The Agreement and addressing some myths

[Martin Walsh]

I have read a lot of threads where individuals are very critical of the agreement and wanting everything from payments to be backdated to 2014 to having a 52 week reference period.

In addition some believe we have let down the 6000 individuals who have took out ET claims many encouraged by the union.

It is important individuals understand there have been many important tribunal decisions which have set the foundations for decisions and indeed how collective agreements could be negotiated.

Additionally the Government introduced legislation in 2015 which said any claims bought after 1st July 2015 could only go back a maximum of 2 years.

At that stage average holiday pay only included the following in the calculation.

Guaranteed overtime
Non guaranteed overtime which employees had to work but employees did not have to guarantee .
Commission
Incentive bonus
Shift premiums
Travel time bonus

In 2019 the East of England Ambulance service NHS Trust was taken to the court of appeal by Flowers and others. This concluded that voluntary overtime where it was regular and settled and an employer can establish a pattern should also be included in average holiday pay.

The court of appeal did not establish what regular and settled overtime was.

However the principle of average holiday pay is normal pay which is normally received should form the basis of overtime.

Royal Mail were happy to continue to pay out a few hundred here and there based on settling tribunal cases with a non confidential clause in place and that individuals would need to apply each time and could only go back 3 months.

Part of the union strategy to get a collective agreement and that was always the policy was to encourage individuals to take out ET claims and to block up the tribunal system.

We got 6000 to take up claims. Remember approximately 70% of postal workers work some form of regular overtime so a collective agreement benefits 70% of the workforce not just 6000 individuals.

Royal Mail could have dragged this out further , many employers are still doing this on average pay . Clearly by entering a collective decision they were moving away from paying a few thousand pounds to those who took a decision to go to the tribunal or sign up to a collective agreement which will cost them upwards of 20 million per annum.

So of course the employer within negotiations wanted to ensure that only those who work regular overtime were included.

The court of appeal classed this as where an individual can establish a pattern of voluntary overtime which was sufficiently regular and settled.

Remember average holiday pay is considered as your normal pay being received whilst on holiday for the first 4 weeks of your annual leave.

There has been a recent decision which allows seasonal or variable hours or those on annualised hours to be referenced over 52 weeks but we do not fall into this category.

Therefore the key to this was defining regular overtime and 2 hours per week or 8 hours per month is not an unreasonable assumption on defining regular overtime. The 6 month reference period was also defined from the working time directive agreement which was within the Way Forward.

Royal Mail red line within the negotiations was they were not going to pay average holiday pay to individuals who did it on an ad hoc and irregular basis such as before an holiday or at Christmas. There had to be a sufficiently regular pattern.

I realise that everyone would want any overtime they did over a 52 week period included but to achieve a collective agreement which benefits tens of thousands of employees you have both parties happy with the agreement. There would not be an agreement if we held out for this to be included.

Remember this agreement now provides part timers who each week work up to 38 or if on SWW to have this average pay for the whole of their contracted annual leave not just their first 4 weeks.

In addition if they work above 37 or 38 hours based on the reference period criteria they will get this on their first 4 weeks annual leave.

For full timers they will get average holiday pay based on the criteria on their first 4 weeks annual leave.

Up to 2000 we have something call improved holiday pay which gave 2 payments per year based on hours worked. This went under the Way Forward to be used to improve basic pay.

Remember the original court decision was that holiday pay would be based on your first 4 weeks of annual leave.

Now let’s turn yo the 6000 individuals who supported the unions claim to submit an ET case alway knew the Strategy was to get a collective agreement which meant that it covered 110 thousand individuals not just 6000.

Branch’s should talk to these individuals as it is a no brainier, if they continue with the ET then clearly they will not be entitled to the full terms of the collective agreement and any ET decision.

I have been holding a number of workplace meetings with members ( over 30 meetings in the last 5 weeks and the agreement has gone down well particularly from part time members which is life changing. I have also spoken to some individuals who took out an ET and as long as the rep helps them they are happy to withdraw their claim.

My experience is that some members will criticise the union for not achieving a collective agreement on the issue of average holiday pay and then criticise the union for the terms of the agreement.

Remember average pay is defined as normal pay which is sufficiently regular and settled. It is not that I do a rest day every 3 months or work overtime a month before my holiday.

[Dexydog]

Thanks for clarifying with such a lengthy and informative post.
However the fact remains none of this was communicated very well at all.
Most in my DO didn't even know a vote was happening.
A lot act with surprise when I tell them a deal has been reached.
All of those didn't get to vote one way or the other.
It's not how an issue as important as this should be handled.
Can you clear up one point for me- if an office has not implemented a revision, do those employees benefit from the agreement (I read somewhere in the agreement that intimated they wouldn't).
And when can we expect letters of expression to drop ET claims, and ultimately the money in our banks?
Again, this is not being communicated, (I fully realise it's only a week since the agreement was announced, and some mention of bank holiday pay being outstanding- surely to God this isn't going to delay things even further??), but we've waited long enough to still not know timetables, even rough ones.
Tbh I still can't decide if to let an ET deal with my claim, if it looks like it will be settled quickly I might just let it go, because quit frankly I'm sick to the back teeth of the whole sorry issue.

[SSkUNkY]

Payments for time spent writing letters, making phone calls, doing calculations, collecting evidence (searching for precedent) etc etc.

ACAS wasted time, stress over having to fight for moneys which has been earnt under law and Royal Mail was refusing to pay except under sufference.

Royal Mail was well aware they were in the wrong, both morally and under law, for many many years, and chose not to be fair in the way they paid holiday pay.

These factors need to be considered in full when making compensation payments and yet there is no mention in the collective agreement which has been reached; therefore it seems as though the only way to get a fair deal is to go it alone once again.

[Dexydog]

I think the deal is fair, but only provided you are confident you haven't shat out on any qualifying periods.
Going forward I couldn't care less because I'm leaving soon, for those that have to live with the deal, it's very poor and open to people missing out big time.
All under the CWU's watch.
I totally understand it's a negotiation, and that can't be easy with a firm with obviously very good lawyers and deep pockets, but come on there's no way the union should have agreed to the 6 monthly qualifying periods, however low the hours are (and notwithstanding Rm's insistence about defining regular, which in some ways is fair enough).

[Woody Guthrie]

Therefore the key to this was defining regular overtime and 2 hours per week or 8 hours per month is not an unreasonable assumption on defining regular overtime.

First of all most of the similar agreements lately have a clause that excludes periods of sick absence or unpaid leave from the reference period. There's also case precedent to do this.

Why doesn't this agreement address that? Surely a member who works 50 hours of overtime for 5 months should not be penalised for being ill for 4 weeks or for taking unpaid time off to look after a sick relative?

And secondly it's taken far too long to get here and there's no excuse in the world you can come up with to cover that, how many millions has that cost our members? The union should be apologising and breathing a sigh of relief not back slapping and peacocking. It's a bare minimum agreement that just about covers the legal liability of the business.. 5 years late.

[iainwilson]

Therefore the key to this was defining regular overtime and 2 hours per week or 8 hours per month is not an unreasonable assumption on defining regular overtime.

First of all most of the similar agreements lately have a clause that excludes periods of sick absence or unpaid leave from the reference period. There's also case precedent to do this.

Why doesn't this agreement address that? Surely a member who works 50 hours of overtime for 5 months should not be penalised for being ill for 4 weeks or for taking unpaid time off to look after a sick relative?

And secondly it's taken far too long to get here and there's no excuse in the world you can come up with to cover that, how many millions has that cost our members? The union should be apologising and breathing a sigh of relief not back slapping and peacocking. It's a bare minimum agreement that just about covers the legal liability of the business.. 5 years late.

This is why I won’t be dropping my claim. Especially when Martin himself said on this forum I would get 2 years back dated from my claim date in sep 2019

[Dexydog]

Does anyone else know anything about what's going on in court?
Not heard a thing since last year.

[worktotime]

@Martin

first of all like you say its a great agreement and life changing agreement for part timers and that is because you know that the job is run on overtime instead of increasing contracts, but for full timers its not all rosy , where does it say in law that you only get average holiday pay if you work 8 hrs a month over a 6 month period ( 48 hrs ) to qualify , IT DOESNT, so who decided this the cwu or the company ? it shouldnt matter how many hours you work as all overtime is overtime regardless , and all those that where paid by the company was they paid as per this new agreement ? NO they wasnt , so there again the company has got what they wanted , and then for the cwu to tell the posties who claimed thanks but now we wont support you in an ET is a disgrace and i hope posties will see through this agreement and do what me and others in our office has done

[Woody Guthrie]

where does it say in law that you only get average holiday pay if you work 8 hrs a month over a 6 month period ( 48 hrs ) to qualify , IT DOESNT,

It does however state that the legal directive only relates to regular overtime not all overtime.

Unfortunately there is no legal definition of regular overtime.

Unfortunately that means companies are to a certain extent free to make up their own definition.

[worktotime]

where does it say in law that you only get average holiday pay if you work 8 hrs a month over a 6 month period ( 48 hrs ) to qualify , IT DOESNT,

It does however state that the legal directive only relates to regular overtime not all overtime.

Unfortunately there is no legal definition of regular overtime.

Unfortunately that means companies are to a certain extent free to make up their own definition.

thanks.

[Grumpyoldmailman]

Another point I have been asked which I can’t answer. Sunday overtime, how is that going to be calculated for average holiday pay purposes. Will it be separate due to the premium paid?

[Kaning It]

I have read a lot of threads where individuals are very critical of the agreement and wanting everything from payments to be backdated to 2014 to having a 52 week reference period.

In addition some believe we have let down the 6000 individuals who have took out ET claims many encouraged by the union.

It is important individuals understand there have been many important tribunal decisions which have set the foundations for decisions and indeed how collective agreements could be negotiated.

Additionally the Government introduced legislation in 2015 which said any claims bought after 1st July 2015 could only go back a maximum of 2 years.

At that stage average holiday pay only included the following in the calculation.

Guaranteed overtime
Non guaranteed overtime which employees had to work but employees did not have to guarantee .
Commission
Incentive bonus
Shift premiums
Travel time bonus

In 2019 the East of England Ambulance service NHS Trust was taken to the court of appeal by Flowers and others. This concluded that voluntary overtime where it was regular and settled and an employer can establish a pattern should also be included in average holiday pay.

The court of appeal did not establish what regular and settled overtime was.

However the principle of average holiday pay is normal pay which is normally received should form the basis of overtime.

Royal Mail were happy to continue to pay out a few hundred here and there based on settling tribunal cases with a non confidential clause in place and that individuals would need to apply each time and could only go back 3 months.

Part of the union strategy to get a collective agreement and that was always the policy was to encourage individuals to take out ET claims and to block up the tribunal system.

We got 6000 to take up claims. Remember approximately 70% of postal workers work some form of regular overtime so a collective agreement benefits 70% of the workforce not just 6000 individuals.

Royal Mail could have dragged this out further , many employers are still doing this on average pay . Clearly by entering a collective decision they were moving away from paying a few thousand pounds to those who took a decision to go to the tribunal or sign up to a collective agreement which will cost them upwards of 20 million per annum.

So of course the employer within negotiations wanted to ensure that only those who work regular overtime were included.

The court of appeal classed this as where an individual can establish a pattern of voluntary overtime which was sufficiently regular and settled.

Remember average holiday pay is considered as your normal pay being received whilst on holiday for the first 4 weeks of your annual leave.

There has been a recent decision which allows seasonal or variable hours or those on annualised hours to be referenced over 52 weeks but we do not fall into this category.

Therefore the key to this was defining regular overtime and 2 hours per week or 8 hours per month is not an unreasonable assumption on defining regular overtime. The 6 month reference period was also defined from the working time directive agreement which was within the Way Forward.

Royal Mail red line within the negotiations was they were not going to pay average holiday pay to individuals who did it on an ad hoc and irregular basis such as before an holiday or at Christmas. There had to be a sufficiently regular pattern.

I realise that everyone would want any overtime they did over a 52 week period included but to achieve a collective agreement which benefits tens of thousands of employees you have both parties happy with the agreement. There would not be an agreement if we held out for this to be included.

Remember this agreement now provides part timers who each week work up to 38 or if on SWW to have this average pay for the whole of their contracted annual leave not just their first 4 weeks.

In addition if they work above 37 or 38 hours based on the reference period criteria they will get this on their first 4 weeks annual leave.

For full timers they will get average holiday pay based on the criteria on their first 4 weeks annual leave.

Up to 2000 we have something call improved holiday pay which gave 2 payments per year based on hours worked. This went under the Way Forward to be used to improve basic pay.

Remember the original court decision was that holiday pay would be based on your first 4 weeks of annual leave.

Now let’s turn yo the 6000 individuals who supported the unions claim to submit an ET case alway knew the Strategy was to get a collective agreement which meant that it covered 110 thousand individuals not just 6000.

Branch’s should talk to these individuals as it is a no brainier, if they continue with the ET then clearly they will not be entitled to the full terms of the collective agreement and any ET decision.

I have been holding a number of workplace meetings with members ( over 30 meetings in the last 5 weeks and the agreement has gone down well particularly from part time members which is life changing. I have also spoken to some individuals who took out an ET and as long as the rep helps them they are happy to withdraw their claim.

My experience is that some members will criticise the union for not achieving a collective agreement on the issue of average holiday pay and then criticise the union for the terms of the agreement.

Remember average pay is defined as normal pay which is sufficiently regular and settled. It is not that I do a rest day every 3 months or work overtime a month before my holiday.

You have referred to Flowers. However much of that case was about contractual overtime under the NHS Agenda for Change. The Flowers case does though conclude that Dudley v Willetts was correct on the issue of regular overtime.

In Willets, the judge said they had no problem concluding that a payment is normally made if paid over a sufficient period of time on a regular basis. They made reference to one week a month or one week in 5 weeks as examples.

Any tribunal would not exclude voluntary overtime as a matter of principle as that would only encourage zero hours contracts (or in our case 25 hour contracts) The judge in Willets specifically referred to the risk identified by AG Trstenjak in regard to Article 7 who made clear that it was not acceptable for employers to contract a low level of hours and then categorise the extra hours as voluntary overtime so as not to form part of holiday pay.

You have said that 70% of postal workers work some form of regular overtime. How many on 25 hour contracts never work overtime? Post would simply not be delivered every day without overtime.

The 25 hour model is exactly the type of contract Atorney General Trstenjak said would contravene Article 7 and why these sort of cases have gone to ETs.

The Willets decision was made before The Good Work Plan and so only referred to a 12 week average not the new 52 week average. Of course, as I have said before, agency postal workers get average holiday pay calculated over their pay for the previous 12 months but under this deal, some employees won’t. How can that possibly be seen as a fair outcome? After so long, the Union should have not bailed at the final hurdle as by doing so, they have done their members a disservice. Fortunately for the union, many posties are either too worn down or simply too overwhelmed by how the deal has been communicated that they will just be grateful it’s at an end and that some holiday pay is coming in some circumstances. Some of those will only realise the impact of the regular definition at the exact point it will hurt them most i.e. after time off for a bereavement or sickness. That is unacceptable.

[Dexydog]

Excellent, thorough and interesting read.
Thanks so much.
I read MW's post when it first came out, and unfortunately he's made no further comment.
His section about encouraging 6000 members to make claims to "clog up the tribunal system" I have made a note of, and will be mentioning this attitude by the union in my ET claim.
A court isn't going to like that I don't think.
Thanks Martin.