Agenda Item No  4

The Vale of Glamorgan Council

 

Cabinet Meeting - 17th September 2018

 

Report of the Leader

 

New Pay Structure 2019/20

Purpose of the Report

  1. To update Members of the Cabinet on the upcoming 2019/20 pay award implementation plan and to seek approval for a preferred option for that implementation.

Recommendations

  1. That the report and various appendices be noted and considered by Cabinet.
  2. That Option 5 is progressed as the preferred option for consultation, and dependant on the outcomes of that consultation, subsequent implementation.
  3. That the report be referred to Scrutiny Committee (Corporate Performance & Resources) for consideration as part of and alongside formal consultation with the Trade Unions.

Reasons for the Recommendations

  1. To bring matters to the attention and consideration of Cabinet in line with corporate objectives.
  2. To allow progress in relation to the implementation plan and the  implementation of Option 5.
  3. To enable the Scrutiny Committee to consider the implications of the 2019/20 pay award as part of the formal consultation with the Trade Unions.

Background

  1. A two year pay deal has been agreed for staff on NJC Terms & Conditions for 2018/19 and 2019/20.  This will affect approximately 4,000 staff across the Council and Schools.
  2. There were a number of elements that the pay award was trying to address nationally:-
  1. The pay award had two parts to the deal, a straightforward percentage increase for 2018/19 and more complex grade changes for 2019/20.
  2. Responding to pressures of the National Living Wage (NLW).
  3. Need longer term sustainability.
  4. Pairing up of spinal column points and adding new ones.
  5. Putting upward pressure / reducing differentials at the lower end.
  6. Challenging the workability of the current local structure.
  7. Appendix A provides details of the proposed Pay Award (December 2017)
  1. The Council could treat this as a straightforward pay deal and implement from 1st April 2019.  £2.207m has already been allocated for the 2019/20 pay award.    However, moving from the current pay structure to the new structure will cost a minimum of £380k extra, thereby making the total cost around £2.587m. As some grades gain additional headroom, there is likely to be further cost implications from April 2020, however, this is currently difficult to quantify as it depends on staff turnover.
  2. According to the NJC the total increase to the pay bill for 2018/19 and 2019/20 will be 5.6%.
  3. If the Council were to assimilate to the new pay points without making any changes this would result in Grade F becoming a 9 point range and Grade G a 7 point range.
  4. From an Equal Pay perspective this would cause significant risk to the Council, and therefore the pay structure needs to be reviewed.  This is also highlighted in Appendix D (point 11) which states that it is good practice to limit grades to a six point range.
  5. It is noted that the Council removed sp6 and sp7 from the pay structure in December 2017, which has enabled the Council to move closer to the Foundation Living Wage (FLW).  By removing sp6 and sp7, the lowest hourly rate from April 2019 will be £9.18 per hour which is likely to be above the Foundation Living Wage.  The current Living Wage is £8.75 per hour, and the new rate will be notified on 1st November 2018.

The following table details the different hourly rates of pay:-

Current National Living Wage

(age 25+)

Current Foundation Living Wage (outside London)

Vale Council current minimum hourly rate

Vale Council minimum hourly rate from 1st April 2019

£7.83 p/h

Projected £8.20 in April 2019

£8.75 p/h

FLW will be set on 1st Nov 2018

£8.62 p/h

£9.18 p/h

  1. The pay award from 1st April 2018 has been implemented as this was part of straightforward percentage award for each spinal point from sp8 to sp49.
  2. As part of the current administration, as Leader, I have previously made a commitment to move closer to the Foundation Living Wage.  The option for seeking accreditation with the Foundation Living Wage will need to be considered in the future as this will involve contractors having to pay the Foundation Living Wage on any Vale Council projects.

Relevant Issues and Options

  1. Over the last few months a project team has been looking at preliminary options which are detailed as part of this report.  Once an outcome has been identified the project team will be responsible for consultation and reporting to the various Council meetings, and gaining views from the Directorates.
  1. The Project Team includes:-

Laithe Bonni (OM Employee Services) - Project Lead

Carolyn Michael (OM Finance)

Adrian Unsworth (OM Human Resources)

Sarah Jeanes (Payroll Manager)

Andrew Davies (Oracle Systems Admin)

Gareth Pritchard (Business Development Officer)

Mat James (Lifecycle Manager)

  1. Options are summarised as follows.  Further detail including the advantages and disadvantages of each option are set out in Appendix B together with Appendix B1 which details the assimilation spreadsheet for each option.

Option

Summary

2019/20 Current Allocation

Additional costs

1

Straight Assimilation from current grading structure to new structure.  Creates long spinal point ranges

£2.207m

£380k

2

Devise new 12 grade pay structure.  Need to re-evaluate jobs with the potential for  some staff to be negatively impacted in terms of salary.

Not costed due to complexities and risks

-

3

Mixture of spot salaries, non-overlapping grades and overlapping grades (not using sp13) - 3 spinal points in Grade D

£2.207m

£388k

4

Mixture of spot salaries, 2 point Grade D and non-overlapping grades for the higher grades

£2.207m

£401k

5

Mixture of spot salaries, 3 point Grade D and non-overlapping grades for the higher grades

£2.207m

£388k

  1. Based on the above scenarios the incremental progression process used is to increment first under the current pay structure and then assimilate to the new pay points.  This enables a clearer understanding from staff as it is using the current incremental process that staff would be familiar with.    Guidance will be provided as part of the consultation process on how staff will move from their existing grade to the new pay and grading structure.
  2. Appendix C is a copy of the 2018/20 Pay Award agreement with the Trade Unions (10th April 2018)
  3. Appendix D is an additional support document provided by the NJC in agreement with the Trade Unions.  This document provides additional guidance and FAQ's for Council's.  It is pleasing to note that the Vale Council has been following the guidelines before it was issued, and therefore gives confidence that our options have been devised and considered appropriately.
  4. Appendix E shows the most occupied roles in each grade.
  5. Indicative Timescales for Implementation are noted as follows:-

Action

Timescale

Work on options and costing's

May-July 2018 ü

Meet with School Cluster Heads

w/c 2.7.2018 ü

Finalise initial options

4.7.2018 ü

Cost each option

July-Aug 2018 ü

CMT - present proposals

29.8.2018 ü

Project Team to review any further options following CMT

From 29.8.2018ü

Present initial proposals to Trade Unions

4.9.2018ü

Cabinet (seek formal authority for consultation)

Meeting 17.9.2018 (2pm)

Consultation commences

 
  • Scrutiny

20.9.2018 (6pm)

  • Trade Union consultation

20.9.2018

Cabinet Approval

19.11.2018 (2pm)

Full Council for sign off

12.12.2018 (6pm)

Commence Implementation

From 13.12.2018

Implement Pay Award Go Live

01.04.2019

Summary

  1. Members will appreciate the importance of having an equality proofed pay and grading structure for the Council.  The implementation plan together with progression of Option 5 as the preferred option will support the Council in implementing the national pay award.  Further consultation will commence with Scrutiny Committee and with the Trade Unions in order to achieve a collective agreement on the new pay and grading structure to be implemented from 1st April 2019.
  2. Initial discussions have taken place with the Trade Unions who have reviewed all the options, however, as stated above further consultation will commence to ensure agreement is reached as part of a collective agreement.

Resource Implications (Financial and Employment)

  1. Proceeding with the pay award as a straight assimilation (Option 5) will cost £2.595m for 2019/20.  This is made up from the £2.207m already allocated and the additional £388k required to implement the straight assimilation.

Costs for each option are noted in Appendix F.

  1. The final decision on the issue will be taken by Council in December 2018 and subsequently the final costs of the 2019/20 pay award will be taken into consideration as part of the 2019/20 budget setting process.
  2. Appendix B1 is a spreadsheet detailing the assimilation process for each option.

Sustainability and Climate Change Implications

  1. There are no sustainability or climate change implications directly arising from the content of this report.

Legal Implications (to Include Human Rights Implications)

  1. The Council has a legal obligation under the Equalities Act 2010 to ensure that its pay and grading structure is fair and not discriminatory. 
  2. The Council is required to implement the nationally agreed NJC (National Joint Council) pay award for those employees who are engaged on those terms and conditions.  This provides a grading structure that is sustainably above the National Living Wage.
  3. Introducing a new pay and grading structure is a variation to employees Terms and Conditions.  The Council is obliged to consult with its recognised Trade Unions in order to achieve a collective agreement. 
  4. The amendment to the grading structure will enable Equal Pay legislation to be met.

Crime and Disorder Implications

  1. There are no crime and disorder implications directly arising from the content of this report.

Equal Opportunities Implications (to include Welsh Language issues)

  1. Equality Act 2010 - right to equal pay for equal work. 

As options 1, 3, 4 and 5 do not change the grading structure it still provides a suitable equality based grading structure.  Due to the pay increase across the board, it will improve the gender pay gap as the higher percentage increases are towards the lower end of the grading structure, which are predominantly held by females.

  1. As stated above it is likely that the minimum hourly rate will be above the Foundation Living Wage from 1st April 2019. 

Corporate/Service Objectives

  1. The project deliverables will align with the following internal plans, strategies and objectives:

Corporate Plan:-

Making the most of our resources

Engaging with our Employees (through our relationship with our Trade Unions)

Policy Framework and Budget

  1. The current costs are spread across directorates. Indicative costs are as noted in Appendix F. This is an Executive decision at this stage, although the final decision will be reported to Council in December 2018 and the cost of the pay award for 2019/20 will be taken into account as part of the setting of the 2019/20 budget which will be considered by Council on 27th February 2019.

Consultation (including Ward Member Consultation)

  1. Introducing a new pay and grading structure is a variation to employees Terms and Conditions.  As the Council has recognised trade unions, consultation with the trade unions in accordance with the collective bargaining arrangements will be conducted. 

Relevant Scrutiny Committee

  1. Corporate Performance & Resources

Background Papers                                                                  

Appendix A -  NJC Pay Award Proposal (Dec 2017)

Appendix B - Pay Structure Options (Benefits and Risks)

Appendix B1 - Pay Award mapping options spreadsheet

Appendix C - NJC Pay Award Agreement (April 2018)

Appendix D - FAQ document from the NJC (June 2018)

Appendix E - Most occupied roles in each grade

Appendix F - Financial Impact Summary

Contact Officer

Laithe Bonni - Operational Manager Human Resources 01446 709214

Officers Consulted

Corporate Management Team

Responsible Officer

Laithe Bonni - Operational Manager Human Resources 01446 709214