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Update
Tuesday
7 December 2004 PAY AND PENSION CRISIS IN FURTHER EDUCATION DEEPENS Just when you thought it couldn’t get any worse… The pay settlement agreed between the unions and the Association of Colleges on behalf of the college employers appears to be unravelling before our eyes. The Times Educational Supplement has reported (3 December 2004) that further strike action has been threatened due to the failure of the employers to meet the settlement in full, part, or at all. LEAF’s claim that the settlement, even if delivered, would not bring Lecturers near to parity with schoolteachers has now been acknowledged by all sides to have been true. Even if the claim were to be paid in full, a ‘best case’ comparison would leave Lecturers 6% behind teachers. The true figure , adjusted for responsibilities of the staff in the two sectors (basic rule: in a school ––if you do it ––you get paid for it; in Further Education you just do it) is that Lecturers are paid up to 30% less than schoolteachers when pay and conditions of service and prospects are factored in, as they must be to achieve a true comparison.
What pay demand? The pay ‘deal’, which has not been delivered as usual by the employers’ side, runs out next August. If the Lecturers’ unions do not want to spend the rest of time playing ‘catch up’, then it is necessary for a radical break with past practice. Unless the Association of Colleges agrees to achieve a binding agreement on pay negotiations, then the teacher and staff unions should not pretend to be negotiating with them. The colleges pay the salaries; the colleges must be the place where negotiation takes place. We do not favour plant by plant bargaining, but the only realistic alternative to this is a National bargaining network which has binding agreements. Under the present system, no effective pressure is being put on recalcitrant employers who will not pay an agreed rise. The AOC even colludes in this diffusion of pressure by emphasising constantly that the pay settlement is merely a recommendation on colleges, which must be free to take account of their individual circumstances. This is all quite true in the arrangements that exist, but it means that the AOC plays no essential role in the process. The pay claim must reiterate the need for a 30% pay increase, which recognises the specific job commitments given to Lecturers and the poorer conditions of service. A pay increase must be free of additional responsibilities and be part of a return to a National framework of pay and conditions.
How much longer will the employers honour Lecturers’ pensions? We have warned for some time that the pension entitlements of Lecturers could be undermined by the fact that the college employers are free, in the absence of collectively agreed terms, and the ‘independence’ of colleges, to leave the teachers’ superannuation scheme. We believe that in their never-ending search for savings, the employers will seek to end their commitment to the final-salary scheme as it is presently constituted.
Will Lecturers be in the Teachers’ Pension Scheme in five years’ time? They might be, or they might not. Much of this depends on us. The best way to save your pension is to support LEAF’s campaign to re-establish Lecturers’ National Conditions of Service and pay determination. Without these safeguards, it will become increasingly likely that employers will seek to change the status (and, ipso facto the pension benefit entitlements) of their Lecturers. It has already been mooted in the Civil Service that a move from a final salary pension to an ‘average salary’ calculation, which will be less favourable to civil servants, will be sought. Our message to you is clear: be vigilant on your pension, and redouble your efforts to regain your lost Silver Book collective agreements. Without these safeguards, your pay and pension prospects will not improve.
Update
Friday
7 May 2004 IS YOUR FINAL SALARY TEACHER’S PENSION SAFE? Eleven years ago, colleges left local authority control to gain the dubious status of ‘independent corporations’. The staffing policy of all three hundred plus colleges since that time has had one connecting thread running through: that has been to emphasize the discontinuity with the past, and the non-compatibility of Lecturers’ status with that of schoolteachers and others who work for local authorities. In practical terms this has meant a ceaseless war of attrition against Lecturers’ terms and conditions of employment and pay rates. Today, nearly all Lecturers work to individual contracts of employment. The so-called ’local contracts’ have no status as collective agreements as we properly understand them in the trade union movement, and many Lecturers reading this will have endured several changes of contract in the last few years, with each change bringing slightly worse conditions that the last. LEAF has repeatedly warned that the de-coupling of Lecturers’ bargaining rights from the national collective agreement brings great dangers for your standard of living, prospects and pension. Up until now, the corporations have not sought to leave the teachers’ pension scheme, which Lecturers were enjoined with as part of the hostoric national framework, but can you be sure that this situation will not change?
LECTURERS’ PENSION RIGHTS HANGING BY A THREAD Let’s look at the arguments? In the run-up to incorporation, serving Lecturers were written to by the new corporations. The letter which all serving Lecturers received, although purportedly composed by each corporation, was actually prepared by the CEF (now AOC), the employers’ organisation. The thousands of identically-worded letters essentially sought to reassure staff that no changes would take place in their terms and conditions which were not agreed by the corporation. In a misleading way which became characteristic of the CEF at that time, the letter omitted to say that the employers actually intended to bring about wholesale changes to conditions of service, pay and tenure. This duly followed and today Lecturers are much worse off that they would have been if they had stayed in local authority employment. Agency Staff have no access to Lecturers’ pension rights.
HOW MUCH LONGER WILL LECTURERS KEEP THIS BENEFIT? The thousands of agency staff who joined the sector in the following years were explicitly excluded from access to the Lecturers’ final salary scheme. However, full-time Lecturers who were designeated Lecturers were left alone for the time being. But, it should be made clear that there is nothing to stop any or all the corporations leaving the teachers’ pension scheme at any time. The post-incorporation settlement allowed corporations the freedom to choose whether or not to be bound by the terms of collective agreements, and this includes participation in the pension scheme. This is not the case for schoolteachers employers, who are still bound by the scheme.
THE EMPLOYERS WILL CONSIDER OPTING OUT OF THE SCHEME The scheme which Lecturers are part of is a final salary scheme, which involves contributions from employer and employee. In the private sector, following years of poor returns on the stock markets, employers have been closing down final salary schemes to new and existing staff. You may be aware of a number of high-profile cases of private companies going out of business and leaving ex-staff with no final salary pensions. some after thirty-five years of contributions.
THE PUBLIC SECTOR IS NOT IMMUNE FROM THESE DEVELOPMENTS More recently, it has been proposed by public sector employers in the rail industry to prevent new employees joining a final salary scheme, and instead compelling them to take out a savings plan, or ‘defined contribution’ pension. This has been rightly described as a ‘glorified savings plan’ by our rail union colleagues. Such a move would probably be the form an attack on Lecturers’ pensions would take. First, it would be likely that new joiners would be refused access to the teachers final salary scheme. After that was properly embedded, it would be a logical next step to close the scheme to existing members by the method of offering a curtailment on benefits and a calculation up to the point the employers cease theitr contribution.
HOW CAN WE RESIST SUCH A MOVE? We in LEAF have stressed many times that the fight against the injustices brought about by incorporation are not merely about the situation of a small and declining number of ‘refuseniks’. It is about the long term pay, prospects, and pensions of all staff in the sector, and the vitality of the sector itself. The endless search for savings will compel corporations to consider leaving Lecturers without a final salary pension scheme. Many will have looked already at the cost benefits of alternative arrangements, just like the rail employers. Only LEAF’s principled stance can offer a long-term security for Lecturing and other staff in the sector. We would like to have your views on any matter connected with the sector.
NEW ATTACKS ON LECTURERS’ PENSION RIGHTS MUST BE FOUGHT Colleagues will be aware generally of a pensions crisis in Britain and the Western world generally. Here it had been claimed that employees on a final salary scheme were safe from the vagaries of the stock markets, and could look forward to receiving their pensions at the appropriate age. LEAF has consistently warned against complacency in this matter over the past few years. Quite apart from the fact that a final salary pension can be diminished by constant downward pressure on pay, it is clear that Government has been looking for ways to make the pension harder to obtain, or to reduce its real value to the employee. In June, the Government announced that Teachers’ pension arrangements were being reviewed, with a proposal to make 65 the ‘normal’ retirement age. Bearing in mind that Teachers are entitled to pick up their pensions at 60 as accrued, such a move would clearly force many thousands to work an extra five years to pick up their pensions without suffering a swingeing reduction (or ‘actuarially reduced pension’–ARD). There is no doubt that the DfES is proceeding with the changes, designed to cut costs and compel Teachers to work for longer, or suffer a cut in their pension entitlements. It is absolutely imperative that every Lecturer and Teacher is aware of these proposals and what they mean for pension entitlements. We in LEAF are clear about our view on these matters. The changes are retrogressive, punitive and completely unwarranted. They will mean, if implemented, that some staff will die ‘in harness’ because they will have been compelled to work beyond a time when they should have been able to retire. The changes will also mean that senior staff will leave the profession, to preserve their pension rights intact, and plan to see out their remaining work years outside education. Their skills will be thus lost to teaching. Bad on both counts. In an article in the Times Educational Supplement (18 July 2003), David Miliband, the New Labour School Standards Minister (what’s his business pronouncing on these proposals, anyway?) gave what he describes as ‘five clear guarantees’ to serving Teachers. They are: 1) If you are aged 50 or over, your pension benefits will not be affected by the proposed changes 2) Pension benefits relating to past and present service (up to the time the changes take effect) will not be affected by the higher pension age 3) You will still be able to retire at, before, or after the age of 60 4) Your union will be fully consulted before any changes are made 5) The DfES will examine the scope for introducing improved benefits and flexibilities
READ THE SMALL PRINT BETWEEN THE SPIN It is clear from even the most cursory reading of David Miliband’s article, that what is being proposed offers no comforts to the majority of serving Teachers. Miliband operates in the world of New Labour spin and obfuscation, where nothing is ever said plainly and honestly. We need a translation. Let us consider what each of these five ‘guarantees’ really means: 1) If you are under 50, you will have to work for five more years than at present to collect your pension as accrued. If you are now under 50, and try to access a pension when you are 60, you will find an actuarial reduction taking place if you haven’t put in 40 years by that time. 2) Any pension benefits that begin to be accrued after the date of the changes will not be as good as those before 3) If you retire at 60, without putting in the full complement of years, your pension will be reduced. If you retire before 60, you will suffer a sliding scale of reductions, depending on your age at retirement. You can slog it out for as many more years as you want, though (health permitting). However, don’t forget the ability of your employer to dismiss you on grounds of capability. 4) Your union will be consulted, but we have no intention of listening to any objections seriously 5) Don’t hold out any hopes of any concessions on this proposal. The other clear message from the Government to Teachers and Lecturers is this: We will not value your years of work with a decent pension.
MPs HAVE ENSURED THAT THEY WILL NOT SUFFER ANY DIMINUITION OF THEIR PENSION RIGHTS. David Miliband and his fellow MPs, who enjoy the most cosseted and privileged working conditions and benefits of any major legislature, took action last year to improve their own pension benefits. Changes were made by the MPs, and then voted on by MPs, which ensures than an MP can retire on a full pension after just 27 Years of service. A full pension is then paid using a 1/40 divisor (it was previously) 1/60, of a salary which MPs have hiked up massively in the past ten years. It is certain that no productivity increases were secured from the MPs in return for this largesse.
IF IT’S GOOD ENOUGH FOR THEM, ITS GOOD ENOUGH FOR US If a good pension is right for MPs, then it is right for Teachers and Lecturers. Miliband claims that Teacher salaries are ‘rising rapidly’ and that a workload agreement will cut hours worked. He clearly doesn’t mean us. Further Education Lecturers’ pay has stood still for ten years, and their workloads have increased steadily, to the point where college managers have been unable to achieve more because staff have reached absolute physical limits. LEAF will write to Charles Clarke to arrange our consultation rights, but we will also begin a campaign to defeat the Government’s plans. Like our campaign on contracts, which is now proceeding through Europe, we will work tirelessly to defeat these anti-Teacher measures. We would like to hear your views and opinions. In order to make the Government think again, it will be necessary for all Teachers and Lecturers, in schools, colleges, sixth forms and universities, to work together.
Contact LEAF now to offer your views and observations.
BIG PENSIONS IMPROVEMENTS FOR PUBLIC SECTOR WORKERS ANNOUNCED (Please note: once again, this is restricted to Members of Parliament) At a time when the pensions prospects of millions of employees are being seriously compromised by falling stock market values, MPs have moved decisively to improve matters. For themselves. Just before the Summer Recess, MPs in Committee voted by 14 to 1 (with a lone Liberal Democrat dissenting), to change their pension calculation rules to be based in a 1/40 calculator, rather than the 1/50 basis now in use. The new arrangements will mean that to gain a full pension, which is a staggering 2/3 of salary, MPs will have to put in only a total of 27 years’ service. The transitional funding will be met by the taxpayer. Robin Cook, the Leader of the House, explained that MPs would contribute more themselves! This justification is wholly beside the point, because in fact all of the pension contributions are met by the taxpayer, since MPs remuneration packages are entirely funded from the public purse. These changes, voted by MPs for themselves in defiance of recommendations from their own review body, should be seen in the context of increases in the last few years in MPs’ salaries, again voted through –by MPs. Because theirs is a final salary pension scheme, the eventual pension is calculated on a best salary basis. MPs have therefore voted huge increases for themselves consistently in the past few years. The latest change is merely a final piece in the jigsaw. LEAF does not have a political axe to grind. We highlight this situation merely to draw attention to the gross inequity between their arrangements and ours. Lecturers must work for 40 years (not 27) to get a ‘full’ pension, which is then half (not 2/3) of salary. The final salary calculation is based upon the lowest salary settlements in the entire public sector. This year, more Lecturers retired on 1993 pension rates, due to a Government-inspired freeze. Almost none will achieve 40 years, since this is virtually impossible for a teacher, particularly in FE. Twenty-seven years would yield a pension of less than £7,000 per annum. If it was taken at 55 rather than at 60, recent changes voted by MPs would reduce the pension to less than £5,000. The best that can be said of MPs’ behaviour is that it is insensitive and thoughtless. A more critical assessment would say that MPs have behaved in a manner that is selfish and venal, and bordering on corrupt. Angry? You should be. LEAF is currently challenging the UK Government’s attempts to restrict pension entitlements, pay increases (which affect pensions, as we have explained), and prospects of hard-working teachers. Can you afford not to support LEAF? Three Months FREE membership for new applicants
BECKMANN BENDS IT FOR LECTURERS’ PENSION ENTITLEMENTS On the 13th December 2001, the Advocate General concluded in the case of Beckmann v. Dynamco, Whicheloe, MacFarlane Ltd., that the contractual entitlements of National Health Service staff to their pension and lump sum as accrued in the event of their redundancy, transfers to a new employer by virtue of Article 3 of the Acquired Rights Directive. The Beckmann case however, is important not only to NHS staff, it is also important to Lecturers. That is because the pension entitlements in question, in regard of the National Health Service contracts, are virtually identical to those enshrined in the Silver Book. Indeed the pension entitlements of both groups of workers are made under the same enabling legislation; the Superannuation Act 1972. On the 4th June 2002, the European Court of Justice confirmed the Advocate General’s Opinion in a formal ruling on the matter. For those who may be interested in the detail, the full judgment can be found at www.curia.eu.int As a consequence of the Beckmann case, LEAF registered a further formal complaint against the United Kingdom, with the European Commission. We say in our complaint that the UK deliberately and intentionally circumvented Lecturers’ entitlements to their pension and lump sum, as accrued, by introducing new regulations in 1997. The new regulations allowed Further Education corporations to “choose” whether or not to meet the cost of a Lecturer’s early retirement in the event of his/her redundancy. The ECJ has now made clear it clear that, although occupational pension rights per. se. do not transfer to the new employer by virtue of the Acquired Rights Directive, a contractual term governing entitlement to one’s pension and lump sum that is triggered by a dismissal for the reason of redundancy or efficiency does. The Silver Book contains such a term and, in our view therefore, the United Kingdom has breached a protected Community law right by introducing legislation aimed at cancelling that right. It is possible that a substantial number of Lecturers will have claims to pursue if they were: a] Made redundant after the 1997 regulations came into force, b] Were employed on the terms of the Silver Book, c] Met the criteria of having reached the age of 50, d] Were not awarded early retirement. LEAF officers will be attending a meeting with the Commission in September 2002 in regard of both of the formal complaints LEAF has submitted on behalf of its members.
LEAF - Working Hard for Lecturers’ Rights
NEWS FROM THE SECRETARIAT-GENERAL We have now received official confirmation that the Commission intends to examine our second complaint concerning Lecturers’ pension entitlements. The complaint centers on what we regard as a protected contractual entitlement to a pension as accrued, if dismissed for the reason of redundancy or in the efficient discharge of the service. Changes to the regulations affecting teachers’ pensions were introduced in 1997. The new arrangements made the payment of a Lecturers’ pension, in the event of his/her redundancy, conditional upon whether the employer was prepared to meet the cost involved. We believe that the contractual entitlement protected by Community law is mandatory. The leading case on this aspect of pension entitlements is Beckmann v. Dynamco, Whicheloe, MacFarlane Limited. It was interesting to note that when the case was referred to the European Court of Justice, lawyers for the United Kingdom supported Mrs. Beckmann’s position. However, in the Beckmann case it was the private contractor and not the UK Government who would be responsible for picking up the tab. We will have to see what the Government’s response will be if they find they are directly or indirectly responsible for meeting the costs of early retirements. Over the past four to five year, a substantial number of Lecturers will have been made redundant and refused access to an early retirement pension. It may well transpire that they will have a claim to their pension and lump sum and that this will have to be backdated. We will keep members in touch with events as they progress.
Premature
Retirement
Compensation Commissioner
Diamantopoulou 14th March 2002 Dear
Commissioner, This
complaint
is
made
on
behalf
of
Further
Education
Lecturers
in
the
United
Kingdom
by
the
Lecturers’
Employment
Advice
&
Action
Fellowship
[LEAF],
which
is
a
listed
trade
union
under
the
Trade
Union
and
Labour
Relations
[Consolidation]
Act
1992.
It
concerns
the
removal
of
the
contractual
entitlement
to
a
Pension
and
Lump
sum
as
accrued,
if
having
completed
the
minimum
reckonable
service
for
pension
purposes,
the
Lecturer
is
made
redundant
or
is
dismissed
for
reasons
of
efficiency.
The
removal
of
this
entitlement
was
effected
by
way
of
a
regulation
made
by
the
Secretary
of
State
under
Section
24
of
the
Superannuation
Act
1972. The
contractual
entitlements
to
which
we
refer
are
contained
in
a
collective
agreement
protected
by
Article
3[2]
of
Directive
77/187/EEC. In
1997
the
United
Kingdom
Government
introduced
a
new
regulation
[SI
Number:
1997/311],
which
removed
the
earlier
contractual
and
statutory
entitlements.
The
regulation
removed
the
mandatory
contractual
and
regulatory
requirement
upon
the
employer
to
fund
the
additional
cost
of
the
dismissed
employee’s
premature
retirement,
and
made
this
a
discretionary
feature
of
the
employer’s
obligations
and
responsibilities. At
the
time
it
was
not
clear
whether
the
entitlement
to
a
Pension
and
Lump
sum
as
accrued
was
covered
by
the
ARD
because
of
difficulties
interpreting
the
wording
of
Article
3[3]. On
The
21st
January
2000
the
Queen’s
Bench
Division
of
the
High
Court
made
a
Reference
to
the
European
Court
of
Justice
concerning
the
interpretation
of
“old-age
benefits”
within
the
meaning
of
Article
3[3]
of
Directive
77/187/EEC.
The
case
that
gave
rise
to
the
reference,
Beckmann
v.
Dynamco,
Whicheloe,
Macfarlane
Ltd.,
raised
fundamental
issues
as
to
the
construction
of
the
Directive
and
sections
5
and
7
of
the
TUPE
regulations.
The
points
raised
by
the
Reference
would
determine
the
entitlements
of
many
older
NHS
workers
made
redundant
after
a
transfer. On
the
13th
December
2001,
the
Advocate
General
gave
a
preliminary
ruling
which
favoured
the
claimant
Mrs.
Beckmann The
contractual
and
regulatory
entitlement
to
a
Pension
and
Lump
sum
as
accrued,
as
defined
in
the
Beckmann
proceedings,
is
strikingly
similar
to
the
position
of
Further
Education
Lecturers’.
The
key
difference
between
the
Beckmann
case
and
this
complaint
is
marked
out
by
the
fact
that
the
United
Kingdom
Government
removed
the
regulatory
entitlements
enjoyed
by
Lecturers
whose
terms
and
conditions
were,
or,
continue
to
be
governed
by
the
pre-transfer
collective
agreement. The Member State did so by making a new regulation that allowed employers’ the option of meeting the additional cost of the premature retirement. THE
KEY
AREAS
OF
SIMILARITY
BETWEEN
THE
POSITION
IN
BECKMANN
AND
THAT
OF
FURTHER
EDUCATION
LECTURERS
IN
THE
UNITED
KINGDOM
ARE
SET
OUT
BELOW: 1.
In
keeping
with
the
position
in
Beckmann
–
Further
Education
Lecturers’
were
subject
to
a
transfer
of
employer. 2.
In
keeping
with
the
position
in
Beckmann
–
Further
Education
Lecturers’
contracts
of
employment
were
governed
by
a
collective
agreement. 3.
In
keeping
with
the
position
in
Beckmann
–
the
collective
agreement
was
incorporated
by
express
reference
into
their
individual
contracts
of
employment. 4.
In
keeping
with
the
position
in
Beckmann
–
a
term
of
the
collective
agreement
[Appendix
3]
made
provision
for
premature
retirement
compensation.
The
agreement
was
reached
in
1976
and
appears
to
predate
the
embodiment
of
those
terms
in
a
statutory
instrument. 5.
In
keeping
with
the
position
in
Beckmann
–-
this
contractual
entitlement
was
triggered
in
the
event
that,
having
attained
the
age
of
50
and
having
completed
at
least
5
years
service
for
pension
purposes,
the
Lecturer
was
dismissed
by
reason
of
redundancy
or
on
the
grounds
of
efficiency. 6.
In keeping with the
position in Beckmann
- in regard of Lecturers’
entitlements to pension
under the Teachers’
Pension Scheme, the
enabling legislation
is the Superannuation
Act 1972. 7.
In keeping with the
position in Beckmann
- the provision for
early retirement compensation
as described in [5],
was also embodied
in regulations made
by the Secretary of
State under Section
24 of the Superannuation
Act 1972. The regulation
was made retrospective
to the 1st April 1976.
BACKGROUND On
the 1st April 1993,
pursuant to the Further
& Higher Education
Act [1992], Colleges
of Further and Higher
Education in England
and Wales were removed
from local authority
control. As a consequence,
every Lecturer’s
employment was transferred
to his or her respective
newly formed Further
Education Corporation
[FEC]. The
change of employer
constituted a relevant
transfer for the purposes
of Directive 77/187/EEC.
It was conceded in
the case of Ralton
v. Havering College
of F&HE [1999],
which is the subject
of a separate formal
complaint to the Commission
[2001/5005, SG [2001]
A/11176], that the
College was an emanation
of the State. [Case
C-188/89 Foster v.
British Gas [1990]
ECR I-3313]. The Lecturers
concerned were therefore
entitled to rely directly
upon the ARD. It
is our contention
that Further Education
Lecturers’ throughout
the Further Education
sector, like their
colleagues in the
Ralton proceedings,
are able to rely directly
on Directive 77/187/EEC. Before the transfer, Further Education Lecturers’ employment was governed by a collective agreement known colloquially as the Silver Book. Under UK law collective agreements acquire legal force through being incorporated into individual contracts of employment. The Silver Book collective agreement is expressly incorporated into individual contracts of employment. The contracts of employment that were transferred from the local |