Quadrant Response To Age Legislation And RM Transformation

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Quadrant Response To Age Legislation And Royal Mail Transformation

No: 925/10
Ref: 307
Date: 22nd October 2010


All Postal Branches with Quadrant Members
All Quadrant Area Representatives


Dear Colleague

Quadrant Response To Age Legislation And Royal Mail Transformation

Following the introduction of the Age Discrimination Legislation in 2007 it was necessary for Quadrant, along with other businesses, to review its EVR calculations in order to comply with the new legislation. Colleagues will recall that Royal Mail also went through this process which resulted in changes to the MTSF agreement.

Quadrant’s proposal at that time was to apply a factor to the weekly earnings and the number of weeks redundancy payable in order to calculate a payment that was no less and no more than the average payment under the previous EVR calculation. The calculation across the total workforce produced a 2.58 figure. Quadrant rounded it up to 2.6 and commenced to apply the 2.6 multiplier to EVR calculations.

The department continued to make representation to convince the employer that an agreement should be reached, that imposition was not the way to do business and that the situation threatened the good industrial relations that had been developed over a number of years.

The business indicated that they would listen to further representation from the union on the issue and we have now reached the attached consensus on the matter which also positions us for the Royal Mail transformation impact.

In conclusion neither Quadrant or the union had any choice but to respond to the legislation but whilst recognising that the required adjustments would naturally spread the EVR budget as it were, we constantly pursued the objective of designing an EVR approach which is fair and respected employee loyalty and length of service.

The negotiators were convinced that they had arrived at the best possible outcome in these discussions and the Postal Executive has endorsed the agreement.

Any enquiries in relation to this LTB should be addressed to Terry Pullinger, Assistant Secretary, email dwyatt@cwu.org, quoting reference 307.

Yours sincerely



Terry Pullinger
Assistant Secretary

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AGREEMENT BETWEEN QUADRANT AND THE COMMUNICATION WORKERS UNION IN REGARD TO THE NEW REDUNDANCY PAYMENT STRUCTURE


Introduction

This agreement has been reached in recognition of the challenges faced by Quadrant and its employees both operationally, legally and commercially as it responds to age legislation and the effects of Royal Mail’s transformation deployment.

Royal Mail Transformation

Both parties recognise that the need for effective industrial relations is critical, as adversarial relationships damage the interests of both the company and employees. Against that backdrop it is important to recognise those elements of change that can and can not be influenced by Quadrant.

Quadrant is an internal provider to Royal Mail and provides catering services wherever they are asked to do so by Royal Mail. However Quadrant plays no part in the decision making process with regard to site closures be they Mail Centres, RDCs, Administration or Delivery Offices. In respect of the retention of facilities in existing sites the process is that detailed in the current ‘Programme of Reviews of Catering Services Agreement’ signed between Royal Mail and the CWU in 2007.

The CWU recognises that where Royal Mail indicates a change in the catering provision then Quadrant is obliged to implement that change, and as such the CWU commits to work with Quadrant to bring about such change in a smooth and timely manner whether it be the closure of a catering facility or the reduction in the service span of a catering facility or the change in the type of service provision within a catering facility as identified by the ‘Programme of Reviews of Catering Services Agreement’.

Quadrant fully recognises that it is responsible for dealing with the people issues affecting Quadrant employees and commits to work with the CWU to explore every opportunity to meet the preferences of its employees through change including the provision of job and career opportunities, on a voluntary basis, within the wider Compass organisation.

Age Legislation

Following the changes in age legislation Quadrant finds it necessary to amend its calculation of redundancy payments to comply with the new legislation.

Quadrant in its proposal had committed to ensure that the overall redundancy payments are on average the same value, neither increasing nor reducing its liability which stood at c£7.02m.




Agreement

Redundancy payments will be made up of two elements.

First Element: Statutory redundancy payment.

Second Element: Enhancement based on an individual’s length of service with Quadrant.

The first element is well understood and does not require any further explanation; the value of this liability currently stands at £2.96m.

The second element, which produces a balance of £4.06m from the £7.02m budget, Quadrant is prepared to increase to £4.30m in order to fund payments on the following basis;

An employee would receive an enhancement calculated by multiplying the employee’s average weekly wage by their notional length of service. The notional length of service is calculated by taking their actual length of service (completed years) increased by a further 80%.

Example: Employee earns on average £275 per week and has been employed for 7 years and 6 months;

First Element: Statutory Redundancy = £2,204

Second Element: The notional length of service is 7yrs 6 months, rounded down (as it is with statutory redundancy) to 7 years and increased by 80% i.e. a further 5.6yrs, giving a total notional length of service of 12.6 years.

The enhancement payment will be £275 x 12.6 = £3,465

Total Payment = £5,669

Phased Closure Arrangements

Concerns have been raised from employees working in units earmarked by Royal Mail for closure.

As Royal Mail’s operations are reduced in a phased approach to closure, Quadrant is required to reduce its operations in line with Royal Mail’s requirements.

Quadrant employees may be asked to accept a reduction in working hours for which they will be compensated (in line with agreed processes), however having reduced their hours the employees are concerned that any redundancy entitlement may be adversely affected to a greater level than the compensation received for loss of hours if calculated on the new revised hours. Against that backdrop the following process has been agreed;




For those units earmarked for closure:

Employees for whom redundancy would apply would have the redundancy payment protected based on their entitlement calculated on their hours in place at the time of notification that the unit is earmarked for definite closure. The length of service will be calculated up to the last day of employment as is normal practice.

Any payment made to the employee relating to a reduction in hours brought about by a phased reduction in operational requirement will be made at the time of the reduction in hours and would be subject to the agreed processes and principles already in place.

The employee’s redundancy payment due on closure of the unit will not be recalculated on the new reduced hours but will be based on the original calculation less any payment received for loss of hours. This will protect the individual’s redundancy entitlement at the appropriate level.

Example:

Unit receives notification on 1st January of closure on 30th September.

Unit is requested to reduce services on 1st April.

Employee’s redundancy entitlement is calculated based on hours worked on 1st January, say £5,000.

On 1st April employee receives say £1,000 compensation for reduction in hours.

Redundancy payment due on 30th September would be £4,000 (£5,000 less £1,000). This payment is likely to be higher than that calculated on the new reduced hours put in place on 1st April.

This protects the employee’s redundancy entitlement, however it is agreed that should an employee not wish to reduce their hours or stay on through the phasing process then they will be allowed to leave and receive their redundancy entitlement. Equally if an individual who is participating in the phased process manages to secure alternative employment during the phasing period, they will be allowed to leave and take up their new employment and receive their redundancy entitlement.






Steve Buesden Terry Pullinger
Managing Director Assistant Secretary
Quadrant CWU

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