January 31st, 2014

Following a ballot of members Prudential section have reached agreement on the 2014 Pay Review.

The deal consists of :-

• 3% Merit Pot
• Minimum FTE Income of £16,078 (equivalent of London Living Wage)
• Review of those employees beneath 80% of market for their role by
  end of Q2

The result of the ballot was:-

Accept the offer 97%
Reject the offer 3%

Turnout 35%

Background

Last November Unite submitted a pay claim to UKIO asking for a headline pay deal worth 3.6% (November RPI + 1%) plus some other pay related increases.

Unite then held a series of constructive talks with the UKIO business in relation to the 2014 annual pay review.

We were not able to agree on everything that was in our claim, but we believe the offer negotiated is, for the third year running, at the top end of deals reached in the Finance Sector.

Unite had requested a merit pot that would enable the majority of employees to receive an increase to counteract the effect of RPI. At the time of the claim RPI was 2.6%.

As a result of these negotiations we are hopeful that a significant majority of employees, who are positioned below or around the market mid-point and are rated meeting or above will receive an increase close to or above the current rate of RPI.

Members will be aware that Unite Prudential Section have led the way in the Finance Sector in asking for a Minimum Income that equates to a living wage. We recognise that those employees paid the least suffer most as the costs of basics such as food, energy and transport, increase more than RPI.

We are therefore pleased that Prudential has again agreed to meet our request and this year the Minimum (Full time Equivalent) Income for Prudential employees will be £16,078. This figure is equivalent to the Living Wage in London. Anyone currently earning less than the Minimum FTE Income of £16,078 will see their pay increased to that amount and then, where appropriate, have any money awarded as a result of the salary review process added to this figure. The money allocated to for this part of the offer is separate, and in addition to, the 3% merit pot outlined above.

One of the measures managers use when setting pay increases is the position of employees against the market. Unite believe that no-one’s overall pay should be below 80% of the market for their role. UKIO have agreed to review all employees in this position by the end of Q2 2014 and will report back to Unite the outcome of the review. If, following the review, it is found that the role sizing and market match are appropriate, consideration will be given to uplift the base pay of those employees to bring them up to a minimum of 80%.

Areas of Disagreement

As stated above whilst the offer is a good one and is at the top end of settlements in the Finance Sector we weren’t able to agree with the Company on all aspects of our claim.

The key area where we differ is the strategy that the Company aligns itself to when agreeing the pay award, despite its continuing rise in profits.

It is our belief that when the Company are delivering record profits they could afford to pay their staff more and should do so by putting more money into the pay pot.

Their profits are created by the work our members do. Why should only the people at the top of the organisation enjoy the generous rewards in terms of pay that these profits bring? The Company are quick to claim, when offshoring jobs, that the trickle-down effect of moving jobs abroad will raise living standards for everyone in the area, yet here in the UK no such trickle-down effect is allowed as the Directors keep the spoils for themselves.

The Company position is that, despite the year on year records profits the Company achieves, their pay strategy should be based on giving increases which are competitive in the Finance Sector and that they can’t be seen to be giving bigger pay increases than their peers, as that would make them uncompetitive. We wholeheartedly disagree with this principle.

We also believe that as this year is the first in a number of years that the pot is greater than RPI and the Company is making record profits, that all employees should receive an increase in their basic pay equivalent to RPI as a minimum. We believe there are flaws in the Performance Management process, a view we know a majority of members share based on the pay survey results, and therefore the ratings are not reliable to make fair judgements on pay increases. The Company disagree.

They believe the Performance Rating and subsequent pay review process is robust and there are checks and balances within the process to ensure consistency and fairness exists and the appeal process also allows further opportunity to correct any errors.

They do, however, accept that the Performance Management process could be improved and further talks between the Company and Unite have been planned to look at this.

As well as agreeing to further talks on Performance Management we have also agreed to enter into talks on pay rises on promotion. We are concerned that the existing process is unclear and there are big inconsistences in the percentages individuals receive on promotion.

We want a process that is clear and sets minimum standards in terms of pay increases when promotion occurs and welcome the Company agreeing to meet and discuss how that can be achieved and what those guidelines should be.

Posted in Pay, Pru Section news | Comments Off on UKIO Pay Deal Agreed

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