Lifting the lid on current trends in the

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 Xpert. HR, LRD, IDR) Employers’ associations & sector media Unions’ own data www. lrd. org. uk 78 Blackfriars Road London SE 1 8 HF 1

What is the LRD Pay. Line 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 SE 1 8 HF 2

What can LRD Pay. Line 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 SE 1 8 HF 3

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 SE 1 8 HF 4

Pay trends in 2017 by sector Median results Above‐trend 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% 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 SE 1 8 HF 5

www. lrd. org. uk 78 Blackfriars Road London SE 1 8 HF 6

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% • G 4 S (RBS): Living Wage Foundation Living Wage (£ 8. 45 ph) from 1 October 2017. Differentials for Team Leaders and Supervisors maintained at 6. 25% • www. lrd. org. uk 78 Blackfriars Road London SE 1 8 HF 7

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 SE 1 8 HF 8

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 £ 210 pm Scottish Power Energy Networks: 2% pay rise/2. 2% to flowthrough allowances www. lrd. org. uk 78 Blackfriars Road London SE 1 8 HF 9

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 50 pph to £ 1. 00 ph 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 SE 1 8 HF 10

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 SE 1 8 HF 11

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; 16 p 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. 50 ph, 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 SE 1 8 HF 12

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 SE 1 8 HF 13

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: Pay. Line provided evidence on shift lengths and start/finish times Pay benchmarking: Pay. Line 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 SE 1 8 HF 14

Pay and earnings by job group 2016 -17 (£/wk) Top 25% Median Elementary occupations Lowest basic pay (LRD) 408. 91 333. 36 Full‐time basic earnings (ASHE) 415. 50 344. 90 Process, plant and machine operatives Lowest basic pay (LRD) 547. 87 415. 05 Full‐time basic earnings (ASHE) 524. 40 418. 20 Sales & customer service occupations Lowest basic pay (LRD) 376. 27 309. 73 Full‐time basic earnings (ASHE) 435. 00 351. 10 Caring, leisure & other service occupations Lowest basic pay (LRD) 391. 34 354. 43 Full‐time basic earnings (ASHE) 407. 40 341. 30 Skilled trades occupations Lowest basic pay (LRD) 551. 72 473. 33 Full‐time basic earnings (ASHE) 576. 30 470. 90 Administrative and secretarial occupations Lowest basic pay (LRD) 363. 34 323. 37 Full‐time basic earnings (ASHE) 535. 80 421. 60 Associate professional and technical occupations Lowest basic pay (LRD) 603. 67 526. 89 Full‐time basic earnings (ASHE) 758. 50 578. 00 Professional occupations Lowest basic pay (LRD) 887. 83 575. 34 Full‐time basic earnings (ASHE) 923. 30 717. 00 Managers, directors and senior officials Lowest basic pay (LRD) 1, 192. 79 624. 09 Full‐time basic earnings (ASHE) 1, 230. 50 800. 00 Bottom 25% 302. 28 300. 00 348. 33 339. 70 285. 36 302. 60 325. 25 294. 90 394. 10 378. 20 301. 01 346. 20 445. 77 456. 40 438. 71 561. 60 518. 68 543. 00 Median basic pay and earnings levels (£/wk) • Lowest weekly basic rate (LRD Pay. Line); • 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