On Wednesday 19 August we took the decision to end the collective consultation with trade unions over potential measures to reduce staff costs. For further details please read this email from Ian Wright, Interim Director of Human Resources.
As is the case for all universities, the Covid-19 pandemic has had a significant impact on both our current income and our financial forecasts for the next academic year.
We are taking a number of steps to protect and secure the future of the University. As part of this we have begun a collective consultation with our campus trade unions – UCU, UNISON, Unite and GMB.
The purpose of the consultation is to explore ways in which we could reduce our staff costs in the new financial year by making temporary changes to some of our terms and conditions of employment, if our financial position makes that necessary.
Collective consultation is a legal process that we must undertake if we are seeking to make collective changes to employment contracts, even on a temporary basis. Through a process of ongoing consultation and negotiation, we hope to be able to reach an agreement with campus trade unions on a package of measures we can take if our forecasts of significantly reduced income become a reality.
Friday 7 August 2020: Update on collective consultation
This Wednesday, 5 August, we held our second meeting with trade union colleagues and regional officers as part of our collective consultation process.
We were joined by Jo Jones, our Chief Financial Officer, who updated on the latest financial position and steps we have taken to date to reduce our costs in anticipation of a projected shortfall in income of £100 million this year. These steps include:
- Stripping back capital expenditure by around £30 million and an additional £10 million from planned property sales.
- Savings as a result of the Voluntary Severance Scheme of £12 million
- Non-staff savings included in departmental budget reductions of £17 million
Jo and colleagues in Finance have also been working hard to seek ways to enable us to access more of the government support available in the form of loans and grants without breaching some of our financial covenants linked to our historic borrowings. All of these actions are positive steps towards addressing the anticipated drop in our income. You can find more information about the financial position here.
This, combined with the ongoing work across the University to seek other cost reductions, means we are increasingly confident that if our student recruitment is better than, or as currently forecast, our financial position will be such that we will not need to make temporary changes to terms and conditions of employment.
However, the situation remains highly uncertain given the ongoing developments with the global pandemic and with a rapidly changing environment we need to prepare for a situation where our income is reduced by more than we are currently forecasting. If that is the case, we may need to take swift action to protect the University as a going concern. We therefore need to continue with the consultation process as a precautionary measure to ensure that the University is able to deploy measures if the financial situation demands it.
We are clear that:
- We want to consult with trade unions in a meaningful way, seeking their input to potential options and ideally to reach agreement on which actions we could take, and how, if the need were to arise.
- We would only implement any of the options available to reduce staff costs through changes to terms and conditions if our financial position dictates that it is necessary to do so.
- Any changes we did need to implement would be temporary - not permanent - and after a predetermined period of time terms and conditions would return to their current status.
- Although we have indicated that in the absence of an agreement, and if the financial situation required it, we would need to undergo a process of dismissal and re-engagement, we were again clear with our trade union colleagues that we would only do this if the financial position requires it.
In the meeting we presented some more detail of the options that we wish to explore with trade union colleagues which, with the agreement of the trade unions, would allow us to reduce costs if the financial position requires it.
Key options we outlined for discussion were:
Pay freeze for 2020-21
- As part of the national pay negotiations, the collective employers have indicated that in the current circumstances a zero per cent increase is the only outcome the sector can afford. This would still enable us to meet the statutory living wage rate
- This would reduce our forecast expenditure by £5.6 million
Pausing incremental pay progression
- This would affect 4,000 staff who are on grades 1-9 and not at the top of their grade
- It would not impact professors and professorial equivalent colleagues as their pay does not increase incrementally on an annual basis
- Noting the date of incremental pay progression of 1 January and the normal contractual expectation of progression through the pay points, we would only be able to do this by agreement with trade unions
- This would reduce forecast expenditure by £3.7 million
Cancelling/deferring promotions and other reward processes, including professorial and equivalent pay reviews, accelerated increments and the recognition scheme
- Collectively these would reduce our forecast expenditure by £1.6 million
- Taking this action would impact those deemed to be amongst our best performing staff
Reduction in pay
- This would only be as a last resort
- It would be applied on a temporary basis for the shortest possible time
- It would be applied progressively, with those earning the most seeing the greatest level of reduction and those in lower graded roles seeing little, if any impact
- The amount of savings would depend on the overall level of reduction applied
Further Voluntary Severance Scheme
We understand that trade union colleagues and indeed many of our staff will be concerned about the possibility of measures that will reduce their income. The steps we are taking now in consulting with trade unions over possible temporary changes to terms and conditions are very much precautionary and prudent given the levels of uncertainty over our student recruitment position and therefore University income. We very much hope we do not need to implement any of them. We are working extremely hard to find further cost savings elsewhere and to maximise our student recruitment position. We will only take steps such as these where our financial position requires us to do so and then only on a temporary basis.
We are aiming to meet with trade union colleagues regularly over the coming weeks and have offered to extend our consultation period to give us more time to seek agreement if possible and to better understand our student recruitment position.
It is important that our trade union colleagues can engage with their members and staff on these matters. If you wish to receive updates from our trade unions, contact details can be found via the links here.
I will continue to keep you informed of developments as we progress through the consultation.
Interim Director of Human Resources
|23 July 2020||
Thursday 23 July 2020: Update on collective consultation
Further to the Vice-Chancellor’s message on 9 July, I wanted to provide you with an update on the collective consultation process with the trade unions.
Since lockdown began in March, we have been meeting with local trade union colleagues at least weekly, maintaining a constructive dialogue over our response to the pandemic and issues arising. On 15 July, we held our first formal collective consultation meeting with local trade union representatives and their regional officers over potential ways to reduce our staff costs.
This was an opportunity to set the context and background to our current position and further outline the impact that we anticipate for the next financial year. At the meeting we outlined the steps we have already taken to reduce costs, including reducing our capital expenditure by approximately £30 million, delivering £12 million of staff savings via the voluntary severance scheme and our plans to reduce other non-staff expenditure by £17 million.
The collective consultation is set to cover potential temporary changes to our terms and conditions of employment, which we may need to make in order to reduce our overall staff costs in the next financial year, if our financial position determines that such action is required. We are seeking agreement with the trade unions to enable us to implement some or all of the proposed changes if our financial position dictates. Whilst we hope that it will not be necessary to do any of the things we will be talking to the trade unions about, we need to start the consultation process now to enable us to implement the changes should they become necessary.
We are entering into this consultation with a view to reaching agreement, however we understand that the proposals being put forward are ones on which agreement with our recognised trade unions may not be possible. If we are unable to reach agreement with the trade unions and our financial position requires it, the University would need to consider other options to reduce staff costs, including potentially taking steps to unilaterally implement temporary changes to our terms and conditions of employment to help reduce the need for compulsory redundancies. We believe it is important that we are open and transparent about this with staff and our trade unions.
Our emphasis however is on the potential for this to be deployed - it is not something we wish to do and will try to avoid doing so if we can. If we find that our student recruitment numbers are better than we forecast and that our financial position is commensurately improved, it may be that the steps we have taken already, focusing on reducing non-staff expenditure by c£47 million (c£30 million reduction in capital expenditure and a target of c£17 million in other non-staff costs) plus the c£12m reduction in staffing costs in 2020-21 as a result of our voluntary severance scheme may prove sufficient to address a shortfall in income. We must however be prudent and prepare for the possibility of taking these kinds of steps to reduce our staff costs further and being mindful of the necessary notice we would need to give staff to implement the changes.
During the first meeting, trade union colleagues asked that we conclude the meeting early to enable us to more thoroughly explore and explain our plans to meaningfully consult with them, whilst working remotely, before engaging in further talks about possible options. On behalf of the joint trade unions, UNISON outlined their concerns in a letter to us on 17 July. We have responded to their points, outlining our consultation plans in more detail and ways we can support them to engage with staff during the consultation process. We agreed to continue a dialogue in the coming days and will look to reconvene again in a couple of weeks to continue discussions around the proposals with a view to seeking agreement.
In addition to this, we continue to meet regularly with the local representatives to discuss our broader response to the Covid-19 pandemic, including our plans to return to on-campus activity and health and safety matters.
I will keep you updated as we continue our talks. In the meantime, please also refer to the FAQs below for further information.
Correspondence with trade unions
Frequently asked questions
|The University has recently announced a collective consultation, what does this mean?||
A process of collective consultation has commenced with our campus trade unions – UCU, UNISON, Unite and GMB. Collective consultation is a legal process that we must undertake if we are seeking to make collective changes to employment contracts, even on a temporary basis. Through a process of ongoing consultation and dialogue, we hope to be able to reach an agreement with campus trade unions on a package of measures we can take if our forecasts of significantly reduced income determine that it is necessary to do so.
The purpose of the consultation is to explore ways in which we could reduce our staff costs in the new financial year by making temporary changes to some of our terms and conditions of employment, if our financial position makes that necessary. It does not means these changes will definitely happen.
|Why do we need to start consultation now?||
The financial impact of a potential reduction in income will hit the University in the next financial year (1 August 2020 – 31 July 2021). Consultation takes time and if we wait until we know exactly what our financial position is before starting consultation, then we will leave ourselves too little time to make any necessary savings in the new financial year if our situation dictates they are necessary. At the moment we have forecast a large drop in income. By starting now we can explore a range of options that could be used if our financial forecasts become reality and be deployed in a timeframe that delivers savings in the financial year.
We have also reduced non-staff expenditure and taken other steps, inlcuding a voluntary severance scheme, to reduce costs.
|How do staff who aren’t in a trade union input into the consultation process?||
The campus trade unions will represent their members and all other non-members in the staff groups they represent. We will, however, explore ways in which we can canvass the views of all staff on the measures we are exploring so that they can be fed into the consultation process.
|How will the University ensure any cost reduction measures are applied fairly?||
All actions will go through a detailed equality impact assessment to ensure that no staff groups are disproportionately negatively affected, be this on the basis of protected characteristics, contract type, working pattern or other factors.
In consultation with the trade unions, we will also carefully consider the impact of the proposed measures on lower paid staff in particular.
|Are compulsory redundancies being considered as part of the consultation?||
The consultation is focussed solely on other cost reduction measures and we will not be making proposals to the campus trade unions regarding compulsory redundancies as part of this process. However, some changes to services might be necessary, even without the impact of Covid-19, which could result in some redundancies. Equally, if we cannot make sufficient savings through non-staff expenditure cuts, voluntary measures and the cost reduction measures discussed through this consultation, then we may need to explore compulsory redundancies as a last resort. If in future it becomes clear that compulsory redundancies are required, either as a means of achieving the necessary financial savings, or because of a strategic review, we will begin a new and separate process of consultation with the trade unions and impacted staff.
|What happens if the trade unions don’t agree following consultation?||
The University and the trade unions have been working closely throughout the Covid-19 pandemic, however we recognise that some of the proposals are challenging and it may be difficult to secure agreement. If the changes the University considers necessary cannot be agreed via consultation, we may need to make relevant changes to contracts by giving contractual notice to bring employment on the current terms and conditions to an end. This would be done by offering continued employment on new contracts that contain the temporary changes to terms and conditions. This will not affect continuity of service, and all other terms and conditions will remain the same. This is a legal process, known as dismissal and re-engagement.
|How long does the consultation period last?||
The formal consultation period will last for 90 days. The consultation progress and outcomes will be shared with the University Executive Board to inform any decisions it takes regarding cost reduction measures. Our aim is to ensure that we have an agreed set of measures that could be implemented if it becomes clear that the financial position requires it, namely when we have clarity on the student recruitment position.
The initial phase of consultation will formally conclude in the timeframe above. However, we will continue an open and constructive dialogue with all recognised trade unions throughout the 2020–21 academic year as we seek to find the best way to protect the future of the University, whilst mitigating the impact on our staff and students.
|I have heard the term 'dismissal and re-engagement' mentioned, what does this mean?||
The University is currently undertaking a collective consultation process with a view to reaching agreement with the trade unions over potential temporary changes to our terms and conditions of employment. If we are unable to reach agreement, we may need to start a process called “dismissal and re-engagement”. This means that we would give notice to terminate everyone’s current contracts of employment and immediately offer continued employment on slightly different terms and conditions, which would incorporate some temporary changes, for example to pay levels or regarding incremental pay progression. This does not mean reapplying for your current role, nor would anyone’s post be redundant, it is simply a legal process to allow for a change in contract, where we can’t do this in agreement with the trade unions.