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Pay Bargaining in the Public Sector

UNISON Submission to Finance Committee of the Scottish Parliament

December 2008



UNISON is Scotland’s largest public sector trade union representing 165,000 members across public services. We are the main trade union representing staff in Scotland’s health service, local government and a significant number of Non Departmental Public Bodies (NDPBs). UNISON welcomes this opportunity to detail the problems members are experiencing with the pay policy process.

Local Government

UNISON members in Scotland’s councils narrowly voted to accept a two-year pay deal. The ballot covered members working for Scotland’s 32 local councils, local joint valuation boards and fire and rescue staff. It is UNISON’s view that this was a poor offer, significantly below the present rate of inflation. UNISON and the employers now have the opportunity to look at ways of tackling low pay in local government without the backdrop of a dispute. This should be the start of constructive and meaningful discussions on pay for the future not simply the end of a dispute.

UNISON believes that strike action was made necessary by CoSLA’s lack of freedom to negotiate a suitable pay offer. The Scottish Government’s pay ‘guidelines’ are built into the financial settlement for local authorities as a planning assumption. This means that councils almost always argue that even a pay rise that does no more than maintain the cost of living, comes at the expense of jobs and services. On top of that there is no provision for exceptional costs such as equal pay.

In local government the Scottish Government has indirect control over pay but councils do at least have some freedom to negotiate. However, if the Scottish Government sets unrealistic pay assumptions then councils have limited room to negotiate.

Scottish Water

Scottish Water is included here for the purposes of viewing the complete picture. As a public corporation, they are not an NDPB and their overall budget is influenced by Ministerial Direction and the decisions of the economic regulator.

Despite this financial structure they are covered by the pay ‘guidance’ and that has again caused delays. In the last pay round we reached an agreement with the Corporation only to have a further lengthy delay whilst waiting for Ministerial approval. We came very close to balloting for industrial action against the Minister not Scottish Water using the relevant provisions of the ERA.

In September 2008 Scottish Water breached six years of partnership working with its staff in order to impose a 15 month pay rise of 3% (which equates to an annual offer of 2.4%). In November 2008 UNISON’s Scottish Water Branch members voted by 2-1 in a ballot to take strike action for fair pay along with the other unions. Members took their first day of action on 27th November asking the Scottish Government and Scottish Water to come back to the negotiating table. In this case the Scottish Government has direct control of the offer and has to approve the offer, yet plays no role in the bargaining.

Non Departmental Public Bodies

Staff in Non Departmental Public Bodies (NDPBs) are becoming increasing frustrated at the difficulties caused by the pay guidelines and the way it is administered by ministers through the Public Sector Pay Unit. The anger is caused by endless delays and the rigid interpretation of so called pay ‘guidelines’. Many staff have taken or have been on the verge of industrial action in order to progress negotiations for pay deals and pay restructuring. These conflicts have been running through all negotiations since the 2005 pay deals and are continuing to cause problems in the new round of negotiations which should have been completed and in effect from April this year.

There needs to be immediate action to settle the current pay claims and to reform this system to avoid a repeat of these delays.

Key Issues

  • There are delays in preparing the guidance
  • Pay guidelines are introduced with minimal consultation
  • It takes too long for the Public Sector Pay Unit to respond to NDPB management’s proposals
  • The pay guidelines are too rigid leaving no room for negotiation at a local level. This undermines collective bargaining in each employer and results in these matters ending up at Ministerial level.
  • Lack of recognition and assistance of the short term costs of equal pay
  • Imposing new pay structures which are unfunded.

Impact on Public services

The system used to authorise pay offers in Non Departmental Public Bodies (NDPBs) played an important role in creating the existing disputes and is likely to be the cause of future disputes unless reformed. Currently management put together an offer they feel is affordable. This offer then goes to the Public Sector Pay Unit (PSPU) for approval. The PSPU takes a great deal of time to agree the offer often sending it back to management on more than one occasion looking for more information or rejecting the offer and a demanding a new one. UNISON is not party to this process and neither management nor the PSPU are willing to take responsibility overcoming these delays.

The current process is very bureaucratic, time consuming and the overly rigid interpretation of the pay guidelines means that there is no scope for any local bargaining. The process is full of blockages and delays. Most that pay settlements for 2006 were imposed after almost two years of delays. Staff are frustrated, angry and out of pocket.

The following is a brief overview of the problems in NDPBs

Scottish Children’s Reporter Administration (SCRA )

The dispute over the 2005-7 pay deal was finally resolved in the summer of 2008. Shortly before the next pay rise was due in October. The pay deal was imposed rather than negotiated follow delays and dispute. They key problem is the pay unit’s insistence that the costs of re-grading following job evaluation still had to be under the governments pay guidance limit when these are clearly one off costs.

This year’s attempts at negotiation are also hitting delays. The pay unit subcommittee meets in November and January and as the deadline for the November meeting was missed by management the unit will not look at the remit until January 09. Even if approved by the pay unit and accepted by staff the pay award will be five months late.

Scottish Environmental Protection Agency (SEPA)

The previous pay negotiations at SEPA finally led to dispute ending in the imposition of a pay deal. Staff were sacked and rehired under new contracts at the beginning of this year. This was for a pay deal that should have been in place from April 06. The delay was caused by the time it took management and the pay unit to agree an offer.

The next pay deal was due in April 2008. However, as this was before the new guidelines came into force in May the Pay Unit insist that the claim must be made under the old guidelines. The lack of flexibility to allow management to make an acceptable offer and the ongoing bad feeling from the way the previous claim was settled means that there may be a further dispute.

Scottish Commission for the Regulation of Care: (SCRC)

Again the 2006 pay claim was resolved just before the next round of negotiations was due to start. The pay unit rejecting submissions unless the costs of both the new grading structure and pay rise are within guidelines.

Management have indicated that they submitted their pay remit to the pay unit in October 08. This was due to be implemented in April 08. The benchmarking of comparators is still unresolved. UNISON has no access to the job evaluation scheme used and has been unable to equality proof the scheme. Management are still waiting for a response to their pay remit from the pay unit and until then can make no formal offer to staff. This means that there is a minimum of eight months delay on this year’s pay claim

Loch Lomond and the Trossachs National Park (LLTNPA)

The 2006 process at the national park took 18 months from opening of negotiations linked to new pay and grading system to an offer being made to staff.

This year’s process between the LLTNPA and the pay unit was scheduled to start in April 2008. Since then the pay unit has rejected submission from the management of the LLTNPA on numerous occasions, requiring adjustment on issues not previously notified to the Unions. The Pay Unit issued an instruction stopping any LLTNPA staff receiving their incremental pay increase (due in April 2008). This is contrary to previous custom and practice.

The resulting timescales put considerable pressure on local negotiations and further delay will result if the pay package is not acceptable to UNISON members. The pay unit’s lengthy process continues to work against the concept of local negotiations.

Careers Scotland/Skills Development Scotland

The pay process for careers’ staff was considerably hampered by Scottish Enterprises refusal to participate in any pay process as they felt that this was the responsibility of which ever new body was to take over the staff. This meant that staff had to wait almost two years for anyone to even take responsibility to draw up a pay offer. The Government created Skills Development Scotland (SDS) in April 2008

SDS offered firstly to harmonise pay settlement dates to 1st October annually with subsequent compensation for date changes. In order to facilitate this move SDS offered a single arrangement for this year of a payment made to each person within SDS of £100 for each month that the new pay review date is later than the current review date. Members were balloted and accepted the offer.

There are currently approximately 500 equal pay claims within the previous Careers Scotland lodged at Tribunal. SDS have proposed a formal offer as part of the first stage of a pay equalisation exercise .The formal offer is currently awaiting approval from the Scottish Government Pay Unit. There is also no offer for this years pay claim due last October.

Impact On staff

Staff in NDPBs are becoming increasingly frustrated at the difficulties caused by the processes adopted by ministers and administered by the Public Sector Pay Unit. Staff across the public sector are expressing real anger about the role of the government in public sector pay negotiations. The government cannot state that pay deals are not their business and then insist on rigid ‘guidelines’ for pay deals.

Way ahead

It is essential that action is taking to settle these pay claims as soon as possible and to develop a better system to avoid a repeat in the next pay round. In addition the government’s simplification programme will create a range of new pay problems through the need to harmonise pay and conditions. UNISON suggests the following measures to move past the current problems:

Short term

  • Greater flexibility for each NDPB to reach local agreements within their overall budget without over prescriptive interventions from ministers and the Public Sector Pay Unit
  • Allow NDPBs to utilise savings to address pay and grading issues
  • Some assistance and recognition of the short term costs of meeting equal pay requirements as has been provided for other sectors

Medium term

  • Pay guidance to be broader with general discussion at Ministerial level with the relevant trade unions before they are issued. On this point we welcomed the Cabinet Secretary’s commitment to ensure this happens before future pay guidance is issued.
  • Radically reduce the bureaucracy and delays in the approvals process
  • Leave room for genuine local bargaining or establish a Scottish wide bargaining framework for NDPBs.


In this submission we have highlighted the quite exceptional problems the current processes for dealing with NDPB pay cause for a significant group of our members. Without reform it is inevitable that morale will continue to decline with a consequential impact on the services our members deliver.

What is required is a reform of the process that ensures that meaningful collective bargaining takes place within a coherent framework that respects the agreed pay settlement dates. This should reduce the level of industrial disputes in the sector and improve staff confidence in the competence of management and the Scottish Government.

3 December 2008

For Further information please contact Dave Watson d.watson@unison.co.uk

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