Contractor Model Pay Claim

CONTRACTORS MODEL PAY CLAIM

Please note: This model pay claim has been written to assist branches who may have to negotiate on pay at a local level with private contractors. This kind of local pay negotiation may well become more common following the Alemo-Herron judgement and recent changes to TUPE regulations.

This pay claim is intended to be subsidiary and complementary to national public sector pay agreements/negotiations/processes (such as Local Government NJC and Agenda for Change).

Using this model pay claim

This model pay claim provides a framework for you to use in pay negotiations with private and community and voluntary sector organisations at a local level. You should feel free to change, add or delete sections as required.

Text in square brackets[like this]is for guidance or for you to add in information which is particular to this claim. Bracketed text will also tell you where to find the information included in the claim and how to update or adapt it. Obviously, these guidance notes are for your use only. Make sure that you delete them from the final version of the claim that you submit to your employer!

While it is always good to have a well researched, professional looking claim, the most important thing is to use pay negotiations as an organising and recruitment opportunity. Make sure that you involve as many of your members as possible in preparing for negotiations. Hold meetings to consult on the content of the claim.Set up a working group toresearch the issues and develop bargaining proposals. Use the issues raised in your negotiations to recruit new members. You will be most effective if your employer knows that the membership is fully involved and solidly behind you as their negotiators.

Advice Notes on Drawing Up a Pay Claim

1. Planning

Plan in advance and consult fully with the members. The starting point should be approximately 3 months in advance of the annual settlement date – also it is a good idea to have an input into the annual budget setting exercise.

2. Information in the Claim

A pay claim should take account of the following:

-Current pay awards in the sector

-Average Earnings figures and forecasts

-Inflation (always focus on RPI, not CPI, partly because it includes housing costs)

-Economic Indicators

-Background information on conditions issues, such as annual leave, travel allowances and family friendly provision

Information you can seek from your Employer

-Last Year’s Pay Award

-Turnover projections

-Impact of restructuring/reorganisation

-Pay bill and Gender Breakdown

-Annual Accounts

-Directors Pay Awards

Accessing information

You can request information directly from the employer, and if you have recognition the employer has a legal duty to provide bargaining information including on pay, conditions of service, staffing levels and financial information. See the ACAS code of practice on

The Information and Consultation of Employees (ICE) Regulations can give workers the right to be informed and consulted about an employers current situation and future plans. You can view a factsheet on the ICE Regulations here:

You can also access further background information about individual companies (such as press stories, registered accounts and contract awards) by emailing UNISON Bargaining Support at

3. Consultation with members

Above all keep the members informed and on board – this strengthens your position. You may want to consider setting up a working group to put forward negotiating proposals. Use the pay consultation as an opportunity to recruit new members.

4. Training

Training on negotiating skills is available via your regional office.

PAY CLAIM FOR [INSERT YEAR]

SUBMITTED BY UNISON TO [NAME OF ORGANISATION]

INTRODUCTION

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

UNISON’s claim seeks to achieve the following:

-A pay rise to help restore and maintain living standards of staff in the face of significant rises in the cost of living.

-Appropriate reward for the hard work our members have put in to provide quality services, boosting the reputation of [Organisation].

-Reward for the increasing levels of stress faced by front line workers arising from [important elements of job, e.g. increasing number of clients, reduced funding per client]

-[If you have decided to ask for a Living Wage, otherwise delete]a settlement which ensures that nobody is paid less than the nationally recognised Living Wage rate.

UNISON is therefore submitting the following claim for [year]which seeks to improve and enhance the morale and productivity of these staff. Meeting our claim will give the [Organisation] the opportunity to demonstrate its commitment to creating a workforce which is well-paid and high in morale and productivity. The claim is straightforward and realistic.

SUMMARY OF CLAIM

We are seeking:

-A[__%] cross the board increase on all salary points and allowances

-[any other additions in payments or conditions]

BACKGROUND TO THE CLAIM

A substantial increase will help restore and maintain living standards of the staff who have seen their pay eroded considerably in recent years

[Where appropriate insert details from consultation – this need only be brief and draw reference if appropriate to the previous years pay offers if they have been low, any changes to working practices that have taken place, also again if appropriate if the settlement of the previous years award was late.]

The greatest asset of the [Organisation] are its employees. Staff are looking to this pay round for evidence of the value which the [Organisation] places upon them.

This claim is both realistic and fair. The following gives full justification for the claim. UNISON hopes that the [management board] will give this claim the full consideration and response which the staff expect and richly deserve.

COMPARATIVE PAY

[Organisation] staff have endured years of comparatively poor pay settlements, as the following data clearly indicates. [Delete if not applicable]

COMPARISON WITH AVERAGE EARNINGS AND INFLATION

*Source: Office of National Statistics,

Between 2006 and 2009 pay in [Organisation] rose by only [__ %],falling behind the rise in average earnings, which grew by [__ %] and inflation which rose by [__ %] This represents a fall in real living standards for [Organisation] employees.

PAY AWARDS

The median of pay settlements in [insert sector]was [__ %] in the year to [insert year]. [Add additional commentary on the need to complete with other employers to avoid issues with recruitment and retention, if you feel this is appropriate]

[Up to date data for this section can be obtained by contacting UNISON Bargaining support at ]

COST OF LIVING INDEX

The Croner Reward Cost of Living Index works out changes in the required income to maintain a given standard of living. The figures for recent years are given in the table below.

INFLATION FORECASTS

[For the most up to date version of these statistics see the document entitled “Economic materials to support pay claims spreadsheet” which can be found here: ] The spreadsheet allows you to demonstrate the fall in value of wages resulting from inflation.

The Treasury average of independent forecasts places RPI inflation in the region of 3% right up until 2017. The medium term forecast put the expected rates at the following levels.

If these rates turn out to be correct, the cost of living employees face will have grown by 16.5% by the close of 2018, as reflected by the graph below showing the cumulative impact of inflation forecasts.

[For the latest update to these figures see the HM Treasury Forecasts for the UK Economy at

]

USING RPI

UNISON believes that the Retail Price Index (RPI) measure of inflation represents the best measure of changes in prices faced by employees, as it includes the housing costs that form a significant part of most employee’s expenditure, data collection is tied more tightly to working households than the Consumer Price Index (CPI) and it is based on a less problematic statistical technique. Therefore, UNISON supports the use of RPI, which remains the most widely used basis for pay negotiations across the public and private sector[1].

AVERAGE EARNINGS

[For the most up to date version of these statistics see the document entitled “Economic materials to support pay claims spreadsheet” which can be found here: ]

The graph below shows trends in average earnings growth over the last two years. Prior toSeptember 2012, private sector average earnings had been growing at or above the rate ofpublic sector earnings for all but two months.

Source: Office of National Statistics, Labour Market Statistics, January 2014

Forecasts of average earnings predict that average earnings growth will rise to 2.2% over 2014 and 2.9% in 2015. For the latest update to these figures see the HM Treasury Forecasts for the UK Economy at

[For the most up to date version of these statistics see the document entitled “Economic materials to support pay claims spreadsheet” which can be found here: ]

RECRUITMENT AND VACANCY RATES

With unemployment running at 2.5m in May 2013, the Chartered Institute of Personnel and Development (CIPD) exposed the scale of competition for vacancies when it reported that 45 applicants were chasing each job that it classified as “low skilled,” there were 29 for every medium skilled position and 10 for every highly skilled job.

The costs to the employer of losing staff were highlighted in the finding that median recruitment cost for filling senior manager / director vacancies stood at £5,000 while other employees cost £2,000 to replace.

The occupations for which organisations are experiencing particular difficulties in recruitment were highlighted in the table below.

The 2013 XpertHR labour turnover report recorded a rise in voluntary resignation rates across the economy to 10.6% in 2012, with private sector services hitting 12.2%, manufacturing and production 7% and the public sector 8.1%. The occupations recording the highest resignation rate were the voluntary sector (13.3%), higher education academic staff (6.7%) and housing sector staff (6.7%). Average turnover rate (which measures the proportion of employees who leave an organisation for any reason – resignation, retirement, dismissal or redundancy) was 17% across the economy in 2012. The breakdown with sectors was 19.1% in private sector services, 12.6% in manufacturing & production and 13.9% in the public sector

MINIMUM WAGE

[For the most up to date version of these statistics see the document entitled “National Minimum Wage Factsheet” which can be found here: ]

The adult minimum wage rate will be increased to £6.50 in October 2014, from

the 2013-14 rate of £6.31.

Currently the lowest pay point in [Organisation]is [£]– just [£] above the minimum wage

For an employer aiming to provide high quality services, this kind of poverty pay is unacceptable. It is even more concerning that this is happening in an area with a higher-than-average cost of living.

12. LIVING WAGE

[For the most up to date version of these statistics see the document entitled “Campaigning, organising and negotiating for a Living Wage - A UNISON Guide” which can be found here: ]

The ‘Living Wage’ is increasingly being used to determine the basic level of income required to avoid poverty and have a ‘low cost but acceptable’ standard of living.

There are two Living Wage rates: one for London and one for the rest of the UK. The London Living Wage is set by GLA Economics, funded through the Mayor of London. The new rate is £8.80 an hour. The national rate is set by the Centre for Social Policy Research based at Loughborough University. The new rate is £7.65 an hour.

It is becoming increasingly seen as unacceptable for employers to pay lower than the Living Wage. The reputation of [Organisation]is at serious risk of long term damage if it continues to operate by paying poverty wages.

[Organisation]should immediately increase the lowest pay rates to a level above the current national and (for London) London Living Wage rates

CONCLUSION

There can be no doubt that all staff working for the [Organisation] have seen their real earnings fall in comparison both with those doing similar jobs elsewhere. To deliver a quality service the [Organisation] will have to rely on staff input and the retention of a specialist, skilled, experienced and dedicated workforce. Competition for that workforce from other sectors is strong.

Despite the difficult financial context of this year’s negotiations, 2010 is the year in which the [Organisation] can begin to make a real difference to the pay of its staff. This is a fair and realistic claim which we ask the [Organisation] to meet in full.

[1] Incomes Date Services, RPI still dominant, November 20134