Hampshire Fire and Rescue Authority

Human Resources Committee Meeting Item 7

8 15/03/2005September 2006

Back Pay - Progress UpdateError! Bookmark not defined.

Report of the Chief Officer

Contact: Lorraine Hearnden Tel: 023 80 64 4000 ext 5342

Email : [email protected]

1

Summary

1.1

This report summarises the progress made by the project group that have been assigned to resolve the back pay issue that resulted from the application of the Job Evaluation Results in April 2006.

2

RecommendationError! Bookmark not defined.(s)

2.1

That the Human Resources Committee note the contents of the report.

3

Introduction Error! Bookmark not defined.and Background

3.1

Following the implementation of the results from the Job Evaluation process for Grey Book employees, it was established that the NJC guidance notes relating to the application of Long Service Increments had been misinterpreted for some employees. This was partly as a result of HFRS being the first Fire Service in the country to have moved from rank to role and consequently applying back pay. This has raised questions on the original 2003 Pay Agreement which the NJC/LGE have had to revisit following our questioning.

3.2

97 employees were initially identified who had potentially been overpaid. During the course of the project, a further 26 possible cases were established in relation to the application of the Edexcel (Development - Competent) pay changes that were actioned on the same date. These cases have been reviewed and, of this number, 10 employees have been overpaid, 1 underpaid and the remaining 15 cases were found to have been correctly paid.

3.3

Employees in the original group were contacted in writing within a week of their receipt of this money in the April 2006 payroll and advised of the maximum gross amount that could be reclaimed. DCO Curry advised the previous HR Committee Meeting on 16 June 2006 of this error.

3.4

Since notification, a project team was established by DCO Curry, consisting of HR team members with payroll experience, the project manager of the JE project, a member of the communications team, the Representative Bodies and an auditor from HCC Internal Audit. The Deputy Head of HR, Susan Templeton, was appointed to co-ordinate all activities. Frequent meetings have taken place of this group to discuss progress and next steps.

3.5

Work has been undertaken in respect of activities in the following key areas and a timeline produced for the management of these activities:

· Establishment of our legal position to reclaim the overpayments from our legal adviser

· Establishment of the tax implications for employees and employer when reclaiming this money from the Southampton Tax Office

· Clarification of the guidance relating to long service increments with the NJC/LGE

· Production of a full gross breakdown of the figures paid to the 97 employees and the amounts to be reclaimed following application of the revised guidance.

· Working with HCC to calculate the net figures for all sums overpaid, following deduction of tax, NI and refund of Pension Contributions, etc.

· Regular communication to staff affected e.g. via letters, open forum, frequently asked questions on website, rep bodies, etc.

· HCC Internal Audit team have been included from the outset to verify the work being undertaken to correct this mistake and ensure that all monies are recouped. They have also undertaken a random sample check of 10% of all cases overpaid to ensure the recalculation processes were robust and have endorsed the work undertaken by HFRS with a quality assurance statement.

4

Current position

4.1

All staff were issued with a bundle of information at the beginning of July, which included the following:

· Letter of explanation

· Detailed breakdown of all figures net and gross

· Explanatory guidance note

· Personal repayment plan

· A statement of quality assurance on the calculations from HCC Audit

· Frequently asked questions - latest version

· Option to request a 1:1 meeting with a representative from the project team to discuss their personal queries

4.2

From the original 97 cases we established that one was underpaid; 30 had nothing to repay and 66 had been overpaid. 25 individuals requested one to one meetings to discuss their case prior to deciding the best repayment options for themselves. We received 50 repayment option forms by the July deadline.

4.3

Deductions from pay commenced from the August payroll for these employees.

4.4

A reminder letter will now be issued to the remaining 16 employees who have failed to make any contact with us.

5

Actions Outstanding

5.1

Confirmation from the remaining employees as to their preferred deduction option.

5.2

Production of full breakdown figures for the new batch of 11 employees.

6

Contribution to Corporate aims and objectives

6.1

The establishment of appropriate pay for staff is included within the IRMP Objective on delivering our Workforce Strategy (MR1). This includes addressing any errors made by the Service in applying these arrangements.

7

Risk Analysis

7.1

The key risk for Hampshire Fire and Rescue Authority would be failure to apply the appropriate nationally agreed pay scales to its employees in relation to the application of Long Service Increments. As these payments are currently set to continue until July 2007 this would result in a significant overpayment to this group of employees. HFRS would then fail to maintain comparability with other Services, which could lead to further complications when we apply the replacement arrangements for CPD payments that are currently being negotiated nationally by the NJC/LGE and FBU.

8

Resource Implications

8.1

Human Resources

The dedicated project team was established predominantly from our existing workforce. The services of an Auditor and additional payroll support was secured from the respective departments at Hampshire County Council (HCC).

8.2

Physical Resources

None specific.

8.3

Information and Communications Technology Resources

Use of the Human Resource payroll system to look at the historical pay records for staff was identified. Most of this work was able to be completed by Service HR employees, however, there was an additional need for HCC payroll technical support team to refer to previous taxation records.

To be provided from existing resources.

8.4

Financial Implications

As all the monies are intended to be recovered from employees by the end of March 2007 the costs relate to the indirect costs of Service project team members and direct costs of HCC Audit Quality Assurance work and legal advice. Where repayments are extended in to the new financial year (2007/08) there may be costs to the employee, but acceptance of these costs have been confirmed by the two individuals that may be affected. No additional corporate liability is anticipated. All costs will be supported from existing budgets.

9

Equality Impact Assessment

9.1

The proposals within this report are considered compatible with the provisions of the European Convention on Human Rights, the Human Rights Act 1998, and the Race Relations (Amendment) Act 2000.

10

Consultation

10.1

This was discharged through the ongoing attendance of a member of each Representative Body at the project review meetings.

11

Conclusion

11.1

The establishment of appropriate pay arrangements for HFRS, given the nationally agreed basic pay scales, is a key objective of the Workforce Plan. Where errors in pay are made to employees, the Service is duty bound to reclaim this money, whilst endeavouring to minimise the potential for financial hardship for the employees directly affected.

Background Information (Section 100D of Local Government Act 1972)

The following documents disclose the facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of the report:

None

Note: The list excludes: (1) published works; and (2) documents that disclose exempt or confidential information defined in the Act.