BOROUGH OF POOLE

RESOURCES OVERVIEW GROUP

7TH JUNE 2007

The Meeting commenced at 7.00p and concluded at 9.10pm.

Present:

CouncillorGillard (Chairman)

CouncillorChandler (Vice-Chairman)

CouncillorsBrown, Mrs Evans, Mrs Haines (substituting for Councillor Sorton), Maiden, Martin, Montrose and Mrs Walton

Members of the public present: 0

ROG9.07DECLARATIONS OF INTEREST

Lee Baron, Principal Democratic Support Officer, Desmond Jones, Project Manager – Job Evaluation and Daniel Bond, Data Analyst and Information Officer and Mike Ellis declared personal interests in M.ROG12.07 – Equal Pay Review, as they could potentially be affected by the Review.

ROG10.07MINUTES

RESOLVED that the Minutes of the Meeting held on 22nd February 2007 be approved and signed by the Chairman as a true record.

ROG11.07SUCH OTHER BUSINESS AS, IN THE OPINION OF THE CHAIRMAN IS OF SUFFICIENT URGENCY TO WARRANT CONSIDERATION

There were no items of urgent business.

ROG12.07EQUAY PAY REVIEW

Colin Hague, Head of Personnel and Training Services, presented a Report which outlined the current position and progress that had been made with the Pay Equality Project which involved Job Evaluation. This Review was in accordance with the Workforce Plan, requirements of the National Conditions of Service Agreement and took account of equal pay legislation and case law. In support of the report, Members were given the presentation that staff had received at the Job Evaluation Roadshows that took place on the 23rd and 24th April 2007.

Colin Hague, Head of Personnel and Training Services commenced by advising Members that the Equal Pay Project had the potential to have significant implications for the Council and therefore a pro-active approach had been adopted in Poole on managing equal pay which had resulted in potential equal pay issues and Council exposure to successful equal pay claims being reduced.

There was a concern to carry out the project in a way that strived to achieve fair treatment of employees, ensured equal pay principles applied and that minimised the risks for the Council.

A pay and grading review using job evaluation, an equality impact assessment and an equal pay audit was being undertaken for the following reasons:

  • To ensure a fair and consistent approach to grading arrangements and addressing other wider equal pay issues;
  • To address equal pay for groups where gender pay discrimination is an issue;
  • To meet the national agreement requirement to carry out an equal pay review;
  • To meet Trade Union expectations (both locally and nationally);
  • To reduce the risk of successful equal pay claims;
  • To adopt an approach consistent with the Council’s own core values and approach to equality;
  • To undertake a review of the current salary structure including the need to address reward issues;
  • To support equal opportunities and meet expectations and planned actions set out in the Council’s People Strategy and the Workforce Plan.

Previous reports relating to equal pay and job evaluation have included reports submitted to the Resources Overview Group on 2 October 2003, 19 October 2005 and 7 September 2006. Cabinet also reviewed the financial position for the equal pay review on 6 February 2007.

This was an Equal Pay Project, which was driven by equal pay considerations. Job evaluation was the method being used to help achieve this. The Equal Pay Review was the major strand of the Personnel & Training Services work on equalities during 2007/08. This was consistent with the Council Workforce Plan and will involve significant time and cost resources. This has been provided for both within the Personnel and Training Services Business Plan and the Council Medium Term Financial Plan.

A National Pay Commission report suggested that for local authorities the principal pay issue they faced was equal pay rather than low pay.

Equal pay and Job evaluation claims in other authorities have shown that this type of project can involve risks such as: -

  • Potential adverse employee relations implications affecting employee morale, motivation and turnover in some Councils;
  • Legal claims and the potential for “no win no fee” solicitors operating against Councils. This has involved multi-million pound settlements and large claims for some public bodies where particular circumstances have applied;
  • Significant financial exposure based on the experience of some Councils and public bodies where equal pay issues have not been addressed.

Work on this exercise in the Borough of Poole has sought to minimise these risks. Conditions of service and a number of service grading reviews have sought to address equal pay issues.

The potential and likelihood of difficult employee relations and potential significant financial risk exposure needed to be recognised. Equal pay was a significant risk area for Councils and the Audit Commission have highlighted this risk in a management letter.

In 2003 the consideration of different job evaluation schemes to help achieve equal pay were reported. This consideration included use of a HAY evaluation process, a scheme known as Peodesy, a national model job evaluation scheme, the Greater London Provincial Council Job Evaluation Scheme, a South West Provincial Employers Scheme, a competence scheme and an offer to design a new job evaluation scheme. The trade unions and Council representatives jointly considered the different schemes and options available.

It was reported to the Resources Overview Group on 2 October 2003 that following a joint assessment, the Greater London Provincial Council Job Evaluation Scheme looked to be the most appropriate scheme for Poole. This scheme has been used by Authorities in Greater London, and by other large Councils (including Somerset County Council and Dorset County Council), and was a scheme supported by the South West Provincial Employers Regional Secretary and the Employees Secretary.

Identifying the Greater London Provincial Council Job Evaluation Scheme as the most appropriate scheme for the Borough of Poole followed a benchmark survey involving 234 jobs. Account was taken of the impact different schemes would be expected to have on the existing rank order of jobs, equalities considerations, Equal Opportunities Commission consideration of the Greater London Provincial Council Job Evaluation Scheme, trade union views, potential costs and disruption implications and the experience of other Councils in establishing an appropriate rank order of jobs. It would be desirable for Council to formally approve the use of the Greater London Provincial Council Job Evaluation Scheme.

The National Agreement required Local Authorities to have an agreement by April 2006 as to how the Equal Pay Review would be completed. Locally this agreement was reached. The National Agreement also required Authorities to implement the pay and grading review by 1 April 2007. However, more than two thirds of the 410 local authorities in England and Wales, including Poole have not been able to meet this target date.

Within the Borough of Poole there has been good progress on addressing equal pay in particular service areas and much effort has been made to advance the full equal pay project. The logistics of this massive exercise of job evaluating all Local Government Services’ posts by agreement has meant that the 1 April 2007 date had not been met. The sheer scale of the work was enormous with over 1,000 individual job evaluation questionnaires (not including school support staff) being completed, jointly evaluated and checked for consistency of application by Heads of Service and postholders prior to any form of pay modelling taking place. It was planned and hoped that the review would be completed during the 2007/08 financial year: The latest project plan anticipated completion by this date although there were some parts of the project where progress would be dependent and reliant on trade union arrangements and external factors where timescales could not be guaranteed.

Members were advised that there was an Equal Pay Steering Group which included the Portfolio Holder, Regional and Local Trade Union Representatives, Strategic Director, Personnel and Training and Financial Services representation.

Nationally the legal landscape, employee relations and potential costs associated with equal pay reviews had changed:-

  • The effect of tribunal judgements and litigation have made it more difficult to proceed by local collective agreement. The growth and success of “no win, no fee” solicitors (mainly in the North East and Midlands), challenging local Union Agreements and successfully pursuing some claims against the unions and employers involving up to 6 year back pay claims had affected the position and potential risks;
  • Government restrictions on capitalisation, which had made it difficult for some authorities (with high claims and legal exposure) to develop an affordable settlement on equal pay back pay. The situation now was that all Agreements had to be agreed with Unions at national level before implementation can take place;
  • Whilst these issues have been highlighted by the Local Government Employers Organisation drawing attention to the above, Central Government had made clear it would not provide extra funding for equal pay / job evaluation settlements.

In response to the above developments, the Council has carried out equal pay reviews and undertaken actions where these have been potential equal pay considerations details of this were provided as an Appendix to the report.

Recent settlements agreed individually with staff have highlighted the potential for up to 6 years back pay to apply, and been offered individually in full and final settlement of equal pay claims up to the date of settlement if circumstances warrant this. This had helped inform staff of the potential for them to claim back pay. Implementation had taken account of dates appropriate to the particular situation including union/employee claim dates.

The outcomes in carrying out these equal pay reviews had been significant in addressing pay equalities. One outcome was that the average incremental progression of female staff had been significantly greater than male staff. (0.78 increments per female employee on average compared with 0.46 increments per male employee during 2006/07).

These equal pay review actions had reduced potential equal pay claim areas and as a consequence potential Council liabilities.

The Project Plan was revised to take into account additional work involved in meeting the National Agreement as quickly as possible whilst making every effort to ensure we had undertaken due diligence before finalising job evaluation outcomes. The revised Project Plan now allowed for implementation to commence early in 2008 on a phased basis.

All jobs subject to the Greater London Provincial Council Job Evaluation scheme had been evaluated and checked. There were 1,500 questionnaires and variations submitted resulting in just over 950 jobs being evaluated.

Each Service Unit Head has received a rank order of jobs within their respective Units to comment upon. The purpose of this check is to ensure each postholder has done their job justice through the job evaluation questionnaire submitted for evaluation. This part of the process was just being completed.

The process of notifying employees of the job evaluation assessment of the post they hold and advising of appeal arrangements commenced on 29 May 2007.

All school support jobs had now been evaluated with around 600 questionnaires or variations to questionnaire information being received. This process has resulted in the Equal Pay Team being able to identify around 70 unique school support jobs.

A representative panel of Headteachers have now had the opportunity of reviewing school evaluation results and as a result of their observations a further check was planned with all Headteachers.

Inter-Unit and Inter-School consistency checks have, and are being carried out with trade union representation.

The approach being applied in schools was broadly consistent with arrangements for Service Units. There was a separate Schools Equal Pay Steering Group that reported to the main Steering Group.

Preparation of a School Equal Pay handbook that would support schools with achieving equal pay was planned as part of the equal pay project activity.

The Borough of Poole have, and continue to learn from others regarding equal pay implementation. Considerable networking (through a network group, training and contacts in other Councils) was taking place to draw on the experiences of others and this was helping project progress and management in a way that minimised risks.

The Borough of Poole continues to work closely with Bournemouth who were at a similar stage of the process (although slightly behind Poole) and with whom we intended to exchange like for like information. This would inform the labour market review which would be undertaken prior to finalising the Poole pay and grading structure.

Personnel and Training Services have supported Poole Housing Partnership in carrying out a pay and grading review. Whilst the process involved some stresses, employees voted in favour of the package. Implementation of a new pay and grading structure that addresses equal pay has taken place.

The trade unions were citing a settlement in a nearby South West Council which it was understood involved 17 Social Work Assistants receiving salary payments (of up to 6 years back pay) at a total cost of £270.000. The claim involved a Tribunal application but was settled following an internal review process that assessed the merits of the claims.

Dorset County Council have carried out an equal pay review. This was understood to involve unlimited protection. It is, however understood that through pro-active management they have been able to reduce the number of situations where there was protection without a legitimate justification to a relatively small number.

Advice had been issued to managers and visits to Unit Management Teams had, and were taking place by the Equal Pay Review team. This was important as problems could be anticipated in some services where the relative rank order of jobs changed.

A number of Equal Pay employee roadshows took place on 23 and 24 April in a variety of locations for all employees. Guidance was given regarding the information employees would receive for them to consider as part of the final consistency check on the evaluation of their post, with an appeal opportunity. This check would afford employees the opportunity to appeal against the evaluation of the post and the factor levels applied. This opportunity existed prior to action that would follow as the next stage of converting results into pay. There would, towards the end of the project, be a final ballot opportunity that would be conducted through the trade unions once the full package was determined (including pay assimilation and any protection arrangements) which should lead to a collective agreement.

Notification of the evaluation and factor levels was being phased because of the large number of jobs. In addition, Equal Pay Clinic support and an Equal Pay Helpline was being provided for employees to explain job evaluation outcomes so they were able to make an informed decision on whether to pursue an appeal or not.

There had been some employee reaction to trade union advice that case law would limit the protections the Council could offer. Some employees were surprised by the union approach which has been affected by legal actions taken against trade unions in another local authority.

Consideration had been given to publishing a rank order of all jobs at this stage. However, it was felt that this would cause major logistical problems and for technical reasons was not supported by either the unions or South West Provisional Employers.

Loop communications in liaison with Customer Services had been taking place.

Vacancy Clearance panel have given authority for the Equal Pay Project Team for 2007/08 subject to a mid year review. The team comprised 4 postholders and included trade union representation and a Project Manager.

The demands on the Equal Pay Project Team may be expected to change and reduce in 2008/09 although a number of activities would require attention including equal pay audits and preparation and publication of a School Equal Pay handbook.

The project has involved excellent joint working and a mutual concern with the unions to reach agreement if possible.

The trade unions were pressing for completion of the Equal Pay Review as soon as possible. Joint work was being undertaken to achieve this.

The trade unions were stating that they will proactively pursue claims for back pay, if these are made. This could potentially involve claims of up to 6 years. Trade unions are concerned that they did not leave themselves exposed to legal action against them which had occurred in some situations.

The unions were proposing that should equal pay claims occur, that internal procedures were utilised rather than both the Council and unions incurring avoidable legal costs. The trade unions have queried the resource identified for the equal pay review and its adequacy.