Public and Commercial Services Union

The DWP trade union offer letter 2007-2009

Contents

1. Coverage and settlement dates
2. Eligibility for pay award
3. Review arrangements
4. Cost of the offer
5. Key details
6. Changes to pay scale maxima
7. Changes to pay scale minima
8. Salary progression
9. Part-time employees
10. Non-consolidated top-up payment
11. Individual performance bonuses
12. Individual performance bonus amounts
13. Bands F and G/grade 7 and 6 discretionary bonuses
14. Team bonuses
15. Unsatisfactory performers
16. Mark time pay
17. Anomalous pay scales
18. Cleaners
19. Specialist pay arrangements
20. Movement into the senior civil service (SCS)
21. New entrants on or after 1 July (in each year of the pay award)
22. Transfers/loans into DWP (in each year of the pay award)
23. Unpaid non-attendance
24. Allowances
25. Changes to allowances
26. Standby addition
27. On-call addition
28. Local pay additions (LPA) RRA
29. Excess fares allowance - increase in excess of the annual uplift
30. Miscellaneous changes
Appendices

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1. Coverage and settlement dates

1.1 This is a three-year pay offer, which covers the settlement dates of 1 July 2007, 1 July 2008 and 1 July 2009. Throughout this letter the three years will be referred to as year 1, year 2 and year 3 respectively.

2. Eligibility for pay award

2.1 Entitlement to each individual year of the pay award will be dependent upon two things. Firstly, an individual must be employed by the Department for Work and Pensions¹ on both 30 June and 1 July of that year; and secondly, they must not have been marked unsatisfactory for the previous performance year.

3. Review arrangements

3.1 Although this is a three-year offer we will still meet every year to discuss any issues which have arisen in the year and any other areas of mutual interest.

3.2 Each year management and the unions will jointly review the commitments made for the relevant year of the three-year agreement and consider whether or not any significant external factors should cause the agreement to be reviewed.

4. Cost of the offer

4.1 The value of the offer is:

• £97.3m in year 1
• £116.5m in year 2; and
• £124.1m in year 3.

4.2 This includes non-consolidated top-up payments of:

• £51.8k in year 1²;
• £15.8m in year 2; and
• £19.8m in year 3.

4.3 In addition there are also non-consolidated individual performance bonuses worth:

• £34.9m in year 1
• £20.8m in year 2; and
• £18.2m in year 3.

4.4 In total the offer provides 3.6% in new money each year and a further 1.4% per year in non-consolidated payments.

5. Key details

5.1 Effective from 1 July 2007:

• Increases to pay scale minima ranging from 1% to 4%
• All pay scale maxima increased by 2%.
• Cash progression payments.
• Lump sum top-up payments worth up to 2% for employees who are on personal pay points above the pay scale maximum.
• Individual performance bonuses worth £34.9m, which will provide lump sums to the majority of employees.
• Increases to some allowances of approximately 2%.

5.2 Effective from 1 July 2008:

• Increases to pay scale minima ranging from 0% to 5%
• All pay scale maxima frozen at 2007 rates;
• Cash progression payments.
• Lump sum top-up payments worth up to 2% for employees who are on, above or close to the pay scale maximum.
• Individual performance bonuses worth £20.8m, which will provide lump sums to the majority of employees.
• Increases to some allowances of approximately 2%.

5.3 Effective from 1 July 2009:

• Increases to pay scale minima ranging from 1% to 4%
• All pay scale maxima increased by 1%.
• Cash progression payments.
• Lump sum top-up payments worth up to 3% for employees who are on, above or close to the pay scale maximum.
• Individual performance bonuses worth £18.2m, which will provide lump sums to the majority of employees.
• Increases to some allowances of approximately 2%.

6. Changes to pay scale maxima

6.1 All pay scale maxima will be increased by a total of 3% over the three years of the offer. There will be a 2% increase in year 1, no increase in year 2 and a 1% increase in year 3. All increases will be rounded up to the nearest £10. Please refer to paragraph 9 - part time employees.

6.2 The proposed pay scale maxima for each of the 3 years are shown in Appendix 1.

7. Changes to pay scale minima

We intend to build on progress made in recent years and continue to reduce the length of some of the pay scales. Our aspiration is to reduce the length of the pay scales so that they are roughly in line with the percentages shown below:

Reduction in length of pay scales

Pay Band/Grade	Length*
Band A/AA	10%
Band B/AO	15%
Band C/EO	20%
Band D/HEO	20%
Band E/SEO	20%
Band F/Grade 7	20 - 25%
Band G/Grade 6	20 - 25%

* The % length of the pay scale is calculated by dividing the span by the minima.

7.1 In order to achieve our aim we intend to increase pay scale minima by differing amounts over the 3 years. We need to significantly shorten the length of some pay scales, for example, at band C/EO and band F/grade 7. These minima will increase by up to 5% in any one year, a greater percentage increase than the maxima, enabling us to shorten the scales. For others, such as bands D/HEO and E/SEO where the length of the pay scale is already in line with our target, the change in the minima will generally mirror the change in the maxima.

7.2 All increases will be rounded up to the nearest £10. Please refer to paragraph 9 - part time employees.

7.3 All of the proposed pay scale minima for each of the 3 years are shown in Appendix 1.

7.4 Any employee who, following the implementation of the pay award, is below their new scale minimum (in each year of the award), will automatically be uplifted to the new minimum unless specifically excluded (see paragraph 15 - unsatisfactory performers).

8. Salary progression

8.1 A key priority for this pay award is to make substantial progress in moving existing employees up the pay scales. This is in line with our reward strategy, which recognises the value to the department of the skills and experience employees gain as they become more capable and competent. In order to achieve this we intend to award consolidated salary increases based on the length of the pay scale. This method ensures that those on longer pay scales get similar relative progression to those on shorter pay scales although some additional money has been targeted at the lowest paid employees (band A/grade AA and some support grades) in order to provide them with faster pay progression

8.2 All employees will receive the consolidated salary increase that is appropriate to their pay band/grade at 30 June in each pay year, unless stated otherwise.

8.3 Progression payments will be capped at the appropriate pay scale maximum. Any remaining balance will not be payable but some employees will receive a non-consolidated top-up (see paragraph 10 - non-consolidated top-up payment).

8.4 Please refer to Appendix 1 for a full breakdown of progression payments by band/grade and pay zone.

9. Part-time employees

9.1 Where an employee works less than full time conditioned hours their increased pay will be adjusted to reflect the hours that they are contracted to work. The pay award will first be applied to the equivalent full time salary and then the new rate of pay will be pro-rated to account for the average number of weekly hours the employee is contracted to work.

10. Non-consolidated top-up payment

10.1 We recognise that this offer will result in some experienced employees that are at or near their pay scale maximum, receiving relatively low or no consolidated pay increases. In view of that we are intending to use money from the bonus 'pot' to offer non-consolidated top-up payments.

10.2 The non-consolidated top-up payments will ensure that all employees receive a minimum guaranteed percentage payment each year. This will be achieved by comparing their consolidated pay increase to a percentage of their previous year's pay scale maximum. If the consolidated increase is less, then the balance will be made up by a non-consolidated top-up payment. This payment will be rounded to the nearest pound and will be non-pensionable and non-superannuable. This calculation will also apply to people who are on a personal pay point above their pay scale maximum. The payment will be pro-rated for employees with part time and/or part year working patterns.

10.3 In year 1 the non-consolidated top-up will be set at 2%. This means that because the pay scale maxima are also increasing by 2% very few employees will receive the non-consolidated top-up payment. Those who are currently above the pay scale maximum will be the main group to benefit from this in year 1.

10.4 In year 2 the non-consolidated top-up will again be set at 2%. As the pay scale maxima are not increasing in 2008 employees who are at or near their pay scale maximum are likely to receive a non-consolidated top-up payment, as well as those already above the maximum.

10.5 In year 3 the non-consolidated top-up will be set at 3%. This is likely to impact on employees who are at, near or above their pay scale maximum at 30 June 2009, as all pay scale maxima will be increased by 1%.

10.6 Taking into account the net effect of increases to the maxima, the non-consolidated top-up will ensure that employees on their pay band maximum will get 2% new money in years 1 and 2 and further 1% in year 3.

11. Individual performance bonuses

11.1 Employees will receive an individual performance bonus in recognition of their individual contribution if they attain a 'top', 'higher' or 'majority' rating under the Performance and Development System (PDS) and are entitled to the pay award in the relevant year.

11.2 Employees that do not have a performance level may be eligible for an individual performance bonus if:

• the reason is due to maternity, paternity, adoption or disability related sickness absence in which case the individual performance bonus will be based on the most recent previous year's marking;
• they transferred to DWP from an OGD (or returned from loan) during the reporting year ending 31 March and qualify for the DWP pay award but who are not entitled to a DWP performance assessment. The individual performance bonus payable will be equivalent to that which they would have received from the exporting OGD in accordance with the OGD's individual performance bonus eligibility rules;
• no performance rating is due because of the employees surplus status but the employee has more than 60 days service during the relevant performance year. In this instance the bonus will based on the most recent previous year's marking.

11.3 Graduate fast streamers who are assessed against band E/SEO competencies from the third year of the programme will receive the individual performance bonus appropriate for band E/SEO.

11.4 Individual performance bonuses will be:

• determined on the basis of the performance rating achieved for the relevant performance year (for example, individual performance bonuses payable for July 2007 will be based on the PDS level for 2006/07);
• paid at the level appropriate to the band/grade in which the employee has been assessed, unless otherwise stated (i.e. TDA to SCS)(see paragraph 20 - movement into the senior civil service);
• paid as a non-consolidated, non-pensionable, non-superannuable lump sum; and
• subject to tax and National Insurance.

11.5 In the following circumstances the individual performance bonus will be pro-rated to reflect the actual period of service in the relevant year:

• where the employee is a new entrant with no previous service within the reporting period but has a qualifying performance level,
• where there has been any break in employment, other than a weekend and/or public/privilege holiday. For year 1 the individual performance bonus will be paid on a pro-rata basis from the first day of the latest period of employment. For subsequent pay awards i.e. from year 2 onwards, the individual performance bonus will be calculated on a pro-rata basis to reflect the total number of days in service during the reporting period.

11.6 The individual performance bonus will be paid in full and not pro-rated for part-time and part year employees in year 1. For subsequent pay awards, starting with year 2, it will be pro-rated on the basis of the average weekly hours worked during the pay year (i.e. 1 July to 30 June).

12. Individual performance bonus amounts

12.1 The individual performance bonus values for year 1 are shown in the table below.

12.2 The individual performance bonus values for years 2 and 3 are "indicative" at this stage and the final values will need to be determined when the out-turn for PDS markings for the years 2007/08 and 2008/09 is known. This may result in a minor change in the published indicative values to ensure that the bonus 'pot' is neither under or overspent. We expect that any change would be minor.

Year 1 - 2007

Year 1 individual performance bonus amounts

Band/grade	Top	Higher	Majority
Band A/AA	£340	£225	£115
Band B/AO	£405	£270	£135
Band C/EO	£590	£395	£200
Band D/HEO	£790	£525	£265
Band E/SEO	£985	£660	£330
Band F/Grade 7	£1,400	£935	£470
Band G/Grade 6	£1,785	£1,190	£595

Year 2 - 2008

Year 2 individual performance bonus amounts

Band/grade	Top	Higher	Majority
Band A/AA	£195	£145	£100
Band B/AO	£235	£175	£120
Band C/EO	£335	£250	£170
Band D/HEO	£420	£315	£210
Band E/SEO	£515	£390	£260
Band F/Grade 7	£730	£550	£365
Band G/Grade 6	£935	£705	£470

Year 3 - 2009

Year 3 individual performance bonus amounts

Band/grade	Top	Higher	Majority
Band A/AA	£135	£125	£110
Band B/AO	£165	£150	£130
Band C/EO	£230	£210	£18
Band D/HEO	£290	£260	£265
Band E/SEO	£360	£325	£330
Band F/Grade 7	£505	£455	£470
Band G/Grade 6	£650	£585	£595

13. Bands F and G/grades 6 and 7 discretionary bonuses

13.1 The discretionary bonus arrangements that operated for Bands F & G / Grades 7 & 6 in 2004/05 and 2005/06 will be suspended for the duration of the three year pay deal. Instead, the bonus arrangements described at paragraphs 11 to 12 will apply and bonus values will be as indicated in the tables above.

14. Team bonuses

14.1 Businesses will retain the flexibility, agreed as part of the pay 2002 settlement, to run team bonus schemes if they choose. Where businesses do wish to run a team bonus scheme this will be handled in line with the agreed procedures regarding consultation with trade unions.

14.2 No additional funding will be available for this purpose so, for employees included in a team bonus scheme, the individual bonus values shown in the offer will be reduced so that the overall bonus 'pot' available within that business remains the same.

14.3 This means that it is possible for an individual employee to be in both the individual and team bonus schemes in the same performance year. Businesses will be responsible for communicating these changes to their own employees.

14.4 Unless stated otherwise in this offer letter, this will not affect the bonus values shown for 2007 because money has already been set aside for team bonus schemes that ran in 2006/7. Employees will need to be aware of this possibility though in future years when referring to the tables above.

15. Unsatisfactory performers

15.1 Employees who are marked unsatisfactory for the relevant performance year (i.e. the performance year that immediately precedes the settlement date) are not eligible for that year's pay award. Their salary will remain at the existing level even if this means that they remain below the new pay scale minimum. Checks will be put in place to ensure that they do not fall below national minimum wage although we do not envisage that this situation is likely to arise.

15.2 Should an employee's performance subsequently improve then they will become eligible for the following year's pay award, providing the unsatisfactory marking has been removed and they receive a performance rating through PDS. Where an employee's salary is below the previous years scale minimum, it will first be rolled up to the scale minimum that applies at 30 June and then the progression payment applicable at 1 July will be applied.

16. Mark time pay

16.1 The consolidated pay increase will erode any mark time pay in place from 1 July in each year. Mark time pay will not be eroded by non-consolidated lump sum payments such as bonuses or top-up payments.

17. Anomalous pay scales

17.1 Some employees from the former HEO accountancy, SEO accountancy passed finalist and risk consultant pay bands/grades have reserved rights to a frozen maximum that remains above the DWP maximum for the band/grade. These reserved rights are shown in the table below:

 

Frozen maximum for anomalous pay scales

Band/grade	Frozen maximum
Band D/HEO accountant (London outer)	£33,300
Band D/HEO accountant (London inner)	£34,330
Band E/SEO accountant passed finalist (national)	£37,070
Band E/SEO accountant passed finalist (SPLZ)	£39,570
Band E/SEO accountant passed finalist (London outer)	£39,990
Band E/SEO accountant passed finalist (London inner)	£41,040
Band E/SEO risk consultant (national)	£37,040
Band E/SEO risk consultant (London outer)	£39,880
Band E/SEO risk consultant (London inner)	£41,020

 

17.2. Employees with reserved rights to the above pay scales will retain the right to progress to the frozen maximum of that scale until such a time as the DWP maximum exceeds the frozen maximum. All payments up to the level of the frozen maximum will be made as a consolidated award.

17.3. Progression for this group will be subject to the same principles outlined for the non-consolidated top-up payments. The non-consolidated top-up will be based on the relevant 'frozen maximum'.

17.4 All other reserved rights pay scales have either been overtaken by the equivalent DWP generalist maximum or they will be overtaken in the first year of this three year award (see Appendix 2 - reserved rights to anomalous pay scales).

18. Cleaners

18.1 From 1 July 2007, the six cleaner bands/grades that currently exist will be rationalised into two:

• "Cleaner" and "cleaner 10 years" bands/grades will be merged;
• "Senior cleaner" and "senior cleaner 5 years" bands/grades will be merged; and
• The 2 'special duties cleaner' bands/grades will be abolished.

18.2 The new bands/grades will be known as "cleaner" and "senior cleaner".

18.3 Where 2 bands/grades are merged, any employees who are currently paid on the lower of the two bands/grades will be uplifted to the higher rate. The spot rates will then be uplifted by 2% per annum for each year of the award.

19. Specialist pay arrangements

19.1 Specialist pay scale minima and maxima that are currently below the generalist equivalent will be increased so that the minima and maxima match those of the generalist pay scale. For exceptions and details of pay bands/grades that are to be created, aligned or abolished please refer to Appendix 3 - pay arrangements for specialist pay bands/grades.

20. Movement in to the senior civil service (SCS)

20.1 Employees who permanently change band/grade into the SCS during the reporting year ending 31 March are covered by the SCS award. The DWP junior pay award does not apply.

20.2 Employees who permanently move into the SCS after 31 March but before 1 July will be paid an individual performance bonus by the SCS relating to the performance marking earned in the band/grade in which the employee has been assessed.

20.3 Employees on TDA to the SCS for less than six months of the performance year will be assessed in the substantive band/grade. Employees on TDA to the SCS for the majority of the year (more than 183 days) will be assessed in line with SCS pay and performance arrangements, unless they are no longer on TDA/TP on 31 March. In this case employees will be assessed in the substantive band/grade. Bonus payments relate to the level of assessment and band/grade employees are assessed in.

21. New entrants on or after 1 July (in each year of the pay award)

21.1 These employees will not be eligible for the pay award, except that any individuals who are on the previous year's scale minimum (i.e. because the pay award had not yet been implemented when they started) will be uplifted to the new scale minimum.

21.2 Any individuals employed on flexible starting pay who take up post before the pay award is implemented will see no change in salary if their pay is higher than the new scale minimum. The only exception is if their contract specifies a particular point on the pay scale and pay has to be adjusted to preserve that.

22. Transfers/loans into DWP (in each year of the pay award)

22.1 Any employee who transfers either permanently or on loan, into DWP on or after 2 April from another government department, will not have automatic entitlement to the DWP pay increase from 1 July.

22.2 In these circumstances, DWP payroll will contact the previous department to establish if the employee is entitled to the DWP pay award or the exporting department's pay award.

22.3 The pay award will be calculated and implemented separately from the main pay award but will be effective from 1 July.

23. Unpaid non-attendance

23.1 Employees that are on carers leave, long-term sick absence, unauthorised absence or special leave without pay including maternity, paternity and adoption leave on 1 July in each pay year, will qualify for the pay award subject to their having a satisfactory performance level. Employees marked unsatisfactory will remain on the salary they received at the time the absence began.

23.2 Employees will be progressed through the pay award to the point on their pay scale as if they had remained at work, but will receive no actual payment.

23.3 The only payment that will be received when the pay award is implemented, is for those employees who are entitled to the non-consolidated top up, providing that they have some paid service during the period 1 July to 30 June in the relevant year.

24. Allowances

24.1 The following allowances/additions will be increased by approximately 2% in each year of the pay award:

• On-call addition
• Private secretary allowance
• Procurement allowance - associate membership and full membership levels.

24.2 There will be no change to the rate at which other allowances are paid although those that are paid as a percentage of salary or an hourly rate will automatically increase as a result of any increase in salary.

24.3 The allowance rates for each year are shown at Appendix 4.

25. Changes to allowances

25.1 Procurement Allowance: The Chartered Institute of Purchasing and Supply (CIPS) have recently introduced changes to their qualification structure. To reflect the new structure an additional level of procurement allowance will be introduced to reward completion of diploma membership. This will be the first level of procurement allowance after which employees will still be able to work towards associate membership and then full membership.

25.2 The allowance for diploma membership will be introduced from 1 July 2007. It will be set at an annual rate of £1,000 per year and paid monthly with salary. The diploma membership level of procurement allowance will be uplifted by approximately 2% in years 2 and 3 of the award.

26. Standby addition

26.1 Standby addition will be abolished from the date of implementation of the pay award. In future, any employee who is expected to remain on site but who is not working and fulfils the eligibility criteria may be able to claim on-call addition.

27. On-call addition

27.1 The eligibility criteria to on-call addition (see Appendix 5) will be amended to enable employees to claim where there they are expected to remain on site but who are not working.

28. Local pay additions (LPA) RRA

28.1 As part of the 2004-06 pay deal, the following additions and allowances were converted into location based RRAs:

• All types of local pay addition,
• London weighting bulk transfer cash allowance; and
• London discretionary cash allowance.

28.2 These RRAs will continue to be paid at existing rates without the need for an annually renewable business case until 30 June 2010, (providing the employees circumstances do not change under the terms of the RRA policy) at which time they will be consolidated in full into salary and the RRAs will cease. Where the consolidated increase takes an employee above their pay scale maximum, the employee will be placed on a personal pay point above the maximum and mark time pay arrangements will apply.

29. Excess fares allowance - increase in excess of the annual uplift

29.1 In future the department will continue to conduct an annual review to decide whether or not excess fares allowance claims should be uplifted to reflect changes in travel costs. Employees will not be entitled to claim a higher increase in the rate of the allowance on the basis that their own costs have increased by more than the standard increase that is implemented for all DWP employees. This change will be effective from the implementation date of the 2007 pay award.

30. Miscellaneous changes

30.1 Long Service Award

30.2 The cash provision of the long service award will be increased by £100 from the date of implementation of the pay award. From this date, any employee with 25 years service, who has not already taken the award between 1 July 2007 and the pay award implementation date, will receive an award of either:

• A week's additional special leave or;
• A non-taxable non-pensionable, non-superannuable cash sum of £250.

30.3 Temporary promotion (TP) compensation payment

30.4 Reserved rights to TP were abolished from 1 September 2005. Since this date, employees fulfilling the eligibility criteria have been able to claim a one off lump sum as compensation. Entitlement to claim this compensation payment will cease from 30 June 2008. This means that the 3 month qualification period must have been satisfied no later than 30 June 2008. However, once the qualification period has been satisfied, employees will have a further three months until the 30 September 2008 to make their claims.

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[¹] References to the need to be employed by DWP should be taken to mean employed by DWP within the DWP bargaining group. The DWP bargaining group means the administrative group that incorporates band A/grade AA (and equivalents) through to band G/grade 6 (and equivalents), including employees on temporary or fixed term contracts. Although part of the DWP bargaining group, separate arrangements will apply to employees who are not currently employed on DWP terms and conditions.

[²] The top-up payments in year 1 are negligible because pay scale maxima are increasing by 2%. This means that the main group to benefit are those on mark time pay above their maximum.