PROTECT MGMT MRC Redundancy Compensation Proposal V0.6 July 2011

Transcription

1 PROTECT MGMT MRC Redundancy Cmpensatin Prpsal V0.6 July 2011 Issued: July 2011 Page 1 f 10

2 1. Backgrund / Current Psitin The purpse f this dcument is t summarise the utcme f the negtiatins undertaken as part f the cnsultatin prcess between MRC Management and TUS fr changing the MRC s redundancy terms. In December 2010 the MRC received a cmmunicatin frm the Department fr Business, Innvatin & Science (BIS) stipulating that they expected the MRC t align its Cmpensatin Scheme with the new Civil Service Cmpensatin Scheme. The MRC Cmpensatin Scheme is deemed t be cntractual and MRC Management and Natinal Trade Unin Side are hping t agree, under the terms f ur Cllective arrangements, n any necessary changes t these terms. As part f these arrangements, MRC and TUS have been frmally cnsulting fr a perid n less than 90 days. We advised in February that we wuld keep staff updated n the prgress f frmal cnsultatin between MRC and TUS. We have nw thrugh using the Staff Bulletin as a means f cmmunicating, cnfirmed that the frmal perid f cnsultatin has nw been cncluded. Fur f the five recgnised Trade Unins will ballt their members shrtly, recmmending the changes given the cncessins being made. PCS will nt be entering int this prcess as they are awaiting the utcme f a natinal psitin t be taken against the Cabinet Office changes t the Civil Service Cmpensatin Scheme. 2. Prpsed changes t the MRC s redundancy cmpensatin scheme There will be tw main rutes and revised terms fr cmpensatin payments available fr redundancy exits if agreement is reached fr changing MRC s redundancy terms. These are: Vluntary Redundancy Cmpulsry Redundancy Vluntary Exit is anther rute available and bradly fllws the terms n ffer under Vluntary Redundancy but is subject t Cabinet Office apprval. Wrked examples f the revised financial terms n ffer can be fund at Annex A. 2.1 Prpsed New Terms Vluntary Redundancy Vluntary Redundancy schemes will nly exist nce the risk f there being Cmpulsry Redundancies has crystallised. The scheme must be ffered t all staff at risk f redundancy under that cnsultatin. Such a scheme will nt require Cabinet Office apprval. The standard tariff will be set t ne mnth s pay per year f service nly. The MRC will cntinue t recgnise a ne year qualifying perid. Ntice perid will be set at 3 mnths. Cap fr thse belw pensin age 1 will be set at 21 mnths pay (21 mnths cap + 3 mnths ntice = 2 years pay as a maximum). Cap fr thse abve pensin age will be set at six mnths pay. Lwer paid prtectin (thse earning belw 23,000) will be permitted. Issued: July 2011 Page 2 f 10

3 Higher paid cap (thse earning abve 149,820) will be set. Early access t an unreduced pensin 2 will be permitted fr thse at age 50/55 wh are members eligible fr these benefits prvided by the MRC pensin scheme. 2.2 Prpsed New Terms - Cmpulsry Redundancy Under the new terms, Cmpulsry Redundancy will nly be used when all vluntary rutes have been exhausted. The tariff will be set at ne mnth s pay per year f service. A 2 year qualifying perid will be set (this aligns with the qualifying perid set fr Statutry Redundancy cmpensatin). Althugh the Civil Service Cmpensatin Scheme indicates 3 mnths, current cntractual ntice fr Cmpulsry Redundancy will remain at six mnths fr MRC staff. Cap fr thse belw pensin age 1 will be set at a maximum f 12 mnths pay. Cap fr thse abve pensin age will be set at a maximum f six mnths pay. Lwer paid prtectin (thse earning belw 23,000) will be permitted. Higher paid cap (thse earning abve 149,820) will be set. Early access t an unreduced pensin 2 cannt be permitted. A year s annual leave entitlement wuld be paid t thse leaving n cmpulsry terms. 1 Subject t any tapering 2 Pensins are usually reduced if they are taken befre nrmal pensin age t reflect the fact that they are paid fr lnger. Early access t an unreduced pensin is permitted n vluntary redundancy subject t surrender f sme r all f the lump sum cmpensatin payment. Where the surrender f all the lump sum cmpensatin payment des nt meet the required level fr access t an unreduced pensin, the MRC will make up the shrtfall. As previusly mentined, MRC may have the ability under certain circumstances t use a Vluntary Exit rute, hwever this wuld be subject t Cabinet Office apprval. This rute is designed fr large-scale redundancy prgrammes where calls fr vlunteers wuld be rganisatinwide. The nly term which may differ t that f the Vluntary Redundancy is the flexibility t increase the standard tariff f at least ne mnth s pay per year f service t a maximum f 2 mnth s pay per year f service, hwever the justificatin wuld need t be prvided and this wuld be subject t Cabinet Office apprval. 3. Overview f the principles f the new Resettlement / Ntice arrangements 3.1 Ntice and resettlement MRC have agreed that if the new terms are agreed under ur cllective arrangements, then the Redundancy and Resettlement Plicy will be updated and agreed with TUS quickly. Under MRC s plicy ahead f any agreement fr revised terms, allws fr six mnths f resettlement perid is prvided ahead f ntice (als at six mnths) being issued. Under the prpsed new redundancy cmpensatin terms, the fllwing arrangements will be adpted: a) Vluntary Redundancies (inc. Vluntary Exits) Issued: July 2011 Page 3 f 10

4 vluntary rutes ffer the prvisin t identify thse individuals/grups at risk at a very early stage. Prir t frmal ntice being given there will be a perid f resettlement where redeplyment ptins can be cnsidered, i.e. current vacancies, establishing redundancy pls r calling fr vlunteers. The perid f resettlement wuld nt exceed six mnths unless there is a genuine business requirement. The perid f ntice then prvided t at risk individuals wuld be 3 mnths. b) Cmpulsry Redundancy The MRC will nt mve t a psitin f cnfirming Cmpulsry Redundancy until the Vluntary Redundancy rutes have been exhausted. Mving t a psitin f Cmpulsry Redundancy will be clearly cmmunicated t the individual at risk. If all vluntary rutes have been exhausted and frmal ntice is t be issued fr Cmpulsry Redundancy, the perid f resettlement shuld nt exceed six mnths frm the pint the individual was placed at risk Only nce the resettlement perid has been cncluded will ntice be given. MRC s cntractual perid fr ntice under cmpulsry terms will remain six mnths*. A flw diagram f hw the revised cnsultatin, resettlement and ntice perids will wrk in practice can be fund at Annex B. 4. MRC / TUS Negtiated psitin in supprt f New Redundancy Terms The fllwing areas have frmed part f the negtiatins between MRC Management and TUS. We have reached a psitin f these cncessins being agreed IF acceptance is reached and the revised redundancy terms intrduced fr the MRC. 4.1 Redundancy Avidance Measures The MRC will ensure redundancy avidance measures, utlined in the guideline set by Cabinet ffice where apprpriate, are exhausted fr thse placed at risk by implementing the fllwing redeplyment measures: Expertise will be made available t facilitate and advise n discussins with thse individuals at risk. TUS and Management side agree that this prvisin be managed initially by the MRC with the intent f cnsidering the medium r lng term ptin f SSC prviding a service. Psitins are practively identified t ensure thse at risk are given pririty in recruitment t aid successful resettlement. TUS and Management side have cnsidered and the agreement is that this be prvided by MRC initially. Management side t cnsider the prcess and impact n hw vacancies r pprtunities are currently shared. Cnsidering redeplyment fr thse at risk will be mandatry fr recruiting managers and HR staff. Current redeplyment guidance will be updated t reflect new arrangements. Cmmunicatin n supprt and arrangements fr redeplyment will be cmmunicated with staff. Explit any pprtunities available within the current HRIS (Oracle). There is prvisin available fr Oracle t prvide a flag when smene is placed at risk. This will help identify thse applying fr vacancies where pririty treatment will be applied fr redeplyment purpses. Issued: July 2011 Page 4 f 10

5 4.2 Transferred-in service Fr staff that jined the MRC prir t 1 January 2004 and transferred benefits int the MRC pensin scheme befre 31 July 2005, this service will cntinue t cunt twards recknable service fr redundancy cmpensatin. This is a current cmmitment and MRC management have agreed that this be a cncessin in supprt f the new terms being agreed. 4.3 Redundancy payments fr Career Develpment Fellws At present, these psitins are cnsidered training rles and at the end f the Fixed Term Appintment, the MRC use the sme ther substantial reasn fr a fair exit. It has nw been agreed by MRC management that at the end f these fixed term cntracts, individuals may be eligible fr redundancy cmpensatin*. *This brings CDFs in line with hw ther FTCs are treated and as such arrangements fr issuing ntice and ntice perids, as detailed in MRC s redundancy and resettlement plicy, will apply. 4.4 Ntice perids fr Cmpulsry Redundancy Cabinet ffice arrangements are such as the Civil Service Cmpensatin Scheme nly ffers 3 mnth ntice fr Cmpulsry Redundancies. The MRC have agreed with TUS that its current prvisin f six mnths ntice under Cmpulsry terms will remain. 5. Next Steps MRC Management Bard are supprtive f the apprach being taken and have agreed t the cncessins if agreement is reached n the new redundancy cmpensatin terms. Fur f the five recgnised Unins will ballt their members and be recmmending that with the cncessins reached, members accept the revised terms n ffer. This prpsal dcument can be used by bth MRC management and TUS in cmmunicating with their interested parties and ballt prcess. Issued: July 2011 Page 5 f 10

6 Annex A Wrked Examples f Redundancy Terms Bb and Jane wrk full time, are bth 35, have accumulated 15 years service and are bth paid 20,650. Lcal management at the MRC annunce that a Management Initiated Review (MIR) will take place with the intentin f restructuring the administratin ffice. Frmal cnsultatin begins n the pssibility f Cmpulsry Redundancy. The MRC therefre makes a call fr vlunteers, making it clear t the emplyees that they are at risk f Cmpulsry Redundancy. All emplyees are prvided with relevant MIR infrmatin and timelines. Redeplyment is cnsidered frm infrmatin gathered by the individual at risk and vacancy infrmatin which prves unsuccessful. Jane vlunteers and is accepted. She receives 15 mnths f salary (at ne mnth per year) tgether with three mnths ntice. As her salary is belw 23,000, the actual payment is based n 15 mnths f 23,000 (therefre a payment f 28,750 tax free) plus a further three mnths ntice at her salary f 20, 650 (subject t usual deductins). Bb was tld his jb was at risk but chse nt t vlunteer. Redeplyment is unsuccessful and he is then made cmpulsry redundant. He receives 12 mnths salary (the maximum under cmpulsry dismissal) tgether with six mnths ntice. As his salary is belw 23,000, the actual payment is based n 12 mnths f 23,000 (therefre a payment f 23,000) plus six mnths ntice at his salary f 20,650. As Bb is leaving n cmpulsry terms, he will als receive payment fr 30 days annual leave. As a result f a decisin arising frm a quinquennial review, a scientific prgramme will n lnger be funded. Simn earns 200,000 and has 5 years service. The MRC is still bliged t ffer vluntary terms befre cmpulsry, but Simn des nt apply fr vluntary terms and is dismissed as cmpulsry redundant. Simn s pay is restricted t the deemed maximum f 149,820. Simn s redundancy payment is calculated as 5 x 149,820 / 12 = 62,425. He is als entitled t six mnths ntice and payment f 30 days annual leave. Kirsty is aged 56 and is a member f the MRC pensin scheme. She has 21 years service and a pensinable salary f 30,000. The MRC has annunced redundancies and is inviting vlunteers. As Kirsty is ver her minimum pensin age, she can chse t receive a pensin (and lump sum) that she has earned immediately withut reductin even if this csts mre than the lump sum cmpensatin payment she wuld have received. But Kirsty des nt have t take an immediate pensin. She can take a lump sum cmpensatin payment under the terms f the Vluntary Redundancy scheme f 21 x 30,000 / 12 = 52,500 (f which 30,000 wuld be tax free) and leave her pensin (and assciated retirement lump sum) preserved fr payment at nrmal pensin age. Whichever ptin she chses, Kirsty will als receive 3 mnths ntice. Issued: July 2011 Page 6 f 10

7 Annex B MRC Redundancy Prcess - Flw Diagram Review utcme and recmmendatins indicates the ptential fr redundancy Pre-redundancy measures Management planning Directr, reginal/unit HRBP, RPG attend initial meeting t cnsider ptential alternatives t redundancy, prcess fr cnsultatin, rles and respnsibilities f each party, and timeline f events. Where relevant, redundancy pl(s) identified. Ntificatin that redundancy measures are being cntemplated Directr (r nminee) prvides frmal ntificatin t LTUS in writing f reasns fr pssible redundancy, alternative ptins cnsidered, prcess and timescales fr redundancy. Cpy f frmal ntificatin als frwarded t Crprate HR. Cllective cnsultatin with TUS LTUS/NTUS invited t suggest alternatives t redundancy, cmment n selectin methds/criteria, etc. Cnsultatin and Redeplyment Perid (maximum f 6 mnths) Staff cnsultatin Cllective & Individual meetings (1 st meeting) Part 1 - Reginal/unit HR, tgether with apprpriate manager, will meet with affected staff t prvide the business ratinale fr: the prpsed redundancies; prcess which is t be fllwed; pprtunity t suggest alternatives; etc. At this meeting staff will be placed at risk Part 2 - Immediately fllwing this meeting, reginal/unit HR will meet individually with thse staff affected t explain redeplyment prcess, t identify skills prfile, and supprt prvided by MRC. Reginal/Unit HR will identify thrugh redeplyment arrangements any ptential jb matches frm MRC vacancies Reginal/Unit HR t instigate call fr vlunteers prcess Individual cnsultatin (2 nd meeting) Reginal/unit HR meet with emplyees wh have vlunteered fr redundancy t cnfirm vluntary terms and cmpensatin entitlements If an individual at risk is unwilling t accept Vluntary terms, and Redundancy Avidance Measures have prved unsuccessful t date, Cmpulsry Redundancy will be cnfirmed and ntice issued. Ntice Perids* (3 mnths Vluntary Redundancy) (6 mnths Cmpulsry Redundancy) Written ntice f redundancy and terminatin f emplyment issued t emplyee. HR1 frm submitted t BIS if it is prpsed t dismiss as redundant 20 r mre emplyees frm ne establishment within a perid f 90 days r less. Redeplyment measures cntinue (Penna nrmally engaged) Emplyee entitled t appeal against decisin t terminate emplyment n grunds f redundancy Emplyee dismissed by reasn f redundancy (unless appeal submitted and upheld) Issued: July 2011 Page 7 f 10

8 PROTECT MGMT New redundancy cmpensatin prpsal Questins & Answers Annex C Why d we have t have a new cmpensatin scheme? In December 2010 the MRC received a cmmunicatin frm the Department fr Business, Innvatin & Science (BIS) stipulating that they expected the MRC t align its Cmpensatin Scheme with the new Civil Service Cmpensatin Scheme. Since February, under its Cllective Agreement, the MRC have been cnsulting with its five recgnised Trade Unins t wrk twards agreeing new terms. Althugh the requirement is fr MRC t align with the new Civil Service Cmpensatin Scheme and nt t exceed the standard tariff, MRC Management have agreed a number f cncessins t be implemented if the new arrangements are t be adpted. Hw is the prpsed new scheme different that MRC s current terms? There are a number f key differences in apprach and terms frm current MRC redundancy arrangements. In summary, these are: Vluntary Redundancy: Belw nrmal pensin age ne mnth s pay per year f service up t 21 mnths. All staff will be given three mnths ntice. Abve nrmal pensin age ne mnth s pay per year f service up t a maximum f six mnths. Staff wh have reached minimum pensin age can chse t pt fr early retirement n their current pensin entitlement. Staff will be asked t surrender sme (r all) f their lump sum cmpensatin payment t meet the cst f receiving this pensin early. Pay threshlds have been set: All staff earning less than 23,000 (n FTE basis) will be treated as if they earn 23,000 fr the purpse f calculating their redundancy payments. There will als be an upper pay threshld f 149,820. Staff will have their salary capped at this figure fr the purpse f calculating their redundancy payments. Cmpulsry Redundancy: One mnth s pay per year f service up t 12 mnths. All staff wh may face Cmpulsry Redundancy will first have had the pprtunity t exit under vluntary terms. Fr further infrmatin, refer t Sectin 2 and 3 f this paper. Can the cmpensatin tariff be varied? The MRC cannt ffer mre than 21 mnths pay fr Vluntary Redundancies and 12 mnths pay fr Cmpulsry Redundancies. The nly variance n this will be where the MRC wish t run a Vluntary Exit scheme befre cmmencing frmal cnsultatin n Cmpulsry Redundancy, we may have sme discretin ver the terms n ffer. Hwever, this wuld be subject t Cabinet Office apprval befre any cnsultatin begins. Under the prpsed new arrangements, can MRC g straight t Cmpulsry Redundancies if timings require? Issued: July 2011 Page 8 f 10

9 PROTECT MGMT New redundancy cmpensatin prpsal The MRC cannt g straight t Cmpulsry Redundancies. The MRC wuld need t cmmence frmal cnsultatin with the Trade Unins befre identifying thse at risk f redundancy. The MRC will need t ffer staff an pprtunity t exit under the Vluntary Redundancy terms making clear t individuals that they are at risk f Cmpulsry Redundancy. D individuals wh applied fr Vluntary Redundancy terms preserve a right t these if later selected fr Cmpulsry Redundancy? Staff wh applied fr, but were nt chsen, fr departure under Vluntary Redundancy terms will be ffered the pprtunity t exit under Vluntary Redundancy terms if they are later selected fr Cmpulsry Redundancy as part f the same exercise. The right t the Vluntary Redundancy terms nly applies fr the exercise in which the individual vlunteered. If there is a further rund f redundancies the persn will need t apply again t be able t leave under the Vluntary Redundancy terms. The underlying bjective is t maximise the use f vluntary releases and minimise the use f Cmpulsry Redundancy. Will there be any restrictin n payments t staff wh are clse t their nrmal pensin age? There will be a degree f tapering f the award s that thse wh are particularly clse t pensin age are nt advantaged ver thse wh have reached pensin age. Therefre the cap n the number f mnths pay can nt be any larger than the time t nrmal pensin age (runded t the nearest whle mnth) plus six mnths. Therefre smene with a pensin age f 60 leaving under Vluntary Redundancy at age 59 years and 3 mnths will be able t receive a maximum payment f 15 mnths pay (9 mnths fr the time remaining until 60, plus the six mnths maximum that culd be paid t thse past pensin age). Wuld I need t repay my lump sum cmpensatin payment if MRC were t reemply me? There are rules cncerning re-emplyment and it is recmmended that yu check hw the rules apply t yur particular circumstances befre accepting a new jb with the MRC. Hw wuld the terms apply t part-timers? The calculatin will be based n the full time equivalent rate f pay and pr-rata service. Fr example, wrking fr 2.5 days per week fr fur years will cunt as tw years f service. In additin there are limits t the maximum benefits that part-time wrkers can receive s that they d nt receive disprprtinately mre than full-time wrkers. What happens t my pensin lump sum if I pt fr early retirement under Vluntary Redundancy terms? Is it surrendered t meet the cst f taking the pensin early? If yu leave n Vluntary Redundancy and pt fr early retirement n an unreduced pensin yu will be asked t surrender sme (r all) f any lump sum cmpensatin payment t meet the cst f receiving yur pensin early. Only the lump sum cmpensatin payment is surrendered t meet the cst f taking the pensin early. Hw much lump sum cmpensatin payment is likely t be required t meet the cst f taking the pensin early under the Vluntary Redundancy terms? Issued: July 2011 Page 9 f 10

10 PROTECT MGMT New redundancy cmpensatin prpsal The cst f taking the pensin early depends n age and length f service. The further frm nrmal pensin age the higher the cst is. The mre service in the scheme the higher the cst. Why are vluntary terms mre generus than cmpulsry terms? The Gvernment believes that this apprach will allw departments t run rderly departure exercises. Hwever, n individual will depart n cmpulsry terms withut being ffered the ptin t take vluntary terms. A principle aim will be t minimise the number f departures n cmpulsry terms. Is it pssible that my applicatin fr vluntary terms culd be rejected and I culd then be selected fr redundancy and frced t leave n cmpulsry terms? N. What are the ntice prvisins? Departures n vluntary terms will be subject t 3 mnths ntice. Subject t mutual agreement between the emplyee and the emplyer this may be paid in lieu f wrking the ntice perid. Departures n cmpulsry terms will be subject t six mnths ntice*. Issued: July 2011 Page 10 f 10