HMRC launches divisive pay and contract offer with PCS leadership backing

Updated: Mar 4

HMRC has now published to its staff the offer it has negotiated with the unions on pay and contract reform. Only a narrow majority of PCS’s Group Executive Committee voted to recommend an offer which seems calculated to divide the workforce.

This offer is the product of six months of secret negotiations. Even the GEC, supposedly the governing body for the union in HMRC, has been kept in the dark for most of that time. Although finally clued in during December, lots of pieces of information have been drip fed and the decision to recommend the offer (which only passed by 14 to 11) was made less than 24 hours after receiving several hundred pages of documentation, and with some of the implications of those documents only becoming clear during the meeting where the decision was taken.

After such a slow, secretive process, HMRC now says the deal needs to be accepted and signed in the next two months, or it’s off the table and a pay freeze follows. Rather than challenge this, or the employer’s reticence to let the GEC see everything in a timely fashion so it could make an informed decision, the negotiators and the Group Secretary used the same naked threat to bludgeon the GEC into recommending what’s on the table.

So, what is on the table?

As with all divisive offers, there are winners as well as losers in this package. It’s worth saying that the money on the table is an improvement on a decade of pay restraint, and for some members it’s not just that their terms and conditions won’t get any worse – they will actually improve. If anything these positives, and knowing HMRC can deliver them when it has a mind to, only makes the negatives stand much starker in contrast.

The pay rise over three years is 13%. This is made up of a backdated 3% for 2020/21, and 5% each for 2021/22 and 2022/23. The bulk of the money is aimed at the lower grades, so that whilst everyone sees significant pay rises overall, grades AA-O see the most. AA and AO staff will be consolidated into one grade by the end of the process, on a spot rate that is slightly above the existing AO maximum. In addition, the full time working week will now be calculated as 37 rather than 42 (37 plus five paid lunch hours), meaning that the hourly rate for part time workers increases.

All HMRC staff will now gain a contractual right to flexible working hours that they didn’t previously have. A working from home policy is being introduced that gives all staff the right to work from home for two days a week “where their role is suitable and personal circumstances allow.” (That fine print will be important later.) Annual leave is now capped at 30 days, with those who have more than that losing the excess entitlement, but it now takes half the time from joining the department to reach the full 30 days.

If I was to stop here, this might seem like a good deal, right?

Unfortunately, there is no new funding for this deal – it’s all recycled from existing HMRC budgets – and it doesn’t take an accounting genius to work out that the above changes don’t come anywhere near funding a 13% pay rise.

Alternative working patterns

Currently, workers can apply for Alternative Working Patterns. This includes things such as condensing the working week (working the same hours over fewer days) or part year working, often referred to as term-time working. These patterns benefit parents and carers in particular, but there are a whole variety of workers who use and benefit from them.

HMRC’s offer includes two clauses which attack those on AWPs. First, every single worker with an AWP will have to re-apply for it, and second, each AWP will expire after five years. Workers can then "apply to extend the arrangement for a further period not exceeding five years." Leaving aside how hard it is already to get an AWP in certain parts of HMRC, and how frequently they come under attack, this is a clearly discriminatory policy which will hurt those unable to do traditional working patterns and hours.

Annual Leave reductions

The cap on annual leave of 30 days means that everyone with additional leave, previously converted from privilege days, will lose time off. On its own, and balanced against the positives listed above, this may not seem like much. As part of a wider package of detriments, it is significant – not least for those who have resisted promotions for many years to retain benefits such as their additional leave days.

Workers in Scotland lose more annual leave than the rest of the UK, in the form of two public holidays converted into annual leave. Nowhere else is being asked to lose public holidays so overtly, and the UK already has the least number of these in all of Europe.

The Working Week in London

For workers in London, the working week will increase by one hour from 36 to 37. That may not seem like a lot, and it’s in line with everyone else, but there was a reason why the working week in London was an hour shorter. Many London workers spend far more time travelling across the city to and from work than the rest of us do, meaning that this isn’t just an increase of 52 hours per year but potentially of hundreds of hours.

Reasonable Daily Travel

With the Building Our Future Locations programme over the past five years, many of us are far more familiar with the concept of Reasonable Daily Travel than we might otherwise be. It set a limit of an hour for the time it should take you to reach your new office for it to be considered reasonable, which has proved crucial for those with caring responsibilities, mobility issues, transport limitations and more not being forced to make unreasonable moves.

HMRC is proposing to scrap the concept of RDT. It says that this will allow a more rounded conception of reasonableness, including considering personal circumstances more fully and allowing up to full time home working as ways for people to stay in employment with HMRC. Except that these things are already considered, thanks to representation by PCS representatives, and the law requires the employer to consider what is reasonable in all the circumstances.

HMRC here is therefore presenting the status quo as a positive change, whilst implementing a change which potentially allows them to make people move to a location more than an hour away without RDT getting in the way.

Overtime and unsocial working

Those who work overtime or weekends currently get extra remuneration for doing so. This is now going, to be replaced with a flexi credit. If you don’t do overtime or work weekends (we’ll get to that!) then you might not be bothered. Except that you may not be aware that a clause in our contracts already allows HMRC to compel staff to work overtime where there is a clear business need. This doesn’t happen in most areas, because of the volume of voluntary overtime undertaken. If that changes, this clause remains – and now HMRC don’t even have to pay you extra if they invoke it.

The sacrificial lambs: Customer Service Group

After all of that, we get to the biggest and most detrimental area of this offer – what happens to workers in Customer Services Group, in particular the lower grades doing operational work including telephony. If this offer passes, every worker in CSG will have to work up to one evening per week and six Saturdays per year.

For some, this will be less than they do currently, and they will benefit from otherwise gaining flexi that they didn’t have before.

However, about half of CSG are on traditional contracts. That means they already have full flexi without core times and are having to work evenings and weekends where they previously didn’t. They won’t get paid extra for the Saturdays they now have to work, if they do regular overtime they will lose that money as well, and by virtue of their contract they will be losing annual leave, and if they work in London their working week will increase too.

Many of those workers will be on AWPs which, due to the attitude of CSG management, they will invariably have had to fight tooth and nail for with union support. Their management will now be rubbing its hands with glee at the opportunity arising in this area.

One of the supposed sweeteners for extra unsocial working is the ability to do this from home. However, as we stated above, the clear caveat is “where their role is suitable and personal circumstances allow.” Reps in CSG are already, in the midst of a global pandemic, having to challenge managers who attempt to force their staff to attend the workplace because they can’t do telephony at home. Without the cover of the pandemic, that fight will become harder.

Those who can do telephony in the workplace but cannot do it at home include those with caring responsibilities or home arrangements which make talking about taxpayer’s details without breaching data security impossible and disabled workers without the room at home for the adjustments that they need to safely take phone calls. It is already clear that these workers will face incredible difficulties in trying to make what is a detriment in any case just a little bit less detrimental.

And if that wasn’t enough, the revelation dropped on the GEC at the meeting where it had to decide its attitude to this offer was that if it is accepted, we lose the MIS Agreement. The assurance we have in its place is that the status quo will persist until June, during which time the department will discuss arrangements, but frankly this doesn’t guarantee anything.

The MIS Agreement is the only reason that management in CSG is not running around the office with walkie talkies, chasing workers who’ve spent too long in the wrong code or (God forbid) on the toilet. This was the literal reality of the Contact Centre prior to the agreement in 2009, and even now the strength of the union branch is the main guarantee against managers monitoring what code an advisor is in and finding unique ways to harass them if they’re perceived to not be working hard enough.

All of this makes this an even harder deal for disabled workers, carers, single parents and others in CSG in particular. They’ll benefit from the pay rise, sure, but when they weigh it up for many that won’t be anywhere near enough to address these detriments.

What next?

Despite what good there is in this offer, there are too many losers and the detriment they suffer is too acute. We need to reject the deal as it stands.

If we do, the bosses and the union leadership tell us that’s all there is and we’re stuck with low pay and a further pay freeze. That doesn’t have to be the case. We know HMRC can vastly improve the terms and conditions of the many when it has the will, and we need to signal that we want those improvements – without putting low paid, low grade CSG staff, disabled workers, carers and parents at further detriment.

An injury to one is an injury to all isn’t just a pretty slogan. It’s a core principle of trade unionism and socialism. The only way to put it into practice is to reject the deal as it stands, and demand a fight for everything that’s good without a detrimental trade off.

We might not win these things if we fight. We definitely won’t win them if we don’t.

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