Joint Negotiating Committee for Local Authority Craft and Associated Employees Trade Union side: Unite, GMB, CSEU. Secretary: Jim Kennedy Unite Unite House 128 Theobald s Road Holborn London WC1X 8TN Tel: 020 33712039 Chair: Andy Jones Unite Leeds City Council Unite Office Civic Hall Leeds LS1 1UR Tel: 07891 272763 Joint Negotiating Committee for Local Authority Craft and Associated Employees: Trade Union side pay claim 2018 1
1. Introduction The Red Book Agreement provides an important framework for regulating the pay, terms and conditions of a key section of Local Government workers and TUPE transferred staff. The craft trade unions are unanimous in our defence of the JNC agreement as the national agreement that applies to the unique working environment of craft workers. These workers undertake skilled work, which is both physically demanding and carries a high safety risk, therefore requiring a unique collective negotiating structure. For the agreement to continue to be effective and relevant, however, both remuneration and terms and conditions need to be comparable with other collective industry agreements. If rates of pay continue to lag behind those paid to similarly skilled tradespeople in the private sector, this will undermine Local Government s ability to undertake high quality construction work. Low pay rates affect recruitment and retention, contribute to skills shortages and create problems with staff morale and productivity. Local Government employers have already made a pay offer above the one per cent cap for Green Book workers. Due to the arbitrary public sector pay cap workers covered by the JNC have seen their pay rates fall by around 20% since 2010. This situation cannot continue. The Staff Side Trade Unions are therefore submitting this pay and conditions claim, summarised below: At least a 5% pay rise across all trades; Tool Allowance to double from current rates; Tool Insurance to be paid to a minimum of 2000 with all inventory replaced; The use of PDA s be subject to a minimum national allowance; 35 hour working week; An additional annual leave day; Continued recognition of the JNC (Red Book) agreement and commitments to maintain it for all craft and trade grades. 2. The Local Authorities context Workers in local authorities have borne the brunt of attacks on local government finances from the UK Government s pursuit of austerity and savage cuts to public services. Limited increases since 2014 have resulted in little more than a modicum of relief but it must be remembered these workers are both highly skilled and have had to live with an effective pay cut for much of the decade. It is time for the local government employers to adequately reflect the skills of their staff and agree a substantial rise. This year is pivotal for pay in local authorities. 2
The changing policy landscape is putting our members under immense pressure. They are experiencing an unparalleled deterioration in the value of their basic pay and widespread cuts to their conditions of work and an increase in unpaid leave. These are also being slashed as councils struggle to fund services. However, they form a crucial part of employees overall earnings. Meanwhile, job losses have stripped the sector of its workforce on a historic scale, leading to persistent job insecurity, everincreasing workloads and resulting pressure and stress for those workers left behind to pick up the pieces. The sector is being hit harder than any other part of the public sector. Since June 2010, local government has lost over 750,000 jobs. Those workers left behind face increased workloads, pressure and stress on top of shrinking pay packets. As a result, local services, and those reliant upon them, suffer. Many employees who have been made redundant have been replaced by agency staff a false economy for councils in both the short and long term. Agency workers are expensive and public money is wasted in often high agency fees. Unlike other public sector roles, trades people do have alternative employment opportunities and trade unions are extremely worried that further loss of earnings will create substantial skills shortages in local authorities across the country. It is important that Red Book rates do not fall below the value of their equivalent Green Book rates. The increases proposed by local government employers in their December 2017 offer are above 5 per cent for all spine points that are equivalent to current craft and associated employees LGA proposed increases to equivalent hourly rates to Red Book wages, 2018/19 2017 Red Book annual rate Green Book SCP Proposed Green Book SCP increase (hourly) Building Labourer 15,246 8 9.1% Heating & Ventilation Mate 15,613 10 8.0% Building Craft Operative 15,807 11 7.7% Plumber 16,491 13 5.4% Engineer & Electrician 17,072 15 5.3% 3. Economic context Cost of living Between April 2010 and April 2017, the cost of living, as measured by the Retail Prices Index (RPI), rose by 21.5%. Over 2010 and 2011, RPI inflation centred on the 5% mark, before a decline saw the rate cluster around 3% during most of the three years between 2012 and 2014. Inflation then went into a further slide, with RPI around 1% over most of 2015. 3
However, inflation has been on the rise again since 2016 and RPI inflation has escalated reaching 4% in October 2017. The Government s preferred index of inflation, CPIH, is also far in excess of the JNC rises at 2.8% while CPI has reached 3.0% in October (see table 1 for the most recent year of rises). Yet during the period from 20102017, the majority of our members endured a fouryear pay freeze from 2010, followed by a nonconsolidated payment in December 2014 and then a 2.2% pay rise spread over the next two years and only 1% per year in the most recent pay settlement from 20162017 alongside amendments to the lower grades to take account of the statutory living wage. Since 2009, most JNC workers have seen their pay cut yearonyear. For all these workers this has meant a shocking loss in the value of their pay by more than 20%. Table 2: Price inflation % increase on a year earlier RPI CPIH CPI October 2016 2.0 1.3 0.9 November 2.2 1.5 1.2 December 2.5 1.8 1.6 January 2017 2.6 1.9 1.8 February 3.2 2.3 2.3 March 3.1 2.3 2.3 April 3.5 2.6 2.7 May 3.7 2.7 2.9 June 3.5 2.6 2.6 July 3.6 2.6 2.6 August 3.9 2.7 2.7 September 3.9 2.8 3.0 October 4.0 2.8 3.0 Source: ONS November 2017 Table 3 and 4 show that RPI inflation is forecasts to continue to remain above 3% throughout the winter and 2018. Table 3: RPI Inflation forecasts City economists NWM Rounded CE % GS % H % JPM % SB % SG % % average % August 2017 3.7 3.55 3.6 3.7 3.9 3.91 3.8 3.7 September 3.8 3.48 3.7 3.6 3.9 4.13 3.8 3.8 October 3.9 3.71 3.9 4.0 4.0 4.23 3.9 3.9 November 3.9 3.7 3.8 3.9 4.0 4.04 3.9 3.9 4
December 3.6 3.61 3.7 3.7 3.9 3.94 4.0 3.8 January 2018 3.6 3.63 3.7 3.7 4.0 4.04 3.9 3.8 February 3.4 3.45 3.4 3.3 3.7 3.67 3.7 3.5 March 3.4 3.44 3.4 3.3 3.8 3.59 3.5 3.5 April 3.4 3.47 3.4 3.5 3.7 3.58 3.4 3.5 May 3.3 3.32 3.2 3.5 3.6 3.33 3.3 3.4 June 3.3 3.49 3.4 3.6 3.6 3.40 3.3 3.5 July 3.4 3.3 3.4 3.3 3.5 3.18 3.3 3.3 August 3.3 3.57 3.4 3.1 3.4 3.04 3.2 3.3 September 3.2 3.56 3.2 3.5 3.4 2.80 3.1 3.3 October 3.1 3.57 3.2 3.4 3.4 2.76 3.0 3.2 November 3.2 3.57 3.2 3.4 3.4 2.74 2.9 3.2 December 3.2 3.53 3.2 3.5 3.4 2.68 2.8 3.2 CE Capital Economics; GS Goldman Sachs; H Heteronomics; JPM JP Morgan; LB Lloyds Banking Group; MS Morgan Stanley; SB Scotia Bank; SG Societe Generale Source: IDR Pay Climate, September 2017 Table 4: RPI forecasts Independent forecasters HM Treasury s monthly comparison of independent forecasts reports RPI forecasts as follows Date Published Fourth quarter 2017 Fourth quarter 2018 Median Nov 4.0% 3.1% Beacon Economic Forecasting Nov 4.2% 2.9% CBI Nov 3.6% 3.8% CEBR Nov 3.6% 3.2% Economic Perspectives Nov 3.8% 3.6% Experian Economics Nov 3.6% 3.2% Heteronomics Nov 4.0% 3.1% EY ITEM Club Nov 3.9% 3.0% Oxford Economics Nov 4.0% 2.8% OBR Mar 4.1% 3.4% Source: HM Treasury, Forecasts for the UK Economy, November 2017 Average earnings is also running far higher than public service pay with the latest average weekly earnings growth figures (September), including bonuses, provisionally estimated to be 2.6% against the revised rise for August of 2.4%. The regular pay figures which strip out bonuses have also been running above 2% with the latest whole economy growth figure at 2.2% in September as was the average for the threemonth period ending September. 5
Table 5 below shows how average weekly earnings have grown by broad industrial sector and notably construction earnings have been running significantly higher than the public sector. Table 5: Average weekly earnings broken down by sector (seasonally adjusted) Total Pay (including Regular Pay % Single month 3 month Single 3 month Whole economy 2.6 2.2 2.2 2.2 Private sector 2.8 2.4 2.3 2.3 Public sector 1.6 1.7 1.7 1.7 Public Sector excluding financial 1.6 1.7 1.7 1.7 Services 2.7 2.3 2.2 2.3 Finance and business services 4.3 2.9 2.6 2.7 Manufacturing 1.6 1.8 1.7 1.4 Construction 3.2 2.1 2.8 2.4 Wholesale, retailing, hotels & restaurants 1.9 1.3 1.9 1.4 Source: ONS UK Labour Market Statistical Bulletin, November 2017 The table below is from the Labour Research Department (LRD) Fact Service. It is based on the median average earnings figures published in the Annual Survey of Hours and Earnings (ASHE) for April 2016. The original figures have been uprated by the 1.0% increase in average weekly earnings, including bonuses, for the whole economy between April 2017 and September 2017 to give a rough estimate of earnings now in the various occupational groups. It also shows that Average Weekly Earnings for skilled/craft employers are significantly higher than the rates in the JNC Table 6: Average weekly earnings broken down by occupational groups a week All employees 555.90 All male 597.40 All female 498.50 Managers 832.30 Professionals 740.40 Associate professionals 611.70 Admin & secretarial 435.90 Skilled/craft 514.90 Services 365.00 Sales 314.10 Operatives 477.20 Other manual jobs 373.30 Source: LRD Fact Service, Volume 79 Issue 46, 16 November 2017 6
4. A fair and decent pay rise The punitive public sector pay cap and rapidly rising inflation has had a deep impact on workers standard of living in local authorities. Many workers on Red Book rates have suffered a real terms loss of earning of earnings of 20% on the 2009/10 rates. Cumulatively that means that those workers have missed out in thousands of pounds in their pocket (see Table 7 below). For workers on higher rates pegged to the Red Book the figures would be even higher. Table 7: loss of real term value of pay and cumulative financial loss Actual pay rate 201718 Pay rate if RPI had applied each year since 2010 Real terms loss of value since 200910 % loss Cumulative loss of money since 2009 10* 1 Building Labourer 15,246 16,267 1,021 7% 12,167 2 Heating & Ventilation Mate 15,613 18,339 2,726 17% 17,727 3 Building Craft Operative 15,807 18,497 2,690 17% 17,685 4 Plumber 16,491 19,808 3,317 20% 19,856 5 Engineer & Electrician 17,072 20,447 3,375 20% 20,390 *these figures includes a nonconsolidated payment received in December 2014 Unions are therefore calling for a fair and decent pay rise of at least 5% on all rates to begin to make up the difference. Our proposed rates would be as in Table 8 below: Table 8: Union Pay Claim rates Actual pay rate 201718 Annual pay rate 2017 18 Trade Union side claim of 5% Trade Union side claim of 5% 1 Building Labourer 292.39 15,246 307.01 16,809 2 Heating & Ventilation Mate 299.43 15,613 314.40 17,213 3 Building Craft Operative 303.15 15,807 318.31 17,427 4 Plumber 316.26 16,491 332.07 18,181 5 Engineer & Electrician 327.41 17,072 343.78 18,822 7
5. End Low pay Low pay is also a serious issue for the JNC rates. The Building Labourer and Heating and Ventilation Mate rates have both had to be raised above the overall rise to deal with the rises in the statutory Living Wage rises announced by the Chancellor. Our claim aims to raise pay above the nonstatutory, Foundation Living Wage (often referred to as the Real Living Wage). This rate (currently 8.75 across the UK and 10.20 in London) is calculated to ensure that workers receive the bare minimum needed for an acceptable standard of living. It is hard to understand why our members providing vital services in councils should not be deemed worthy of wages which are enough to live on. In recent years, support for the Foundation Living Wage has grown among local authorities with over 51% of councils individually choosing to pay the Living Wage, even though the Red Book collective agreement does not. Employers who have implemented the Foundation Living Wage report improved retention of staff and improved quality of service. This leads to a reduction in costs of recruitment and training. Better pay also means that workers are more motivated and productive and it helps to reduce absenteeism. With stress, anxiety, poor mental health and fatigue being the number one reason for sickness absence in local government, paying the real Living Wage would help reduce workforce costs and improve the working lives of our members 1. The Foundation Living Wage is not the only measure of low pay. The Joseph Rowntree Foundation publishes its annual Minimum Income Standard (MIS) based on what members of the public think people need to achieve a socially acceptable standard of living. These are shown in Table 9 Table 9: Joseph Rowntree Foundation Minimum Income Standard (MIS) April 2017 Single Adult of working age Two earner couple with two children Lone parent with one child MIS (including rent, childcare and council tax), per week Hourly wage rate (full time) Annual Earnings requirement 296.82 800.17 555.37 9.17 10.42 18.88 17,934 40,762 36,915 Full details: https://www.jrf.org.uk/report/minimumincomestandarduk2017 1 Local Government Workforce Survey 2015/16, Research report, March 2017. 8
Table 10 below shows the difference between the current JNC rates of pay, the Foundation Living Wage and the MIS rates. The joint Union s claim will go some way into closing this gap with the view to catch up with the MIS levels in the medium term. Table 10: Difference between JNC rates and nonstatutory minimum wages floors Weekly pay rates JNC from Apr 2017 Living Wage Foundation UK rate MIS Single Adult of working age MIS Two earner couple with two children MIS Lone parent with one child s % s % s % s % 1 Building Labourer 2 Heating & Ventilation Mate 3 Building Craft Operative 292.39 31.36 11% 299.43 24.32 8% 303.15 20.60 7% 4 Plumber 316.26 7.49 2% 5 Engineer & Electrician 327.41 3.66 1% 4.43 2.61 6.33 19.4 4 30.5 9 2% 1% 2% 6% 9% 507.7 8 500.7 4 497.0 2 483.9 1 472.7 6 174% 167% 164% 153% 144% 262.9 8 255.9 4 252.2 2 239.1 1 227.9 6 90% 85% 83% 76% 70% 6. Comparisons with the wider construction industry The Trade Union side is aware that the key factor in attracting high quality new entrants into the local government building service sector and retaining existing skills is to offer an attractive pay and terms and conditions package. The JNC Agreement rates of pay do not compare at all with those in the construction industry. For example, in the Construction Industry Joint Council (CIJC) the minimum hourly rate for craft workers is currently 11.93 ( 441.41 pwk for 37hr) while in the major electrical and mechanical agreement, the Joint Industry Board (JIB), the minimum rate for an approved electrician is 15.97 per hour ( 590.89 pwk for 37hr), with overtime rates at time and a half and double time. The recently negotiated rate of pay for the plumbing trade sees the basic rate of pay for a plumber/gas fitter increase to 12.93 per hour in January 2018 ( 478.41 pwk for 37hr). Each of these rates place the JNC rates into perspective amounting to between 55% and 65% of the industry craft agreement minimum rates. The rates of pay across the major agreements in the sector have included recent pay rises far in excess of those agreed in the JNC over recent settlements. 9
The CIJC rose by 2.75% in June 2017, and the JPMES rate is set to increase by 8.45% between now and 2020, with the JIB rate rising by 8.25% over the same period. Any analysis of these rates clearly illustrates that the JNC agreement reflects the lowest level of pay for construction tradespersons in the UK. The JNC rates already lag behind the wider industrial rates paid in the sector. This is set to worsen with the already widely known sector skills shortage being influenced by Brexit looming with the very real potential to limit the pool of workers that is available to the wider construction sector. In addition, an increased focus on the housebuilding sector across the UK and the ability of local authorities to be involved in alleviating the housing crisis will further exacerbate the shortage of craftpersons available. If we consider this alongside the historic failure of the construction industry sector to train a sufficient level of apprenticeships (just 21,000 201516) across the whole of the UK, including all areas of the construction and built environment, both public and private, the damaging spectre of recruitment and retention problems for Local Government building departments become easily identifiable. The trade union side demands that employers commit to valuing the very resource that supports the success of the authorities in providing valuable public services. The attraction of workers to enter into the skilled trades in local government will be pressurised further should rates continue to weaken against the growing influence of the construction sector which will be further boosted by investment in major capital projects, and the government placing a real strategic interest in the sector shown by the recent sector deal announcement as part of the UK Industrial Strategy it is vital that this years negotiations see a substantial increase in skilled workers pay to prevent any skills shortage arising, enabling local government to continue to deliver and increase new build housing alongside repairs and maintenance services. The pay rise must take into account the need for parity with workers in similar occupations within the industry and recognise that JNC rates are the lowest in the sector. The Trade Union side is therefore seeking a substantial increase (5%) to all craft workers pay. The increase needs to recognise that the last settlement failed to remedy the years of financial hardship suffered by building workers post financial crisis. The offer should also ensure no widening of the differential between Craft, General Operative and Apprentices. The offer needs to far exceed recent settlements, catch up with other industrial agreements, and recognise that the industrial success of companies depends on attracting high quality workers. Any offer also needs to recognise the financial hardship suffered by Local Government craft workers as a result of the pay freeze and pay restraint over the previous decade referenced earlier in this document. 10
7. Working hours The Trade Union side remains committed to reducing working hours. A shorter working week will improve the health and welfare of employees working in a physically demanding environment. This has benefits for employers too by reducing sickness absence, reducing the number of accidents that occur due to fatigue and therefore improving productivity. The Trade Union side are proposing a reduction of the working week from the current 36 hours in London and 37 hours in the rest of the UK, to 35 hours, without detriment. There has been no change in working hours since 1999 and bringing this group of workers in line with the average working week in the UK of 35 hours, is long overdue. By supporting a reduction in working hours in the JNC agreement employers would be supporting a model of working that promotes a work life balance, comprising the following elements: commitment to improving the organisation of work by each level of management, from supervisor to chief executive, union representatives and all grades of staff; understanding what the concepts of productivity and profitability, job security, job satisfaction and working time mean for management, unions and workforce; trust, which is built by working in partnership to identify and solve problems jointly; representation from all groups of staff who will be affected; involvement, through the widest possible consultation, so that staff have the opportunity to contribute to solutions; listening to aspirations and expectations; considering ideas seriously recognising that every idea, including the ones you don't like, needs to be examined; transparency, by keeping staff fully informed; testing solutions it is usually best to test new practices through a voluntary pilot study during which employees can to revert to existing terms and conditions if they wish; action on possible solutions rather than shelving the issue until it is too late; Instilling confidence in a positive outcome. 8. Holiday entitlement The Trade Union side is seeking an increase of 1 annual leave day to the current holiday entitlement. It is proposed by the trade union side that this be taken to coincide with International Workers Memorial Day on 28th April, or the closest Monday if the 28th falls on a Saturday or Sunday. This would enable local authority craft workers to pay tribute to the many workers across the construction sector that have lost their lives in the course of their daily duties. 11
9. Tool allowance and insurance Due to the increase in the cost of tools and as more craft workers are undertaking bolton skills, they need access to a wider range of tools. The Trade Union side is therefore calling for a significant increase in tool allowance so that it doubles from the current rate and properly reflects the prohibitive cost to building workers to replace tools on a like for like basis when required. Councils must realise that ensuring building workers have the correct tools to complete works supports the efficiency and productivity of the services provided. Trade union members are reporting that both the wage levels currently paid and the allowances for tools is woefully inadequate and means that providing tools is done at the workers expense. All craft workers should be eligible for a fair level of tool allowance and insurance and a consistent rate should be introduced for all including those occupations that are currently excluded, such as roofers and scaffolders. The trade union side is further calling for a tool insurance payment of 2000 with all inventory to be replaced to enable these to be replaced on a like for like basis and support the efficient delivery of services for tenants and customers. 10. Continuation of the Red Book Agreement The Trade Union side believes that maintaining the Red Book remains the only way to effectively guarantee that the vast number of employment matters, specific to local authority craft workers is addressed in a standardised manner within this specific context. Examples are: tool allowances, working at heights, payment for work in discomfort and inconvenience, abnormal working time, extra payments for continuous extra skill or responsibility and provisions for apprentices and young trainees. The existence of a separate national agreement and pay and conditions bargaining arrangement for Craft and Associated Employees is due to the widely accepted view that it is the most efficient way to address the distinct employment conditions of these workers. As a consequence of this distinction, the comparators for Craft and associated employees are similar workers in the private sector construction industry. 12