January 2010 and December 2017, taken from Office for National Statistics, Consumer Price Inflation, January 2018

***** Based on corporations' operating surpluses between 2010 and 2017 from Office for National Statistics, Second Estimate of GDP, Quarter Q4 (Oct to Dec) 2017

****** Based on dividends paid between 2010 and 2017 from Link Asset Services, UK Dividend Monitor, Q4 2017


Appendix 1 - Pay rises over last year among some of UNISON’s largest bargaining groups

Bargaining Group Last settlement date Basic increase Variations on basic increase

Local Government NJC 1 April 2018 2% Rises ranging from 9.2% to 3.7% for SCPs 6-19

Local Authority Chief Officers 1 April 2018 2% from 1 April 20182% from 1 April 2019

Youth and Community Workers 1 September 2018 2% from 1 Sept 20182% from 1 Sept 2019

Rises ranging from 14.6% to 6.1% over two years on pay point 2 to 6

NHS Agenda for Change (England)

1 April 2018 6.5% over 3 years 1.1% lump sum for staff at the top of most bands, larger increases for those below the top of the band, immediate increase of £2,000 pa to the bottom pay point to take it above the real Living Wage

NHS Agenda for Change (Scotand)

1 April 2018 9% over 3 years for staff at top of most bands

Larger increases for those below the top of the band, increase to the lowest pay point to take it above the real Living Wage

NHS Agenda for Change (Wales)

1 April 2018 6.5% over 3 years 1.1% lump sum for staff at the top of most bands, larger increases for those below the top of the band, increase to consolidate Living Wage supplement and take the bottom pay point above the real Living Wage

Police Staff (Scotland) 1 September 2017 3% over 1.5 years 4% for staff earning below £22,000, 2.3% for staff earning between £36,500 and £80,000, £1,600 for staff earning above £80,000


Appendix 2 - Model pay claims

Most UNISON members are covered by national public sector bargaining structures through which a central pay claim is made on behalf of all staff covered by that bargaining machinery.

However, pay claims are also necessary where public authorities are able to opt out of nationally agreed arrangements, where outsourcing has led to delivery of services by private and community / voluntary and in the utility sectors where private companies predominate.

To assist in developing a pay claim in these circumstances, a general model is set out below in Appendix 3.

However, where contractors or subsidiary companies are operating in the NHS in England, the letter set out in Appendix 4 on page 20 should be utilised instead to press for implementation of the NHS pay deal. The pay deal is summarised in the Framework Agreement for the Reform of Agenda for Change and can be attached to your pay claim letter. Remember to liaise with your regional organiser on this claim and campaign.


https://www.nhsemployers.org/-/media/Employers/Documents/Pay-and-reward/FINAL-Framework-agreement-21-March-2018.pdf?la=en&hash=DBBB10AC268973D48C8951EBB40F53E5A6CF7CAA

https://www.nhsemployers.org/-/media/Employers/Documents/Pay-and-reward/FINAL-Framework-agreement-21-March-2018.pdf?la=en&hash=DBBB10AC268973D48C8951EBB40F53E5A6CF7CAA

Appendix 3 – General model pay claim

PAY CLAIM FOR [INSERT YEAR] SUBMITTED BY UNISON TO [NAME OF ORGANISATION]

1. INTRODUCTION

This pay claim is submitted by UNISON on behalf of staff working for [organisation].

The claim is set at a level that we believe recognises the following key points:

Major increases in the cost of living over recent years have significantly reduced the value of staff wages;

Appropriate reward is needed to sustain the morale and productivity of staff in their crucial role of delivering high quality services;

Appropriate reward is needed for the increased workload and stress placed on staff against a background of major budget cuts;

Average pay settlements across the economy have been running ahead of those received by [organisation] staff over recent years, increasing the likelihood of recruitment and retention problems in the long term;

Increased vacancy rates across the economy make a competitive wage rate ever more crucial;

Nobody should be paid less than the nationally recognised Living Wage rate, which has become a benchmark for the minimum level of decent pay across the UK and is now paid by large sections of the public services and many major private companies.

2. SUMMARY OF CLAIM

We are seeking:

A [__%] increase on all salary points and allowances [If you are seeking an increase in line with a related public sector bargaining group, the key features of the most recent deals are set out in Appendix 1]

An additional increase in rates for staff at the bottom of the pay scale to bring their pay up to the level of the Living Wage.

[Any other additions to payments or improvement to conditions – UNISON guides on typical additional components, such as unsocial hours, gender pay, terms for working parents, adjustments to hours, high cost area supplements or motor allowances, can be found on the bargaining guides web page]


https://www.unison.org.uk/get-involved/learning-development/activists/bargaining-guides/

3. FALLING VALUE OF PAY

The table below demonstrates the major fall in living standards suffered by staff over recent years.

[Organisation] pay increases Rise in cost of living13

(as measured by Retail Prices Index)

2010 [Insert pay rise] 4.6%








This means that, while the cost of living has risen by 27.6% over the last eight years, pay in [organisation] has risen by just [x%], which means that thousands of pounds have been cut out of the value of staff wages [if you need assistance in calculating the actual loss on some example salaries, contact Bargaining Support on [email protected]]

Latest inflation figures have now hit 3.3% and Treasury forecasts indicate that the cost of living is set to average 3.1% throughout 2019, followed by three further years of inflation running at 3% or above, in line with the graph below.

2019 2020 2021 20220

0.5

1

1.5

2

2.5

3

3.53.1 3.0 3.1 3.2

Forecast annual increase in cost of living

% in

crea

se

Source: HM Treasury, Forecasts for the UK Economy, August 2018

13 Office for National Statistics, Consumer Price Inflation Reference Tables, March 2018



4. FALLING BEHIND AVERAGE PAY RATES

The ability of [organisation] to attract and retain staff in the long term will be damaged if the pay of its staff falls behind the going rate in the labour market.

The table below shows that pay settlements over the last year across the economy have been running at 2.8%, which stands in contrast to the most recent [organisation] settlement of [x%].

[Amend this table to show the sectors most relevant to staff within the organisation and contact Bargaining Support at [email protected] for further data if you want to make a comparison with a more specific sector or organisations within a sector]

The table below shows that pay settlements have not only been running behind economy averages this year, [organisation]’s pay rates have been growing steadily more uncompetitive over a sustained period.

Year Average pay settlements [Organisation] pay increases2010 2.0% [Insert pay rise]2011 2.5% [Insert pay rise]2012 2.5% [Insert pay rise]2013 2.5% [Insert pay rise]2014 2.5% [Insert pay rise]2015 2.2% [Insert pay rise]2016 2.0% [Insert pay rise]2017 2.0% [Insert pay rise]

[For more detailed averages by sector, contact Bargaining Support at [email protected]]


Sector Average pay settlementsAcross economy 2.8% Private sector 2.8%Public sector 2.0%Not for profit 2.5%

Source: Labour Research Department, settlements year to July 2018



5. LIVING WAGE BECOMING STANDARD MINIMUM PAY BENCHMARKThe Living Wage has become a standard benchmark for the minimum needed for low-paid staff to have a “basic but acceptable” standard of living.

[Organisation] is now competing in a labour market where the Living Wage of £8.75 an hour outside London and £10.20 an hour in London has become an increasingly common minimum point in the pay scale.

Studies supported by Barclays Bank have shown that Living Wage employers report an increase in productivity, a reduction in staff turnover / absenteeism rates and improvements in their public reputation.

Consequently, there are now over 4,600 employers accredited as Living Wage employers by the Living Wage Foundation, including some of the largest private companies in the UK, such as Barclays, HSBC, IKEA and Lidl.

Across the public sector, minimum rates at or above the Living Wage have been established for staff among all Scotland’s public sector organisations, NHS Agenda for Change throughout Britain, Further Education colleges in Wales and all UK universities (for staff on a 35-hour week). Support staff in more than 12,000 schools across the UK are also set to be paid the Living Wage as a result of national agreements.

Furthermore, even where national agreements have not achieved a Living Wage settlement, a major proportion of individual councils, schools and academies have taken up the Living Wage on their own initiative. A UNISON Freedom of Information survey covering local government, universities, further education colleges and police authorities that drew over 900 responses found that 51% of employers across these sectors already pay at least the Living Wage to their lowest paid staff.

[A listing of accredited Living Wage employers is published here and may be useful for developing a list of organisations that can put pressure on the organisation by showing local or sectoral employers that are already paying the wage]

[For more detailed guidance if you wish to expand on arguments for the Living Wage, see the UNISON guide here – this includes further material on the damaging impact for employers of low pay, dispelling confusion with the government’s “national living wage” and cascading benefits up the pay scale].


https://www.unison.org.uk/bargaining-guides/

https://www.livingwage.org.uk/accredited-living-wage-employers

6. RECRUITMENT AND RETENTION PRESSURES BUILDINGWith the unemployment rate at its lowest level in 43 years and vacancies escalating across the economy, competitive wage rates are becoming ever more crucial.

The general unemployment rate has been in decline from a peak of 8.5% in 2011 to 4% over the three months to August 2018, while the number of unemployed people per vacancy has fallen from 5.8 to 1.6 over the same period.

Unemployment rates are forecast to remain around current levels over the next year, averaging 4.2% in 201414.

[If you can obtain figures for the organisation showing an increase in the vacancy rate (the number of vacant posts divided by the total number of posts in the organisation) set them out here. Median turnover rates are estimated at 19.8% across the economy15, so if you have figures on turnover rates (calculated by taking the total number of leavers in a specified period - usually 12 months - and expressing the number as a percentage of the number of people employed during that period) that indicate the organisation is suffering higher than average turnover, insert them here. [For information on turnover rates in specific sectors, contact Bargaining Support at [email protected]]

7. MORALE UNDER THREAT

Working against a background of budget cuts, staff have been facing greater workload pressures. The resulting increased stress puts the morale of the workforce at risk and poses a long term threat to [organisation’s] ability to provide a consistent quality of service.

[Set out any evidence you can gather on the following factors Increasing demands on the service;

Reductions in staffing;

Staff feeling greater stress;

Staff suffering falling morale;

The impact of these pressures showing themselves in rising sickness absence, higher staff turnover or declining service standards

It is in this area that a short survey of staff may provide the most valuable material to support the evidence. An amendable basic pay survey is set out in appendix 5 below]

Analysis by the Social Market Foundation has shown workers in the public sector and the energy sector are experiencing some of the highest levels of stress across the economy. You may be able to pick out the figures for relevant sectors taken from page 9 of its 2016 Working Well report ]

14 HM Treasury, Forecasts for the UK Economy, August 201815 XpertHR, Labour turnover rates 2018


http://www.smf.co.uk/wp-content/uploads/2016/01/Working-Well-How-employers-can-improve-the-wellbeing-and-productivity-of-their-workforce.pdf

8. AFFORDABILITY

The affordability of this claim is clear from the latest [organisation] accounts, which show a surplus of [£_] for 2017/18.

Against this figure, the accounts suggest that a [x%] pay rise will cost [£_].

We also note the affordability of an [x%] pay rise for the chief executive, taking [his/her] total remuneration to [£_]

[For the accounts of a private or community / voluntary organisation or assistance in interpreting accounts, contact Bargaining Support at [email protected]]

9. CONCLUSIONThere can be no doubt that all [organisation] staff have seen the value of their earnings fall considerably over recent years and evidence suggests that they are also falling behind pay settlements for comparable jobs.

Combined with these developments, the last year has seen intensified pressures placed on staff at the same time as greater job choices are opening up for staff in an improving labour market.

Therefore, this pay claim represents a very reasonable estimate of the reward staff deserve for their dedication, skill and hard work and the minimum improvement in pay needed to maintain workforce morale for delivering consistently high quality services.



Appendix 4 – Model pay claim letter for local NHS contracts

Dear

Reference: Pay for [insert company and location] staff in 2018

I am writing to on behalf of UNISON representing members on [insert location] contract. You will be aware that following recent negotiations, the NHS trade unions have agreed to a three year pay deal that was formally ratified by the NHS Staff Council on 27 June 2018. I have attached a copy of the framework agreement for your reference.

I am now formally writing to you to ask that [insert company] implement the NHS pay deal for all staff you employ. We would ask that the pay deal be honoured for both staff that transferred into your organisation through the Transfer of Undertakings and Protection of Earnings (TUPE) and those who have since been employed on other [insert company] contracts.

Please can you confirm your intention to honour the three year NHS pay deal and all elements of the framework agreement, including the timescales you expect for the full implementation.

Many thanks


Appendix 5 - Strengthening claims through a staff survey

The model agreement above provides a framework for a claim that draws on broad national or sectoral information to make a case. However, to tailor the claim effectively to a particular employer, the most valuable information can often be drawn from members themselves.

Therefore, consider conducting a short survey to identify the key pay related concerns of members and generate data, quotes or examples that are likely to influence the employer.

However, surveys can entail some notable pitfalls that can be addressed by observing the following points:

Start planning the survey in good time to develop the questions, allow a two or three week period for responses and sufficient time for result analysis before incorporating within the claim and lodging the claim at the appropriate point in the annual pay negotiation cycle.

Try to keep the survey short so that it is not overly demanding on staff time and they are more likely to complete it. As a rough guide, it should take between five and 10 minutes to complete, which means between 10 and 30 questions.

Requiring answers that are specific reduces the time necessary for analysis. For example, if asking “How would you describe morale?”, requiring responses of High, Moderate or Low will enable you to quickly establish from the results that, for instance, 64% of staff see morale as low. If the answer is left open, responses will have to be analysed one by one to place them in categories and provide usable percentages for a claim.

However, there can be a place for open-ended questions as they can generate quotes and examples of value to a claim. For instance, supplementing a survey with a question such as “In what way has your experience of work changed over the last year?” may give you a telling quote that makes a point more effectively than a page of percentages.

Profile questions are normally asked at the end of surveys to enable the results to be broken down according to certain categories. For example, a gender question will enable you to see how the pay concerns of women differ from that of men. Therefore, think about how you will want to break down results and establish the profile questions accordingly.

Ensure that the survey carries a preamble that emphasises to members that the survey is completely anonymous, makes plain the purpose for which the gathered data will be used and tells them approximately how long the survey will take to complete.

Always make sure that the data you submit to the employer protects your members’ identities.

The best method for protecting confidentiality and for reducing the time necessary to analyse results is to conduct an online survey. The recommended online survey service is set out below. However, if the survey is sent out to email addresses, care has to be taken that this is compliant with the General Data Protection Regulations. Distribution should take place through UNISON’s WARMS system (Web Access


RMS), to ensure that the emails used for members are those that that they have provided for such purposes to the union.

Consider alternative ways to gain the benefits of an online survey without the restrictions of email distribution. For instance, you could place the survey link on social media if you are confident that it would be accessed by sufficient staff without notifying emails. Alternatively, you could seek to develop a joint pay survey with the employer (if that did not mean too many compromises on questions asked), which the employer could then distribute to staff.

If you decide on manually distributing a hard copy survey, ensure that the survey can be returned as confidentially as possible. Like the examples above which do not rely on union email distribution lists, the advantage to this method is that it can go wider than UNISON membership if agreed with any other unions representing staff. In this way, it may both gather a wider section of staff views that carries more weight with the employer and assist in recruiting members by highlighting the role of the union in advancing staff terms and conditions.

Online survey providers

SurveyMonkey is one of the most widely used online survey services but UNISON now recommends SurveyGizmo as it has EU servers and therefore complies with EU data protection law, whereas SurveyMonkey servers are US based.

SurveyGizmo offer various different packages, but UNISON recommends the standard version of SurveyGizmo, as it fulfils the required data protection and anonymity features.

Branches must set up their own online surveys and cannot use regional SurveyGizmo accounts. We realise that at around £700 for the year SurveyGizmo may seem expensive, but branches can use it for unlimited surveys including branch mapping surveys, consultations and member questionnaires throughout the year.

It is possible to sign up for SurveyGizmo here: https://www.surveygizmo.eu

[Please make sure that you use the .eu address and not the .com address so that it is EU based]

SurveyGizmo’s instructions on sending out survey invitations to email addresses are here:

https://help.surveygizmo.com/help/share-survey-via-email

Its instructions on how to make voting anonymous are here: https://help.surveygizmo.com/help/anonymous-surveys

For every SurveyGizmo account that contains UNISON member data, a branch elected official should notify their Regional Head.


https://help.surveygizmo.com/help/anonymous-surveys

https://help.surveygizmo.com/help/share-survey-via-email

https://www.surveygizmo.eu/

https://www.surveygizmo.eu/

https://www.surveymonkey.co.uk/

UNISON SURVEY

UNISON [branch name] is currently assembling a pay claim to put to [employer’s name] for the annual pay rise from [insert date]. In order to ensure this claim is firmly based on your experiences and views, we would greatly appreciate it if you could spare the time to complete this survey.

The survey covers just 14 questions and would normally take less than seven minutes to complete. All responses to this questionnaire are anonymous and will be treated as confidential. It will not be possible to identify any individual from information used for the claim.

PAY1. Compared to 12 months ago, how do you feel your pay has changed relative to the cost of living?

I am better off

I am worse off

Neither better nor worse off

2. Are you dependent on any of the following additional payments to sustain your standard of living?

Unsocial hours

On-call

Overtime

Second job

Other - please specify here


WORKING CONDITIONS3. Compared with this time last year, what would you say have been the changes to the following dimensions of working conditions in your working area or department?

Increased Decreased Remained the same Don’t know

Workload

Stress

Number of staff

Number of service users

Quality of service

Use of temporary staff

4. Has your increased workload resulted in?

A detrimental effect on your job performance

A detrimental effect on your personal life

Little or no effect

5. In relation to your working life, on a scale of 1 to 10, where 1 is extremely low and 10 is extremely high, how motivated are you?


1

2

3

4

5

6

7

89

10


6. How would you describe morale in your workplace?

Very high

High

Moderate

Low

Very low

7. Compared to 12 months ago, how has morale changed?

Improved

Worsened

Remained the same

Not sure/don’t know


RECRUITMENT AND RETENTION

8. How worried are you about your job security?

Very worried

Fairly worried

Not worried

Not at all worried

9. How seriously have you considered leaving your current position over the last year?

I have not considered leaving

Not very seriously

Fairly seriously

Very seriously

10. How have recruitment and retention difficulties over the last year changed in your department/workplace?

Less difficult

About the same

More difficult

Do not know

11. Over the last year, have staff shortages occurred in your workplace ...?

Frequently

Sometimes

Occasionally


Never

Not sure/don’t know


PROFILE

12. Do you identify as?

Male

Female

In another way

Prefer not to select

13. What age range are you in?

16-20

21-30

31-40

41-50

51-65

66 or over


14. What is your ethnic group? White / British

English Scottish Welsh Irish Any other white background

Mixed

White and Black Caribbean White and Black African White and Asian Any other mixed background

Asian, Asian British, Asian English, Asian Scottish, Asian Welsh

Indian Pakistani Bangladeshi Any other Asian background

Black, Black British, Black English, Black Scottish, Black Welsh

Caribbean African Any other black background

Chinese, Chinese British, Chinese English, Chinese Scottish, Chinese Welsh or other ethnic group

Chinese Any other ethnic group
