payrise due.

[daveyeff]

still in the dark though. not even a whisper. CWU for you.

[Surreypostie]

What exactly are you expecting? More strings than pinnochio for any rise, no strings = no rise, expect IA this year.

[daveyeff]

had a look on CWU site, all it says on there is they are seeking a 35 hour week by 2020. oh, and industrial action if they close the pension

[TrueBlueTerrier]

still in the dark though. not even a whisper. CWU for you.

well it was a long whisper

http://www.royalmailchat.co.uk/communit ... cy#p724117" onclick="window.open(this.href);return false;

SECTION 3: PAY, HOURS AND LEAVE


Further to the In-committee discussion paper presented to the Postal Executive in November 2015 and Motion 1 carried at the Postal Executive meeting on 6th January, this Section provides updated pay information to help determine our policy priorities and shape our claim for 2016.

Using the very latest paybill data from Royal Mail and the most recent set of economic and settlement indicators, it is now possible to provide some more accurate, up to date estimates of the likely costs relating to various elements of our claim for 2016.

As well as considering the level of any award from April and the key economic and settlement comparators, we also need to consider the duration of any deal. Given the scale, complexity and timescales of the issues we face around future change, redesign of the pipeline and the significant costs involved in resolving issues around pensions, holiday pay and securing a substantial reduction in hours, we will need to consider the option of securing a relatively straightforward one year deal for April 2016 but as the start point for a longer term set of talks that address wider issues around future strategy and long term reward.

Basic Pay

The total paybill cost for CWU represented grades (i.e. basic pay and allowances including NI and pensions) is £4.37 billion. This includes the cost of the 2.8% rise to basic pay and allowances in April 2015. (Please note these are Royal Mail figures and should therefore be treated with caution).

The total paybill figure comprises the following:

Pay Element £mTotal Fixed Costs (basic pay incl. LW)3,677,235,522Total Overtime 482,747,343Total Shift 111,393,431Total Skills Allowance 32,693,998Total Legacy Bonus 21,375,460Total Reserved Rights 14,867,174Total Paybill 4,372,823,333
The total paybill figure of £4.37 billion represents 46% of Royal Mail’s total revenue of £9.4 billion in the 2014/15 financial year.

According to the latest paybill data, the cost of a 1% rise in basic pay and allowances for CWU-represented grades would total £43.7million.

A 2% rise in basic pay and allowances would therefore cost £87.4m with a 3% rise costing £131.2m.

Each half a percentage increase in basic pay and allowances would cost the business £21.8m.

The Unite/CMA grades in Royal Mail are currently balloting for industrial action over a 1.3% pay offer from their September 2015 review date.

Employee Shares

On 19th November 2015, Royal Mail disclosed a dividend payment of 7.0p per share payable on 13th January 2016. This means that eligible employees who have received 832 employee free shares were paid a dividend of over £58.

In total, each eligible full-time employee will have received around £306 in dividends by end of January 2016.

By October 2016 the first lot of free shares (613 per eligible full-time employee) will have been in the SIP for three years. Based on a share price of £4.87p the shares would be worth £2,985 in total.

CWU Research has estimated that for basic rate taxpayers the sale of shares in April 2016 will net £2,317 falling to £2,116 for higher rate taxpayers. If employees keep their shares in the SIP and sell after five years then no tax or NI is liable on the full £2,985.

In relation to a question from the In-Committee session about the likelihood of staff selling their shares, CWU Research concludes that it’s difficult to use previous privatisations as a guide to the future behaviour of Royal Mail employees. In the case of BT, for example, employees were not given free shares but 10% of shares were reserved for employees to buy.

Since privatisation, Royal Mail has now paid out a total of £413m in dividend payments to shareholders.

Economic Indicators

Any pay claim for 2016 will need to be set against the usual range of key economic indicators including UK median pay rates, settlement levels, inflation (current and forecast) and earnings growth.

The basic weekly pay of an OPG outside London is £405.81 – well below the UK median full-time weekly rate of £518.

Latest settlement data shows that median basic pay awards remain steady at 2% according to the latest reports from both Income Data Research (IDR), as at October 2015 and XpertHR, as at November 2015. Labour Research Department’s (LRD) analysis of union-negotiated deals shows settlements running (higher) at 2.5% in the three months to November last year.

Looking ahead, XpertHR forecast median private sector settlements of 2% in 2016 with an interquartile range (i.e. 50% of all deals) falling between 1.5% and 3%.

The latest inflation data shows Retail Prices Index (RPI) rising to 1.3% in January 2016 (up from 1.2% the previous month) while CPI rose to 0.3% (up from 0.2%). In terms of inflation forecasts, IDR is predicting an RPI rate of 1.9% in April 2016 while HM Treasury forecast an RPI rate of 2.1% over the course of 2016 (CPI forecast 1.3%).

In relation to average earnings, XpertHR expects growth of 2.5% in 2015 rising to 3.2% in 2016 while HM Treasury forecast average earnings growth of 3.4% in 2016.

Hours/Shorter Working Week

The last cut in hours was secured for members under the 2010 Business Transformation Agreement which reduced the working week for Royal Mail Operational Grades by one hour from 40 to 39 hours gross (equivalent to 35 hours 40 minutes net).

Motions 9 and 10 carried at 2015 Annual Conference both commit us to “pursuing a substantial reduction in the working week” but while the shorter working week has long been CWU policy, the costs of delivering any “substantial reduction” in the working week will be significant. According to Royal Mail, the costs associated with a cut in hours comprise two elements: the cost of paying FT employees for the hours no longer worked, plus the cost of paying overtime to cover the remaining workload.

A shorter working week also has a cost impact in relation to part time employees by effectively increasing their hourly rate of pay. For Operational Postal Grades (OPGs), a one hour reduction from 39 to 38 gross weekly hours would generate a 2.63% increase in part-timers hourly rate.

Royal Mail estimate that a one hour cut in the working week would cost in region of £165m or about 3.7% of the CWU total pay-bill, so the reality is that any deal to deliver a “substantial reduction” in hours may need to form part of a wider, long term Agreement around the future of deliveries and future design of the network.
Evidence that shorter hours can boost output has been around for decades. Recent research by the New Economic Foundation confirmed the benefits of shorter hours and set out the case for a reduced working week. According to the NEF, those who work less tend to be more productive, hour for hour, than those regularly pushing themselves beyond the 40 hours per week point, they are also less prone to sickness and absenteeism and make up a more stable and committed workforce.
Shorter working weeks can be competitive too: the Netherlands and Germany have more shorter working weeks than in Britain and the US, yet their economies are as strong or stronger. The latest trail blazers for the shorter working week are in Sweden, where a variety of major companies have cut their working week to improve wellbeing and, as a result, have reported significant improvements in productivity and lower rates of staff turnover.

In the UK the truth is that despite working fewer hours than our grandparents and parents, most surveys paint a picture of British workers feeling exhausted and under growing pressure. A recent report by the Chartered Institute of Personal Development (CIPD) found many employees feel under “excessive pressure” with “far too many people doing more work than they can cope with”. It described a “wellbeing vacuum” in UK workplaces, which is costing UK employers dearly in absenteeism. These findings confirmed an earlier CIPD report which found that: employees felt they were working harder; the work was more demanding and intense; with overwhelming and numerous deadlines burdening workers with ever more tasks.

Holiday Pay

This has generally been recognised as a difficult issue because of the overall cost implications and uncertainty over the developing legal position. It was hoped that the company was prepared to agree changes now and recognise that all overtime should be included in future holiday pay calculations, even though they would arguably look to offset the cost of this elsewhere.

Annual leave

In relation to leave, we have a series of Conference motions calling for a number of improvements to annual leave provision. These include:

Uprating leave entitlement at every five year step;

Introducing a new step after 10 years’ service; and

Giving staff greater flexibility to purchase up to 7 weeks’ leave.

Royal Mail estimate that the cost of adding one additional days’ holiday for all CWU represented grades would total £28.5m (around half a percent of the total paybill).
Length of Service (yrs)No/EmployeesPercentage518,08015%5-9.9916,78114%10-14.9921,73919%15-19.9921,35518%20+38,96033%Total116,915100%
While Royal Mail have yet to provide an estimate of the cost of adding an additional holiday increment (after 10 years’ service), they have provided a length of service profile for CWU employees (see above). This shows that around 20% of employees fall into the 10 to 15 year bracket which suggests the cost of introducing the new 10 year leave step would be around £5.7m (a fifth of the £28.5m total).

The table above shows the average length of service for CWU represented grades is currently 16 years.

RM has also provided an age profile for ‘frontline delivery, processing and collection OPGs’ (below). This shows the ‘average’ frontline employee to be aged in their mid-forties.

While the option of purchasing extra leave is clearly cost neutral (there is still a wider question about the practical ability of employees to take any extra leave they have purchased).

Royal Mail Finances

In preparing our pay claim for 2016 we also need to factor in the current state of Royal Mail’s finances. The latest annual accounts show that the company’s finances have improved significantly over the past five years:

Total revenues have risen by £1,009m (or 11.9%) – up from £8,415m in 2010/11 to £9,424m in 2014/15.

Operating profits (before transformation costs) are up from £210m in 2010/11 to £611m in 2014/15 – a rise of 190%.

In UKPIL, overall headcount has fallen from 155,181 in 2010/11 to 142,910 in 2014/15 - a fall of 12,271 (8%).

Since 2010/11, Royal Mail has paid a total of £828m in transformation costs.

The latest half year results for 2015/16 published in November 2015 confirmed Royal Mail’s steadily improving financial position:

Revenue steady (with a 1% rise in parcel revenue offset by 3% fall in letter revenue);

Operating profit (before transformation costs) of £342m;

Operating profits (after transformation costs) of £248m;

Operating profit margin (after transformation costs) of 5.6%;

Profit before tax of £240m; and

Free cash flow of £49m.

According to analysts CMC Markets, Royal Mail’s latest trading update for the nine months to December 2015 showed the company was “moving in the right direction” and sent Royal Mail’s shares 17p higher to 438.5p. Royal Mail Group reported a 6% rise in parcel deliveries over the Christmas period when it handled 7.5 million more parcels in the build up to Christmas than the year before.

Royal Mail Efficiency

Ofcom’s annual monitoring update on the postal market 2014/15 presented a good story on efficiency, price, customer satisfaction and profit margins (something which may make it harder for the Regulator to impose any new significant regulatory measures on Royal Mail). The key findings were:

Ofcom monitors movements in total costs in terms of price, volume, efficiencies achieved and other one-off costs as an indicator of Royal Mail’s efficiency. This is known as PVEO (price, volume, efficiency and other) analysis. This measure indicates an underlying efficiency improvement (excluding transformation costs) of c.2.6% against c.0.7% the previous year;

Using workload as a measure of efficiency, Ofcom found that underlying real unit costs (excluding transformation costs) decreased by c.2.2% (2013-14 restated: c.0.4%);

Royal Mail’s own measure of productivity improvement for 2014-15 was 2.5% for both Mail Centres and Delivery Offices, which was within Royal Mail’s target of 2-3%. This was achieved by a 2.3% reduction in gross hours despite a slight increase in workload (0.1%);

Over the last five years, revenue per full time equivalent (FTE) employee adjusted for Consumer Pricing Index (CPI) has increased by 8.2%, whereas people costs per FTE adjusted for CPI has stayed static.

Review of Efficiency Measures

Whilst the work on this was launched it has never been fully explored as priorities have constantly shifted focus. However, it is clearly important we ensure we have a mutual understanding of how efficiency is measured especially with the assumptions made by the Regulator and the reported daily pressures in the workplace.

The Agreement in BT 2010 included a commitment to a system that is fair, objective, equitable, fully understood and benchmarked on a like for like basis, and our on-going policy must demand that we pursue that commitment to a conclusion.

Incentive/Bonus Payments

Following on from the stop-gap arrangement for 2014/2015, we were due to negotiate new arrangements going forward. As previously discussed with the Executive this will continue to be a difficult set of negotiations, particularly in the absence of agreed productivity measurement systems and standards. Clearly this still remains a difficult issue but remains policy which we need to pursue in future talks.

Parcelforce Worldwide, Royal Mail Specialist Services (RMSS)

Although the Agenda for Growth Agreement included a three year pay settlement across all functions, the above business units remain recognised as separate Pay Bargaining units within Royal Mail Group and in previous years have been subject to separate Pay negotiations. The reality in the current climate is that it is extremely unlikely that any unit would be allowed to agree levels of reward which exceeded that negotiated in the core letters operation.

However we recognise that across the range of pay and reward agenda points covered in this section including pay rates, working time, allowances etc, the starting point differs from Royal Mail core operations, across the various functions. It therefore remains imperative that we can ensure that pay discussions covering these bargaining units address the specific market and operational challenges these businesses face and meet the aspirations of our members. To that end we would always look to reserve our position in regard to the shape and structure of any deal in these areas to maximise or tailor the benefit package

Recommendation 6: That we seek a one year Pay and Reward Agreement from April 2016 which seeks to achieve our current policies around pay, hours, and leave (including holiday pay) and a further longer term Agreement aligned to the wider negotiations around future change. That within the above strategy, agreed pay/ reward arrangements for specific bargaining units e.g. Parcelforce and RMSS are shaped to meet the challenges and member aspirations within those units.

http://www.royalmailchat.co.uk/communit ... um#p724350" onclick="window.open(this.href);return false;

Recommendation 6: That we seek a one year Pay and Reward Agreement from April 2016 which seeks to achieve our current policies around pay, hours, and leave (including holiday pay) and a further longer term Agreement aligned to the wider negotiations around future change. That within the above strategy, agreed pay/ reward arrangements for specific bargaining units e.g. Parcelforce and RMSS are shaped to meet the challenges and member aspirations within those units.

[daveyeff]

cheers teebs......im glad someone is up to speed

[daveyeff]

I particularly liked the bit where it says ''please note, these are RM figures, therefore should be treated with caution''. ....well I laughed anyways.

[meercat]

had a look on CWU site, all it says on there is they are seeking a 35 hour week by 2020. oh, and industrial action if they close the pension

Knowing RM that will mean doing the same work we do now but having 4hrs less to do it.