John Smith - TSSA

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Dec 22, 2014 - December 2014. Our reference: ER/SB/821/14. Dear Matt,. 2015 Pay Negotiations, Operations and Maintenance
Matt Barrow Regional Organiser Transport Salaried Staffs’ Associations Walkden House 10 Melton Street London NW1 2EJ 22nd December 2014

The Quadrant:MK Elder Gate Milton Keynes MK9 1EN

Our reference: ER/SB/821/14

Dear Matt, 2015 Pay Negotiations, Operations and Maintenance General Collective Bargaining Groups On 17th December we met again as part of the pay negotiations for 2015 in two separate meetings covering both the Maintenance and Operations general collective bargaining groups. As you know these negotiations are taking place in the context of the very challenging environment of CP5 in which we are operating and at a time when we need to drive much greater levels of safety, train performance and efficiency. Against this backdrop, the pay award in 2015 will need to be sustainable and self-funding. We outlined our separate efficiency proposals in respect of both the Maintenance and Operations groups. As we explained, if agreed, these proposals would enable us to offer a pay increase in 2015 of up to 2% for the respective groups of employees. At the meeting your negotiating team stated that they were unable to consider any changes to terms and conditions of employment to fund a pay increase. This position would mean that Network Rail will not be able to offer a pay increase for 2015. In such circumstances our proposals for a long term deal would consist of 0% increase for 2015 and increases for the remainder of CP5, (2016, 2017 and 2018) at the rate of the cost of living pay as measured by CPI. In the meeting we also tabled our proposals for a long term deal. In the absence of agreement on the efficiencies for this year, this would mean 0% increase for 2015 and increases for the remainder of CP5, (2016, 2017 and 2018), which will provide the security of cost of living pay increases as measured by CPI. Continued/………….

Network Rail Infrastructure Limited Registered Office: Network Rail, 2nd Floor, One Eversholt Street, London, NW1 2DN Registered in England and Wales No. 2904587 www.networkrail.co.uk

2 22nd December 2014 2015 Pay Negotiations, Operations and Maintenance General Collective Bargaining Groups

You made it clear that you could not accept CPI as the measure of and would only be prepared to look at RPI. You sought clarification on why we propose to use of CPI which I am pleased to do. As you know Consumer Price Index (CPI) measures changes in the price level of a fixed list of items of consumer goods and services purchased by households. Whilst both RPI and CPI measure inflation, i.e. its measured by taking a basket of goods – food, clothes, petrol, looking at what they cost last year, looking at what they cost now, and finding the proportional difference, CPI can be used to index the real value of wages, salaries and pensions, for regulating prices and for deflating monetary magnitudes to show changes in real values. As part of the discussions you sought an extension of the no compulsory redundancy agreement for the maintenance and operations bargaining groups that is due to end on 31 December 2014. We explained that whilst we are fully committed to doing everything reasonable to avoid compulsory redundancy and really pushing the use of voluntary severance and redeployment there remains a need for organisational change. We offered and would welcome the opportunity to enter into talks on providing greater job security going forward, however we are not in a position to extend the no compulsory redundancy agreement beyond December 2014. We agreed that whilst we remain in positive pay discussions, no notice of compulsory redundancy would be issued to any employee covered by the current agreement. As part of the negotiations we committed to respond to the other items in your claim within this letter and I am please to set these out for you in appendix 2. In the light of these challenging discussions you requested a meeting of your Area Council representatives on 15 January 2015 which we agreed to and since then we have set a date for resumption of negotiations on 21st January 2015 I would like to reiterate what I said yesterday that we recognise that these negotiations are extremely challenging for all parties and that we want to work with you to find an acceptable means of achieving a fair solution. Yours sincerely,

Neal Lawson Director, Maintenance and Operations Services

Appendix 1: General Collective Bargaining Groups: Operations and Maintenance Operations Headcount 2698 364

Role Clarity (5-8) Controllers Electrical Controllers Managed Stations Signallers Supervisors Totals:

Salary Bill £69m £18m

137 74 4414 914

£6m £2m £143m £34m

8601

£272m

Maintenance

Role Clarity (5-8) Other grades Totals:

Headcount 2809 13789* 16598*

Salary Bill £72m £412m £483m

Ops and Maintenance

Role Clarity (5-8) Other grades Totals:

Headcount 5507 19692 25199

Salary Bill £140m £614m £754m

n.b. all numbers rounded to the nearest £m * Please note that in the meeting of 17 th December the maintenance numbers quoted did not include those employees in maintenance employed on Role Clarity contracts which are now shown in these figures.

Appendix 2: Network Rail Response to TSSA Pay Claim Items Please find below Network Rails considered response in relation to the specific items raised in your pay claim. We recognise that we remain in pay discussions and as previously advised we need to focus on pay items and any final response on other items in your claim you would ultimately need to be considered as part of a final package. 1: A substantial increase in rates of pay This is dealt with in the main body of the letter reference ER/SB/821/14 2: Extension of the no compulsory redundancies commitment This is dealt with in the main body of the letter reference ER/SB/821/14 3: Claim for an end to employers being required to work excessive hours and unpaid overtime Analysis of vacancies does not substantiate a practice of permanently managed vacancies. We are working to actively fill the vacancy gap in maintenance assuming that there will be a 5% churn. If there is specific evidence of employees not being able to take their full entitlement of annual leave or being pressurised into overtime we invite you to raise this at the relevant Area Council in the first instance for discussion. At this time we do not propose to review with you overtime rates for all grades covered by these bargaining groups with a view to establishing consistently applied overtime rates for all. 4: Claim to review and harmonise PDTA payments At this point we are declining your request to jointly review and harmonise PDTA payments at this point. Any such changes would have to be considered separate from pay discussions and in themselves would need to be self funding. 5: Claim for improvements to travel facilities The facility to provide safeguarded travel to all employees does not exist. We do not propose to review the current travel subsidy and the cap will remain at £2,250.