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LRD.uk 78 Blackfriars Road London SE1 8HF

Lifting the lid on current trends in the UK Bargaining data developed in the UK context Employment : private sector 26.6 million, public sector 5.5 million (17%) Union density : 23.5% (private sector 13.4%, public sector 52.7%)

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LRD.uk 78 Blackfriars Road London SE1 8HF

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  1. Lifting the lid on current trends in the UK Bargaining data developed in the UK context • Employment: private sector 26.6 million, public sector 5.5 million (17%) • Union density: 23.5% (private sector 13.4%, public sector 52.7%) • Collective bargaining: 26.3% (private sector 14.9%, public sector 59.0%) • Union presence: 41.1% (private sector 26.7%, public sector 83.0%) • Collective bargaining: decentralised, low profile (except disputes/public sector) • Multi-employer CBAs: private sector <1 million?; public sector more centralised • Key role of regulation: e.g. minimum wage, equal pay - now gender pay gap Limits of public data sources Average weekly earnings (growth) Annual Survey of Hours & Earnings Labour Force Survey Bank of England Reliance on private data sources HR services, recruitment & job agencies Publishers (eg XpertHR, LRD, IDR) Employers’ associations & sector media Unions’ own data www.LRD.org.uk 78 Blackfriars Road London SE1 8HF 1

  2. What is the LRD PayLine database? • Mainly trade union-based database, resourced by union subscription (includes Unite, Unison, GMB, Usdaw, PCS, RMT, TSSA, Community and other trade unions) • Data sourced through trade unions at all levels, very limited employer input, public reports and media coverage, Freedom of Information Act (public sector), Pay Review Bodies (public sector) • Data output (not usually full-text) on-line access (by password), monthly Workplace Report magazine, annual Pay Survey, LRD research projects, enquiries • Varied data on over 2,300 bargaining units large & small, strongest in transport & communications, manufacturing, public admin, media/computing, commerce • Latest data: 898 recorded pay settlements effective in 2017 (9% in commerce including 36 retail & wholesale deals plus 42 retail-related transport deals) www.LRD.org.uk 78 Blackfriars Road London SE1 8HF 2

  3. What can LRD PayLine help to deliver? Used in different ways to “lift the lid” (transparency & balance) • Pay trends – what are the chances of a pay recovery in 2018, low pay bargaining, long-term deals, inflation links, pay levels, regional pay (e.g. NI, London), sector trends (e.g. civil service, engineering, education, justice, health, food) • Other bargaining outcomes - pay additions, bonus & incentive pay, working time changes, workplace pensions • Equality issues - gender pay gap, age-related pay, “family-friendly” policies • Management issues – performance & pay structures • One-off surveys & Workplace Report features: e.g. voice at work, shift patterns • Responding to enquiries – e.g shift work, pay benchmarking; pay claims; pay frequency; redundancy pay; pension scheme closures; role of long-term deals www.LRD.org.uk 78 Blackfriars Road London SE1 8HF 3

  4. Pay trends since the Great Recession • No pay recovery yet……. • pre-recession 2006-07 3.6%, 2007-08 3.9% • low point 2.0% in 2009-10 • short-lived recovery 2.75% in 2010-11 • 2.5% for 3 years • 2.0% for 3 years • January 2018 2.75% • Future 2018 3.0%??? www.LRD.org.uk 78 Blackfriars Road London SE1 8HF 4

  5. Pay trends in 2017 by sector Median results Lowest basic increase All 2.3% Private sector 2.39% Public sector 1.32% Standard increase All 2.1% Private sector 2.2% Public sector 1.0% Above-trend Accommodation & food 3.0% Transport etc 2.5%* Wholesale/retail 2.5% Admin & support 2.5% Arts & entertainment 2.42% Manufacturing 2.39% Finance 2.31% * Retail-related transport 2.2% Below-trend Electricity & Gas 2.29% Construction 2.25% Water 2.0% Mining etc 2.0% Real estate 2.0% Agriculture 1.75% Education 1.75% Publish/computing 1.5% Other services 1.5% Health etc 1.5% Public admin 1.15% Professional & scientific 1.0% www.LRD.org.uk 78 Blackfriars Road London SE1 8HF 5

  6. www.LRD.org.uk 78 Blackfriars Road London SE1 8HF 6

  7. Bargaining on low pay issues in 2017 17% of deals included measures to boost lower-paid workers • Statutory: Increases in the statutory National Living Wage/National Minimum Wage affected almost 4% of deals • Voluntary Living Wage: played a role in almost 8% of these (mainly) union-negotiated deals (including its promotion in the Scotland government’s pay policy) • Other low pay-boosting measures: adopted by negotiators, affected 6% of deals Examples: • Express Gifts (Findel Group): Grade 2 removed with staff upgraded to Grade 3, equating to a 3.6% increase for the lowest paid. • Environment Agency: 1% increase to minimums and maximums of Staff Grades 1-7 with the exception of the Grade 1 minimum increasing by 3.45% • G4S (RBS): Living Wage Foundation Living Wage (£8.45ph) from 1 October 2017. Differentials for Team Leaders and Supervisors maintained at 6.25% www.LRD.org.uk 78 Blackfriars Road London SE1 8HF 7

  8. Long-term deals & inflation links in 2017 34% of deals “long-term” (around 2 years or more) Pay rises under existing long-term deals • no inflation link 16.9% of pay rises, median 2.2% (standard median 2.0%) • inflation link 6.9% of pay rises, median 2.8% (standard median 2.6%) Pay rises under new long-term deals • no inflation link: 9.0%, median 2.6% (standard median 2.5%) • inflation link: 1.3%, median 2.5% (standard median 2.4%) Short-term or one-year: 65.9% of deals, median 2.1% (standard median 2.0%) Pay rises explicitly linked to inflation 8% of deals, 6% linked to RPI • Mainly long-term (transport, manufacturing, energy), median 2.7% (standard median 2.6%) www.LRD.org.uk 78 Blackfriars Road London SE1 8HF 8

  9. Pay additions in 2017 24% of 2017 pay rises had some impact on additions to pay like allowances, premium rates etc • Around 6% of deals changed or improved pay additions • Total includes agreements where the pay increase flowed through to all or most allowances, simply maintaining their value relative to pay. • Includes consolidated pay additions, or where they were diminished in value, e.g. by not changing/increasing in line with pay, or being “recycled” Examples • DHL (Sainsbury's) Stoke: A £15 increase to the £200 Retention Bonus • Visteon Engineering Services: Technical Professional Allowance up to £210pm • Scottish Power Energy Networks: 2% pay rise/2.2% to flowthrough allowances www.LRD.org.uk 78 Blackfriars Road London SE1 8HF 9

  10. Bonus and incentives in 2017 7% of pay deals refer to bonuses or incentive payments Examples • Poundland Distribution Transport (Harlow): Non-infringement bonus doubles from 50pph to £1.00ph subject to achieving no vehicle damage/blameworthy accidents; and introduction of fuel competition for drivers • Siemens Industrial Turbomachinery: 2% plus bonus payment of £850 on reaching production targets/upto £1,700 on exceeding production targets • Health & Safety Executive: An organisational bonus of £450 (expected) for all staff except poor performers. Staff with a performance mark of 'Strong' or 'Exceptional' receive a higher rate www.LRD.org.uk 78 Blackfriars Road London SE1 8HF 10

  11. Equality issues in 2017/18 Equal value • Tesco: facing a new claim comparing retail and warehouse staff Gender pay gap reporting (April deadline) • Planning Inspectorate: developing pay and reward strategy to include equal pay audit and gender pay gap reporting • Fujitsu (2 agreements): discussion & action plans to follow gender pay gap review/reviewed quarterly; money for pay anomalies including gender Age-related pay (age gap widened in some cases by National Living Wage) • AF Blakemore Cash and Carry: pay for staff aged 21 increased to £7.50 (April 17) • Poundland: Youth rates (16/17) & apprenticeship up 20.2%, other rates 2%-4.2% “Family-friendly” leave • Tesco: Maternity pay increased by 14 weeks at half pay (after 14 weeks full pay) www.LRD.org.uk 78 Blackfriars Road London SE1 8HF 11

  12. Pay structures and performance Almost 6% of 2017 pay deals had an impact on pay structures or pay progression; 9% involved an element of performance-related pay Examples • Tesco: 10.5% over 2 years - shorter qualifying period for the Established rate; 5.25% “new investment” rise November 2017; 16p per hour “reinvestment” from premiums July 2018 ; and 3.0% “new investment” November 2018. Sunday/bank holiday premiums cut to time and a quarter. To discuss skills payment structure. • Asda: New 'Flexible' contract allows staff to work in varying areas of the store, employees have the choice of remaining with their existing terms and conditions, pay increased to £8.50ph, but breaks unpaid/work bank holidays if required • Shop Direct (Financial Services): Performance-related pay rises, 4% increase (uncapped) for a rating of 4, 2% (capped at grade maximum) for a rating of 3, 1% for a rating of 2, with no increase for a rating of 1. www.LRD.org.uk 78 Blackfriars Road London SE1 8HF 12

  13. Working time & employment package 2017 Aspects of paid working/non-working time addressed in 13% of deals • Greggs (Retail):an additional 1 week of annual leave to be taken on the anniversary of 30,35,40,45 years' service • Ocado Service Delivery:holiday conversion and salary buy back scheme • Magna Exteriors (Halewood): 39.5 hour week cut to 38 hours with no loss of pay Other employment package changes 8% of deals • Michelin: £5,000 terminally-ill payment • MTR Crossrail: Agency workers to be kept to a minimum • Expert Logistics (Crewe): Job share policy • Natural History Museum: Rental Deposit Loan Scheme www.LRD.org.uk 78 Blackfriars Road London SE1 8HF 13

  14. One-off surveys & enquiries Surveys • Voice at work (February 2018): Union reps taking part generally expressed support for the idea of “workers on the board” but that would have to build on other “voice” arrangements including timely consultation/access to decision makers: better legislation/more rights; a change of culture: improved recognition by employers; and stronger unions • Time off for trade union duties and activities (May 2017):Most union reps taking part (3/4) had a written “facility time” agreement; just over one third had at least one full-time rep; 40% said it had become more difficult to carry out their work. Enquiries • Shift patterns: PayLine provided evidence on shift lengths and start/finish times • Pay benchmarking: PayLine provides pay rates (see next slide) but also a perspective on which companies play a key role in specific sectors www.LRD.org.uk 78 Blackfriars Road London SE1 8HF 14

  15. Median basic pay and earnings levels (£/wk) • Lowest weekly basic rate (LRD PayLine); • Basic earnings (Annual Survey of Hours and Earnings 2017) • Reproduced from LRD Survey of the 2016-17 pay round (part 2) www.lrd.org.uk 15

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