laj/C/H/HFRA HR 8 9 05 RCC

25 August 2005

APPENDIX A

Responses received from Control staff and their trade unions

Jennifer McNeill 28/7/05

APPENDIX B

HAMPSHIRE FIRE AND RESCUE SERVICE

BUSINESS CASE

RETENTION PAYMENTS FOR

CONTROL ROOM EMPLOYEES

1 EXECUTIVE SUMMARY

1.1 The advent of Regional Control Centres (RCCs) means substantial change to all Fire Services, their employees and, in particular, those currently working within Control Rooms. The impact of these changes will be far-reaching and will transform current working practices and arrangements across our Fire and Rescue Service (FRS).

1.2 The timetable for moving to RCCs is over a significant period and dealing with changes of this scale may result in Services seeing an increase in turnover and possibly sickness absence. It is therefore important for the Service to consider strategies that will encourage employees to remain to ensure business as usual. The first critical phase of this project is the location announcement due in the `SPRING' of 2005. The anticipated date for completion has so far been identified by the Office of the Deputy Prime Minister (ODPM) as November 2007, but indications are that this is not certain.

1.3 Once the location is known, employees will consider their options as regards continued employment with HFRS. Even with incentives, some employees will choose to leave the Service at that time during this period of transition.

1.4 This paper provides information for the purposes of consultation and makes a business case for making a retention payment to try to minimise the impact of change during this period of transition. HR issues are being dealt with on a co-ordinated basis in the South East Fire and Rescue Services and this consultation paper forms part of that process.

2 BACKGROUND

2.1 The publication of the Government's National Framework Document clearly states the intention to introduce Regional Control Centres and it is anticipated that the Control Centres will be delivered during 2007/08.

2.2 The document states that Regional Management Boards must:

· Ensure the phased transition from existing control rooms to the new control centres is delivered within the overall national timetable;

· Comply with national protocols on staff roles, training and mobilising and back up and resilience requirements.

2.3 Further, the National Framework document says that `the Government expects authorities to make best efforts to re-deploy staff no longer needed for control centre work to other roles' and that they should also ensure retention of sufficient staff to manage individual control rooms until regional control centres have been established.

2.4 The Fire and Rescue Services Act 2004 states that a fire and rescue authority must in particular:

· Make arrangements for dealing with calls for help and for summoning personnel.

It is essential, therefore, to continue to provide a service to the public for responding to emergency situations.

To assist in retaining employees with the key experience, skills, and abilities during this extended transitional period, it may be appropriate to pay a retention bonus.

3 RETENTION

What is it?

3.1 Retention is used during organisational changes to encourage staff to remain with the business until the ultimate completion of the project. It is common for businesses to offer retention in the form of financial benefit, though other options are available. Financial incentives of this type are regarded as compensation for uncertainty but it does not guarantee that employees will stay until the end of the project. Retention payments are not pensionable, but will be subject to tax and national insurance contributions

Who should receive it?

3.2 Retention bonuses are generally paid to business critical staff where the loss of their skills, knowledge and experience could have a detrimental effect to the continuity of the business if they left before project completion.

3.3 One factor that should be taken into consideration is how other categories of employees have been or are being treated in a similar situation and a business case should be made on the merits of each set of circumstances.

3.4 Employees often equate retention bonuses with their value to their organisation. If a group of employees feel they are treated differently to their colleagues or feel under valued, there may be issues of equity to be considered and the Service must be prepared to deal with the consequences and impacts this may bring. In this particular case, and having taken account of these circumstances, it is considered that it would be reasonable for some form of financial retention package to be made.

4 OPTIONS FOR CONSIDERATION BY HFRS

4.1 TIME LINE BONUS

A time-line bonus is paid over a short period of time working backwards from the transfer date. It consists of two payments that reflect and recognise the long-term disruption and uncertainty to the employees and also rewards them for remaining with the organisation until completion

EXAMPLE

Date of transfer to Regional Control Centre: current indications are this will be November 2007 (but this is likely to change). As the South East has a nine month timeframe to complete the transfer to the Regional Control Centre, each Service may decide to begin payment twelve months from the proposed transfer date.

PAYMENT ONE * NOVEMBER 2006	PAYMENT TWO * NOVEMBER 2007
5%	10%

The following table outlines the individual payments that would be made by rank, based on the current salary rates as indicated, but excluding any long service payments:

Individual Time Line Bonus Payments ( Gross)

Rank	Current salary	Payment One ( 5%)	Payment Two (10%)
Fire Control Officers	£31,548	£1,577	£3,155
Senior Fire Control Operators	£27,248	£1,362	£2,725
Qualified Control Operator	£23,750	£1,188	£2,375

4.1.2 The costs for this option are detailed below and the salaries used are the competent rates for Control Room Employees following the Stage 3 pay award (July 2004). The figures are a guide only as they are based on the current rank held be it temporary or substantive. Once the preferred option has been finalised the figures will need to be reviewed following any future pay awards and the final substantive rank of each employee. The figures quoted are pure salary costs and do not include any on-costs.

ELIGIBILITY

4.1.3 To be eligible for the time line bonus, staff would need to be in the employment of Hampshire Fire and Rescue Service on **30 November 2006 and the percentage bonus would be paid against the individual's substantive rank. Payment will be based on Gross Annual Salary and will not include any additional allowance received e.g. FDS or overtime payments made.

4.1.4 Staff joining after 1 November 2006 would not be eligible for the retention bonus.

4.1.5 Staff leaving the Service of their own volition after payment of the November 2006 bonus, but prior to the November 2007 payment will not be eligible for a proportionate payment on leaving. No claw back arrangements will apply to bonuses previously made.

4.1.6 Payment of the *** November 2007 bonus will be paid to staff who are redeployed to alternative posts within HFRS on the closure of the Control Room, including any members of staff who may transfer to the regional control centre during the period

2 November 2006 up to the project completion date.

4.1.7 Payment of the *** November 2007 bonus will be paid to staff who retire on the closure of the Control Room.

4.1.8 No payment will be made to staff engaged on temporary contracts during the period November 2006 - November 2007. Staff who commenced temporary contracts prior to this date will be eligible for the final payment.

* dates are given as an example

** if there is slippage on the project completion date, this date of 30 November 2006 may be reviewed accordingly

*** date may change in line with final project completion date

PROS

· Allows sufficient time for financial planning

· Significant bonuses to reward employees who remain until transfer date

· Spreads financial cost over two year financial cycle

· More tangible reward for those who choose to stay.

· Regarded as a more viable business strategy

· Achieves retention objective of rewarding staff for staying until project completion.

CONS

· Length of time employees have to wait before they receive any reward.

· First payment date might be later if the start date is delayed.

4.2 PROJECT COMPLETION BONUS

4.2.1 A one-off bonus paid when the project is completed and the Regional Control Centre is fully functional.

4.2.2 This bonus would need to be a significant sum to encourage employees to stay until final completion and reward them for the long-term disruption caused to them. A one off bonus of this type would normally attract a gross salary percentage payment between 15% and 20%. The percentages can be varied and should be taken as a guide. The costs for this option are detailed below and the salaries used are the competent rates for Control Room employees following the Stage 3 pay award (July 2004). The figures are a guide only as they are based on the current rank held, be it temporary, or substantive. Once the preferred percentage figure has been finalised the figures will need to be reviewed following any future pay awards and the final substantive rank of each employee. The figures quoted are pure salary costs and do not include any on-costs.

The following table outlines the individual payments that would be made by rank, based on the current salary rates as indicated, but excluding any long service payments:

Individual Time Line Bonus Payments ( Gross)

ELIGIBILITY

4.2.3 The final completion bonus would only be open to individuals employed on permanent contracts or employees employed on contracts of more than 12 months and whose last day of Service will be the project completion date.

4.2.4 The percentage bonus would be paid based on the individual's substantive rank. Payment will be based on Gross Annual Salary and will not include any additional allowance received e.g. FDS or overtime payments made.

4.2.5 Employees leaving the Service prior to the project completion date will not be eligible for a proportionate payment on leaving.

4.2.6 Payment of the bonus will be made to employees who are redeployed to alternative posts within HFRS on the closure of the Control Room.

4.2.7 Payment of the bonus will be paid to employees who retire on the closure of the Control Room.

PROS

· Allows Services sufficient time for financial planning

· Provides flexibility should the transfer date be delayed

· If the percentage of salary is significant, it may encourage employees to remain until transfer date

CONS

· Employees liable for tax and National Insurance contributions - may feel that final sum after deductions is not commensurate with the long-term uncertainty.

· Might be regarded by employees as a de-motivator.

· Length of time employees have to wait before receiving reward.

· Does not show commitment from the Service.

· Perception that Service might renege on the agreement.

· De-Motivator if time slippage on project

4.3 FUNDING

Until the Finance Working Party deliver their report, HFRS should make preparations to fund retention bonuses at a local level. The New Burdens award represented only £223 per person, so could be used to offset some of the immediate costs such as training. The salaries used are the competent rates for Control Room employees following the Stage 3 pay award (July 2004). The figures are for illustrative purposes only at this consultation stage as they are based on the current rank held be it temporary or substantive. Once the preferred percentage figure has been finalised the figures will need to be reviewed following any future pay awards and the final substantive rank of each employee. The figures quoted are pure salary costs and do not include any on-costs.

BONUS OPTION	* NOVEMBER O6	* NOVEMBER 07	TOTAL COST OF OPTION
Time line Bonus * November 06 5% * November 07 10%	£50,811	£101,622	£152,433
Project Completion Bonus * November 07 15%	Nil	£152,432	£152,432
Or * November 07 20%	Nil	£203,243	£203,243

* The dates given are illustrative only and are subject to change in accordance with revisions to the project timescale.

These amounts are, as stated above, the current level of competent pay and based on current staffing levels. These are subject to fluctuations and, in addition, these figures do not include any on-costs which will need to be considered and borne by HFRS.

5. RECOMMENDATION

5.1.1 The following are recommended:

(i) that the two above options are presented to HFRS Control Room employees with a view to receiving their comments as part of a process of consultation. It has subsequently been agreed that the SE Region will take a regional approach over this and a view has already been expressed by the Region that the Project Completion Bonus option is the preferred option. However, as HFRS has already undertaken to consult on both options, then this is the recommended way forward and the comments received from our employees will be considered, together with the views expressed from our regional partners in coming to a final decision about the preferred option.

(ii) that the percentages offered are:

5% and 10% for the Timeline Bonus Option

20% for the Project Completion Bonus Option

(iii) This document will be issued to all Control Room employees affected and their trade union representatives on 18 May 2005, with a closing date of 17 June 2005 for consultation to take place. All comments should be forwarded to Lorraine Hearnden, HR Operations Manager, by letter or e-mail to [email protected]

(iv) The outcome of the consultation process will be considered, together with the views of the region, and a response will be issued to all those employees consulted with as possible after that date.

Target Audience: WT RT NU Control

HAMPSHIRE FIRE AND RESCUE SERVICE

RETENTION

SERVICE ORDER

INTRODUCTION

1.1 Retention

What is Retention?

Retention is used during organisational changes to encourage staff to remain with the business until the ultimate completion of the project. Most businesses offer retention in the form of financial benefit though other options are available. Financial incentives of this type are regarded as compensation for uncertainty but it does not guarantee that employees will stay until the end of the project. Retention payments are not pensionable, but may be subject to tax and national insurance contributions.

Retention is regarded as a loyalty bonus and rewards staff for continuing to provide their skills and expertise during a transitional period and thereby provide service continuity. It may also prevent the need for short-term recruitment. There is no legal requirement to pay retention as an incentive for staff to remain with their business.

HFRS POLICY

The establishment and structure will be based on defined and agreed business needs of the Hampshire Fire and Rescue Service, and must be funded from within the establishment budget allocated by HFRA.

In the event that the Service undertakes a restructure, to meet future business needs, which results in existing posts becoming "redundant", every effort will be made to redeploy the employees in such posts and find `reasonable, suitable, alternative employment ` within the Service. In the event that an alternative position cannot be found then redundancy arrangements will be applied. Please refer to the separate Service Orders on Redundancy and Redeployment.

Under normal circumstances the Service will not make Retention payments to employees. However, where there are exceptional circumstances which are significant and business critical should employees be lost, retention payments may be considered. Some examples of such circumstances might include

· long period until changes implemented ( two years or more)

· Key member of staff with unique business knowledge

In such circumstances a business proposal for Retention Payments should be produced and submitted by the relevant function head in writing to the Chief Officer for consideration.

Any business case that results in approval for Retention Payments

should not be treated as a precedent to change the overall Service Policy for future payments.

PROCEDURE

A written business case for retention payments should be written by the function head and submitted for consideration to the Chief Officer. The written business case should outline clearly defined business reasons for making such payments, give an indication of the associated business risks of non payment and the extent to which it is being used to manage that risk.

The business case should include:

· Executive Summary ( if applicable)

· Introduction/ Background

· Costed Options for retention payments ( including Pro's and Con's)

· Recommendations

If approved, then the business case should form part of the consultation process ( not negotiation) with representative bodies and employees directly affected by the change.

3 CONDITIONS OF SERVICE

Nothing in this Service Order should be interpreted as contradicting the provisions made in all employment legislation and good practice guidelines:

The National Joint Council for Local Authorities' Fire Brigades, Scheme of Conditions of Service (The Grey Book), The National Joint Council for Local Government National Agreement on Pay and Conditions of Service (The Green Book).

Date: 18 May 2005

Enquiries To: Jennifer McNeill My Reference: JM/cehJ/Reynolds-jm

Extension: 2348 Your Reference:

Dear

RETENTION SERVICE ORDER

As part of managing the people issues within the Regional Fire Control Project, we have identified that there will be times when a business case will need to be made for retention payments in exceptional circumstances such as this. We have prepared a business case and draft Service Order on Retention which is currently being consulted on with our Fire Control employees, FBU and UNISON as the relevant unions for that project. Please could I have any views from your respective unions on the draft Retention Service Order at the same time.

The closing date for this is Friday 17 June 2005. If you have any members in Fire Control please let me know and I will forward you the business case for retention payments in this area as part of the consultation process.

If you have any queries on this meanwhile, please contact Lorraine Hearnden, HR Operations Manager on [email protected]. Thank you.

Yours sincerely

Jennifer McNeill

Head of Human Resources

cc: Lorraine Hearnden