Following extensive negotiations with PCS, HMRC published its long-anticipated Pay and Contract Reform offer on 1st February.
The offer is time limited. In order for HMRC to be allowed to access the money, they must meet the timescales set out in the 2020 Cabinet Office Pay remit. This means that if the deal is not both accepted and money paid to staff by 31st March 2021, then the offer will be withdrawn and any increase will be constrained by the Cabinet Office cap of 2% for 20/21 and 0% for 21/22.
The offer is a complex package, which offers substantial pay increases across the board, and in line with longstanding PCS policy, is weighted towards the lowest paid. In addition, the offer contains real gains to terms and conditions for all staff, including those on CSEP terms, new recruits and future joiners, however, we recognise that the offer does contain some unwelcome changes for staff recruited or promoted before CSEP terms came into force.
Poverty pay in HMRC has been a concern for many years, with HMRC being forced to give an in – year uplift to all AA staff each April, just to keep up with the legal minimum that HMRC itself has the role of enforcing. This offer increases AA pay by 18% over the life of the deal, moving thousands of staff significantly above the National Minimum Wage.
The lack of meaningful pay progression has been a major concern for HMRC staff for many years. There has also been a widening of the pay gap between staff carrying out work of the same grade within HMRC and this offer addresses some of those pay differentials together with the lack of progression. AO pay would increase to a spot rate of 15% above the current minimum of the pay range, and for other grades, the pay ranges would be shortened, with 70% of staff currently at the minimum rate for the grade being guaranteed progression for the life of the deal, and the maximum of the scales uplifted by at least 7% at the max.
The offer includes an overall increase in the consolidated pay budget of £214 Million, an amount that’s worth more than we’ve seen added to pay bill total, for the whole of a decade of pay restraint. For our members, that gives them an average rise of 13% over three years backdated to June 2020.
The deal takes all existing staff off the minima by 2022, and puts 50% of existing staff up to the max, with 60% less than 2% away. Currently only 21% of staff are paid at the max and 2/3rds are at the minima.
Ending unfair Performance Related Pay
The offer would see an end to the inherently unfair Performance Related Pay system in HMRC, moving a currently ringfenced £10 million pot of money into the main pay pot. Opposition to Performance Related Pay and the use of this money for basic pay increases, has also been a long term objective for PCS.
Annual leave would increase for the majority of staff; the time it takes to reach the maximum leave allowance of 30 days would be reduced from 10 to 5 years’ service.
The current chaos caused by having hundreds of different contract variations currently in operation in HMRC would stop. There would be one set of harmonised terms, ending contracts, such as the hated PN103 and 5/7, which currently allow managers to dictate staff attendance down to the second, and insist on weekend working when there is no clear business need or customer demand.
Flexi time would be made a contractual right for all staff in HMRC, a demand that PCS and predecessor unions have sought for decades. This means a levelling up of the terms of more than 50% of staff, who currently have no control over the shape and length of their working day .
Homeworking would become a guaranteed right for a minimum of 40% of the working week, for staff who are able to carry out their jobs at home and wished to take this offer up. An enhanced industrial relations framework would mean that any business area that wanted to implement any working arrangements that deviated from the harmonised contract, would need to enter into negotiations with the trade union before doing so, as opposed to the current position of chaotic implementation at the whim of individual business area directors.
Limitations of the offer
As with any offer, where there are some substantial gains for members, thereare also clear limits to the deal.
It falls short of our demand for a 10% pay rise over one year, as part of restoring over a decade of pay erosion.
Some longer serving staff will see some unwelcome changes, as HMRC seeks to remove some of the terms it took from new joiners and promotees over the last decade.
Staff who retained the 1.5 (2.5 in Scotland) days privilege leave, will lose these as a result of annual leave being capped at 30 days plus public holidays and the Queen’s Birthday.
Around 2000 staff in London, less than a third of current staff, who still work the pre-CSEP contract of 36 hours a week, would see this increase to the harmonised contractual 37 hours per week.
PCS has secured mitigation through the agreement, which allows staff to offset the effects of these changes. Using the ability to homework for a minimum of 40% of their hours, would allow staff who choose to, to reduce their travel time and costs. In addition, staff can choose to remain on their current hours, by sacrificing 1/37th of their salary.
HMRC has also indicated that it wants to agree a mechanism with PCS, to allow staff to buy additional leave if the deal is accepted. This is not something that PCS has requested and there would clearly need to be controls negotiated to prevent any abuse of it.
It is worth noting here that staff on these legacy contracts that are at the maximum of their pay range will still receive 7.9% in consolidated pay between now and June 2022 with the balance of the 13% rise paid on a non-consolidated basis.
Customer Services Group
Staff who work in Customer Services Group on pre 2003 contracts would be required to work a maximum of 6 Saturday shifts per year and a maximum of 1 shift per week, extended to between 5pm -8pm.
Whilst this would be a change, it does mean that the burden of evening and weekend working would be more fairly distributed amongst staff in these areas, and these shifts could be worked from home.
The terms of the offer make it clear that for some staff, irrespective of contract, their personal circumstances make it unreasonable to carry out these changes.
PCS did seek an opt out but HMRC would not agree to one. In order to mitigate the worst effects, we have sought to get protections for those staff who will be asked to change to these new contractual terms, including the ability to work weekend and evening hours from home.
We are also seeking the extension of the protections in the Management Information System (MIS) agreement to all staff working in customer service roles, irrespective of Line of Business, before current agreements would come to an end in June 2021.
Currently the MIS agreement does not protect all business units in CSG, leaving many exposed to micro management practices.
The offer will reduce the gender pay gap in HMRC to half the Whitehall average and the removal of performance related pay will help to reduce inequality across the board. The Collective Agreement, due to be published to all staff at the start of the ballot,begins with a clear commitment to treating all staff fairly and in accordance with Diversity and Inclusion policy and law.
Any serious Trade Union leadership has to carefully consider the pros and cons of a complex pay offer such as this one, and reach a conclusion based upon all of the elements in the offer – what is gained and what is given up, in order to deliver benefits for the wider membership.
Any judgement on the deal is therefore very finely balanced. The Left Unity led HMRC GEC deliberated long and hard in reaching the decision that overall, the offer is more progressive than it is detrimental, as it lays down huge improvements in both pay and working conditions for a large majority of staff.
In considering the offer, the Left Unity led GEC has had to weigh up whether the improvements gained are sufficient to counter the unwelcome elements of the offer for some members.
Rejecting the offer would run the risk of sacrificing an offer that would provide vast improvements to thousands of members living in poverty and working under draconian conditions.
In the context of the current pandemic, the ongoing pay freeze and the likelihood that many new working patterns will emerge in a post COVID-19 world, this would be widely recognised as a deal which secures substantial gains for many members, particularly the lowest paid and those who have suffered inferior terms and conditions since 2014.
In addition, the offer preserves access to the radical redundancy avoidance measures secured during the pandemic, guaranteeing the right to choose to work permanently from home, as an alternative to redundancy. This gives staff involved in future closures, access to the measures that saved around 500 jobs during 2020.
Where changes in further working arrangements are proposed, it is much better to have these bolted down into collective agreements with Trade Unions, than driven through by rogue managements on a piecemeal basis in different Business streams. This is hardwired into this offer.
Thousands joining PCS
Thousands of new members are joining PCS in HMRC, as they can see the positive difference the Union can make to them in their working lives. More members have joined us in the week since the offer was published than in the whole of 2020, with over 3000 new joiners in the first 6 weeks of 2021.
There have been calls from the political opponents of Left Unity to simply reject the deal, but these calls have not been backed up with any calls or plans to build any kind of campaign , let alone the type of industrial campaign that would be needed for HMRC to break the Tory pay cap.
Simply rejecting the offer, without a credible plan to deliver real improvements is irresponsible.
Some have also argued that the Group Executive Committee should make no recommendation at all to members. This would be an abdication of leadership, which sometimes involves making difficult decisions, and would not be easily understood by members who would be looking to their Group leadership to explain aspects of the deal to them and offer a view of its merits.
In the context of a public sector pay freeze, this offer provides above inflation pay increases, lifts thousands of members above the minimum wage, ends the unfair performance related pay system in HMRC and provides significant improvements to the terms and conditions of thousands of staff who are on detrimental contracts.
For these reasons, the Left Unity National Committee fully supports HMRC Group negotiators and the Group Executive Committee decision to recommend a YES vote in the ballot that opens on the 8th February.