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Issue No. 113 July 2003
authority, the right to enforce action in past
LATEST PAY SETTLEMENT TRENDS cases involving former workers. The Inland
In this issue of Revenue is now looking at cases that have
Bargaining Income Data Services (IDS) has revised arisen since last April.
Update we look their analysis of settlements upwards to a
at the latest pay median of 3.2% for the second quarter of Workers who receive some of their salary
settlement 2003. This follows an increase in the level in tips will also benefit from new legislation.
trends; the of public sector deals at 3.2% or above, Under the original NMW Regulations, tips
closing of including the NHS groups that achieved a paid directly from customers to staff (such
loopholes in 3.225% deal. Opted out local authorities as waiters or hairdressers) did not count as
the National and the not-for-profit sector have also wages for the purpose of the minimum
Minimum tended to follow the local government wage. However tips which went through
Wage; the national agreement and settle at 3.5%. the employer's payroll (which often happens
extension of when a service charge is automatically
the Working Inflation is currently around the 3% mark, added to restaurant bills did) count towards
Time directive, and although deals are now keeping pace calculating whether the employee has been
plans to end with inflation, they are not giving the real paid the minimum wage.
discrimination pay increases which were taking place at
on the grounds this time last year. The government has introduced a Bill,
of age, more which will amend regulation 31 of the
private contract IRS Employment Review reports that the National Minimum Wage Regulations 1999 so
staff victories; level of deals is running ahead of last year, that no tips, whether paid directly to the
and the new and inflation is a key factor in this. They employee or through the payroll, will count
regulations on find that half of all deals are between 2.5% as remuneration going towards the
information and and 3.5%, and the pay award level has minimum wage.
consultation of settled around the 3% mark for the last 5 For more information see Bargaining Support
workers. Also months. IRS finds that the median increase factsheet ‘National Minimum Wage’,
included is this in the 12 months to the end of May for the www.unison.org.uk/bargaining/factsheets.asp
month‟s whole economy was 3.0%. For the private
bargaining sector the figure is 2.9%, and for the public
statistics. sector 3.4%.
WORKING TIME DIRECTIVE EXTENDED
The Bargaining 400,000 more workers will receive
Support Group In the private sector the picture depends on protection under the working time
can be companies varying fortunes. Construction directive. The regulations come into effect
contacted at: industry deals continue to run well above on 1 August 2003 and cover non-mobile
UNISON inflation, with the Construction Industry workers in the road, rail, air and sea
Bargaining Joint Council agreeing a 5.1% rise in the first transport sectors; mobile workers in the
Support, year of a 3-year deal. rail and non-HGV road transport sectors;
1 Mabledon and offshore oil and gas workers.
Place, London The increase in the National Minimum
WC1H 9AJ Wage from this October has prompted Under the regulations, workers will be
Tel: some retailers to give substantial increases entitled to an average 48-hour working
020 7551 446 to their bottom rates. Safeway gave 9% to week; four weeks' paid annual holiday; rest
Fax: the lowest grades from March 2003, and breaks; health assessments for night
020 7551 1766 supermarket Budgens and wholesaler AF workers; and an 8-hour limit on night
email: Blakemore are reviewing their rates. working.
bsg@unison.co. The TUC has a briefing on working time
uk changes at www.tuc.org.uk/law/tuc-6863-f0.cfm
www.unison.o MINIMUM WAGE LOOPHOLES CLOSED
rg.uk under New legislation which came into effect on 8
“Pay and July 2003 now entitles former workers to
RETIREMENT AND AGE EQUALITY
Conditions”. claim back pay for underpayment of the Plans to end age discrimination have just
NMW-something which was not included in been announced. Employers, training
the original legislation. The new law also organisations and trade organisations will be
gives the Inland Revenue, the enforcing banned from treating people differently on
Bargaining Support Group e-mail: bsg@unison.co.uk
Issue No. 113 July 2003
the basis of age in most circumstances, and INFORMATION AND CONSULTATION UPDATE
the age at which workers can be forced to
retire will be raised to 70. The new law will Earlier than expected, the government has
come into force in October 2006. published the draft of the Information and
Consultation (I&C) regulations. The
Although the measure has been broadly regulations will, when they become law, give
welcomed, unions have expressed concern workers or their representatives the right
that unscrupulous employers will try to use to information and effective consultation
it as a way out of their pension scheme about an employer‟s current and future
problems. Some employers are already financial position, and planned changes to
trying to extend the normal retirement age working arrangements including outsourcing
so workers pay more contributions to and redundancy.
cover shortfalls in their pension schemes.
The government itself is considering The provisions for triggering the
incentives for people to delay taking the procedures are that a written request by
state pension for 5 years, and raising the 10% of the employees is initially required.
normal pension age for all new public sector Following this the employer has 6 months
workers. to negotiate with „genuine employee
representatives‟ to agree practical
At the other end of the age spectrum, the arrangements for I&C. This has to be
lower youth rate of the National Minimum agreed by all the employee representatives,
Wage is set to remain. or 50% of employees in a ballot. If
The Department of Trade and Industry agreement cannot be reached then there
consultation document is available on are fallback arrangements.
www.dti.gov.uk/er/equality/age.htm
If there are already „pre-existing
arrangements‟ in writing which have
MORE VICTORIES FOR CONTRACT WORKERS „employee approval‟ then these can
The series of successes for private contract continue. However, this has to be shown
workers in the NHS has continued, with either by the recognised unions having over
union members in London and Bolton 50% membership, or by a ballot of the
achieving significant improvements. After workforce. There are sanctions in place to
taking strike action on 2 occasions, porters enforce the rules, with a maximum penalty
and domestics working for ISS at the Royal of £75,000 on bosses who don‟t comply.
Bolton Hospital achieved a 10.25% pay rise,
and a basic rate of £5 an hour. Other Although the regulations could give workers
improvements include sick pay from the greater influence there are some serious
first day off; long-service leave; increased dangers as well. Firstly, the employer can
night and weekend enhancements; and pay initiate negotiations on their own accord
and conditions to be harmonised with the (without the 10% request) and set up a
NHS by 2004. The campaign led to a surge works council to pre-empt the
in membership, rising from 30 at the outset establishment of a union.
of the dispute, to 205 by the end.
Secondly, if there are „pre-existing
Workers in London‟s Whipps Cross, arrangements‟ in place and an employee
Tower Hamlets and Homerton hospitals request is made to initiate the new I&C
have also achieved significant pay rises with procedures, the employer can try and block
harmonisation to NHS conditions by 2006. it. In this case, a ballot would be held and if
The campaigns there have also seen 40% of all employees (not just those who
organisational gains for UNISON, with a 6- vote) don‟t support the establishment of the
fold increase in membership at Whipps procedures the employer can ignore the
Cross. request. This could undermine the position
The ‘Private Contract Claims Report’ with of the union and encourage the employer to
details of these and other recent successes is de-recognise it.
available from the Bargaining Support Group or The regulations are available at
on www.unison.org.uk/bargaining/factsheets.asp www.dti.gov.uk/er/consultation/perf_work.htm
Bargaining Support Group e-mail: bsg@unison.co.uk
Issue No. 113 July 2003
KEY NEGOTIATING STATISTICS
INFLATION AVERAGE
EARNINGS
RETAIL PRICE HEADLINE RATE UNDERLYING RATE HARMONISED AVERAGE HEADLINE RATE
INDEX (% increase on (RPI less mortgage INDEX EARNINGS (3 month average)
(Jan 1987 = year ago) interest) (EU measure) INDEX
100)
June 181.3 2.9 2.8 1.1
May 181.5 3.0 2.9 1.2 **138.3 3.4
Apr 181.2 3.1 3.0 1.5 137.6 3.2
Mar 179.9 3.1 3.0 1.6 *138.4 3.4
Feb 179.3 3.2 3.0 1.6 *137.5 3.1
Jan 178.4 2.9 2.7 1.4 *136.7 3.6
2002 Dec 178.5 2.9 2.7 1.7 *136.1 3.7
Nov 178.2 2.6 2.8 1.6 *136.5 3.8
Oct 177.9 2.1 2.3 1.4 136.1 3.7
Sept 177.6 1.7 2.1 1.0 135.7 3.8
Aug 176.4 1.4 1.9 1.0 *135.2 3.8
July 175.9 1.5 2.0 1.1 134.9 3.9
Source: ONS *revised ** provisional
forecasters are now expecting the
downward trend to continue into the third
INFLATION quarter of the year. The Bank of England
To the surprise of analysts inflation fell again has also warned of wilder swings in the rate
last month and the headline inflation rate of inflation over the next year (FT
(RPI) was 2.9% in the year to June. This is 16/7/2003).
down from 3.0% in May. The „HICP‟
internationally comparable rate likewise fell The IRS Employment Review panel of
by 0.1 point to 1.1% - well below the experts believe that inflation (RPI) will
government‟s likely 2.0% target for it when continue falling until the first quarter of
it becomes the main measure of inflation in 2004 when it will hit 2.5%, and then start to
the autumn. rise again. Their forecast is unchanged and
is for inflation to average 2.9% over 2003,
The RPIX measure of inflation (which and 2.8% for 2004.
excludes mortgage interest payments) also
fell by 0.1 point to 2.8%, remaining ahead of HSBC bank said “Two dominant forces are
the 2.5% government target level. shaping the pattern of inflation. First there
is a big downward impact from the
The largest downward pressure on inflation slowdown in house-price inflation.
was a fall in the cost of foreign holidays, However, this is partly offset by weaker
particularly to European destinations. The sterling, which is pushing inflation up. Next
Office for National Statistics (ONS) also year, we forecast slower inflation as we
noted the downward effect from property, expect more interest rate cuts and a
as house prices rose by less in June than continued slowdown in house price
during the same month the previous year, inflation.”
and reductions in some off-peak charges for
landline phone calls. In contrast the costs The gap between the new HICP inflation
for motor insurance and tax rose sharply, measure (used from this autumn) and the
although the fall in prices for vehicles is existing RPI measure is it‟s widest level in
slowing. 14 months, and concerns have also been
expressed that the crucial housing costs
INFLATION FORECAST (which are excluded from HICP) costs will
be ignored. For more information on the
Inflation has eased with falling oil prices and HICP, see Bargaining Update - June 2003.
a slowdown in house prices rises, and
Bargaining Support Group e-mail: bsg@unison.co.uk
Issue No. 113 July 2003
The release date for the July inflation
figures is Tuesday 12 August 2003. However the narrower „Claimant Count‟
which measures those people claiming
benefits climbed to 952,000, a rise of 4,300
AVERAGE EARNINGS over the last three months but still at a rate
Average earnings growth for the whole of 3.1% as it has been for the last 18
economy recovered from their dip last months.
month and were 3.4% higher in the year to
May. That is 0.2 points higher than in April. The unemployment rate for both men and
women fell by 0.1 percentage point over the
The gap between growth in public and quarter. The rate for women was 4.3 per
private sector earnings closed, with public cent, it‟s lowest ever.
sector earnings rising by 4.9% (down 0.2
points on April) and private sector ones "The ILO numbers are encouraging --
rising by 3.1% (up 0.3 points). unemployment down and record levels of
employment," said Geoff Dicks, chief UK
Earnings in the service sector of the economist at RBS Financial Markets. "It is
economy grew by 3.4% in the three months the same story, the labour market is tight
to May 2003 compared with a year earlier – but it is not generating wage inflation."
0.4 percentage points higher than last
month. Earnings in the manufacturing The release date for the June
sector grew by less than last month, at 3.9% unemployment figures is Wednesday
higher than this time last year. 13 August 2003.
EARNINGS FORECASTS USEFUL WEBSITES
Last month‟s dip in average earnings saw www.unionreps.org.uk
IRS‟s panel of experts lower their The TUC‟s excellent web portal for shop
predictions of average earnings growth. stewards, with discussion and advice by
The consensus is that earnings growth will union reps for union reps.
average 3.9% this year and 4.3% in 2004.
www.neighbourhood.statistics.gov.uk
HSBC bank commented “Employers are The results of the 2001 census broken
under pressure to keep a lid on the upward down into local areas. Detailed information
impact of earnings. To do this there will be about age, employment, ethnic background,
a squeeze on costs as they try to rebuild religion, and other facts.
productivity. The result will be a rise in
unemployment, accompanied by a squeeze www.riniart.org
in wage growth.” A collection of copyright free graphics
mainly of workers and struggles.
The release date for the June average
earnings figures is Wednesday 13
August 2003.
LOW PAY THRESHOLDS 2002/3
Low Pay Unit‟s Hourly £7.41
Low Pay Threshold Weekly £280.00
UNEMPLOYMENT (two-thirds of male Yearly £14,600
Unemployment has fallen to its lowest rate median earnings)
in two years as the public sector continues
to recruit new workers. The new jobs have
almost exclusively been in part-time work, UNISON’S LOW PAY CAMPAIGN
with the numbers of full-time workers UNISON continues to campaign for a
roughly stable. minimum wage figure of half of male median
earnings, with a minimum wage target of £6
The official „ILO‟ measure of unemployment an hour with no lower youth rate.
fell to 5.0% (down 0.1% over the quarter). Half male median earnings are currently
This corresponds to 1,474,000 people of £5.56 an hour / £210 a week / £10,950 a
working age out of work and seeking year.
employment, down 20,000 on the previous
three months and down 50,000 on a year
ago.
Bargaining Support Group e-mail: bsg@unison.co.uk
Issue No. 113 July 2003
HAVE YOU SEEN THIS? Protecting employees from violence
IDS deals with the implications of an
Job evaluation employer‟s duty to protect employees from
violence, aggression and abuse from
IDS examines the role of job evaluation - members of the public or fellow members
design considerations, the evaluation of staff. The article also looks at the range
process itself and the associated of legal actions available to an employee.
development of new pay and grading (IDS Brief 735, June 2003)
arrangements. Equal pay for work of equal
value considerations have had a notable
impact on grading structures in the public Homeworking
sector, resulting in a new wave of job In advance of a detailed IRS survey of policy
evaluation activity. and practice at employer level, IRS provides
(IDS StudyPlus, Summer 2003) an overview of the big issues connected to
homeworking. They analyse the potential
Age discrimination benefits on offer, which range from higher
productivity to reduced accommodation
The Government has unveiled a costs; the issues that employers need to
consultation document on the consider when drawing up a homeworking
implementation of rules on age policy; and the risks attached to
discrimination. The publication of proposals homeworking - such as employee isolation -
is a major step in implementing the age and how they might be overcome. Managers
discrimination rules required by the EC and professional staff are most likely to
Equal Treatment Framework Directive benefit from occasional homeworking,
(No.2000/78). The key proposals contained according to the IRS survey.
in the document include the outlawing of (IRS Employment Review, 779, July 2003)
both direct and indirect discrimination on
the basis of age in employment and
vocational training. It is anticipated that the Partnership
normal definitions of direct and indirect IRS surveyed public and private sector
discrimination will be used. Interestingly, organisations about their approach to
direct discrimination on the basis of a employee relations. The survey sought to
person's perceived age will also be identify the benefits of partnership for
outlawed. The consultation ends on 20 employees and employers on the basis of
October 2003. the experience of 34 surveyed
(IDS Brief.co.uk, 2.7.03) organisations. Although some employers
always try to work in partnership with
Monitoring at work employees - either through trade unions or
other arrangements - many vary their
The Information Commissioner has approach depending on the issue and the
published Part 3 of the Employment business needs of the company.
Practices Data Protection Code on (IRS Employment Review, 779, July 2003)
monitoring at work. The Code is intended
to help employers comply with the Data
Protection Act 1998 and to encourage them
to adopt good practice. The Code of
Practice covers activities which include
recording the activities of workers by
means of CCTV cameras; using automated
checking software to collect information
about workers, for example to find out
whether particular workers are sending or
receiving inappropriate e-mails; keeping
recordings of telephone calls made to or
from a call centre; and videoing workers
outside the workplace to collect evidence
that they are not in fact sick.
(IDS Brief 736, July 2003)
Bargaining Support Group e-mail: bsg@unison.co.uk
Issue No. 113 July 2003
RECENT AGREEMENTS
EMPLOYER STAFF COVERED INCREASE OTHER CHANGES EFFECTIVE
DATE
PRIVATE SECTOR
ASDA (England, Scotland and 126,000 store workers,
3% 4.5% for top rate staff. 3.5% managers. April 1, 2003
Wales) managers and head office staff
C&J CLARK INTERNATIONAL
9,321 staff, 586 managers 2.5% April 1, 2003
(Shoes) (UK)
ROYAL LONDON MUTUAL Merit and market increases worth up to 9% of base
2,500 office staff 3% paybill budget increase April 1, 2003
INSURANCE (UK) salary. 2.7% increase for satisfactory performer.
SCOTTISH AND SOUTHERN 5,000 generation, transmission, 3.55% on all rates and
First stage of a two-year settlement April 1, 2003
ENERGY (UK) distribution and supply staff allowances
SCOTTISH POWER 600 head office and power 2.5% plus up to 5% lump sum Second year of the deal gives the highest RPI from
April 1, 2003
GENERATION (UK) station staff based on location Jan to March 2004.
SIGNET GROUP (UK) 4,500 branch retail staff 10p on hourly rates April 1, 2003
WESTERN POWER
DISTRIBUTION (South west 2,400 staff 4.54% rise in basic salaries. April 1, 2003
England and Wales)
RETAIL CO-OPERATIVE 55,000 fte clerical, pharmacy
3.5% May 5, 2003
SOCIETIES (UK) and retail staff and managers
PUBLIC AND VOLUNTARY SECTOR
DARTFORD BOROUGH
430 staff 5% April 1, 2003
COUNCIL (Kent)
424,000 fte nursing staff,
NHS NURSES & MIDWIVES (UK) 3.225% First year of 3 year deal April 1, 2003
midwives and health visitors
NSPCC (England, Wales,
1,800 staff 3.5% April 1, 2003
Northern Ireland)
OCTAVIA (Housing) (London) 150 staff 3.5% basic rise April 1, 2003
SHAFTESBURY SOCIETY 1,700 administrative,
(London, South East, East Anglia, secretarial and care staff and 3% April 1, 2003
South West, Yorkshire) managers
WALLBROOK HOUSING
ASSOCIATION (East Midlands and 260 staff 3% paybill April 1, 2003
Staffordshire)
WILLIAM SUTTON TRUST
580 staff 2% plus £400 underpinning April 1, 2003
(Housing) (England)
Source: IDS Report 882, 883, 884, 885, (June-July 2003) IRS Employment Review 776, 777, 778, 779 (May – July 2003)
Bargaining Support Group e-mail: bsg@unison.co.uk
