In response to the derisory pay offer detailed in the NTUS response to the Financial Report dated 6th July, we have now submitted the formal NTUS core pay claim.

At a meeting with management yesterday we presented a joint claim for a 1 year pay deal greater than the RPI August 2010 figure based on the following criteria: -

The pay claim is submitted in the context of what has been the second year of record profits for NATS and the second year of record dividends paid by NATS.

The pay freeze which has had to be endured by our members contrasts even more dramatically with the ‘eye-watering’ bonuses and remuneration received by the two out-going Chief Executives. This pay claim also relates to a period where over the year the workforce has reduced by more than 336 staff.

Against the backdrop of the above there is a need for NATS to recognise the fundamental contribution which our members have made. This includes:-

• Delays are at an historic low with NATS now recognised as one of the top three performers within Europe as opposed to being amongst the bottom three;
• The successful delivery on time and to budget of the two-centre strategy with a minimal impact upon customers;
• The maintenance of an excellent safety record;
• A significant reduction in the cost base of the organisation;
• The extension of a number of crucial contracts including Manchester and Luton;
• The winning of new business;
• The introduction of EFPS;
• The continued movement towards an acceptable settlement as part of CP3.

Management’s response was less than enthusiastic and no improved offer was made.

We expect that the negotiations will be difficult and protracted.

We meet again on 1st September.

The July 2010 pay brief can be downloaded HERE.

The full result for each is given below: -

We now expect that the 2% pay increase, and all back pay to 1st January 2009, will be applied in July salaries.

The August RPI figure will not be known until mid September, therefore it is anticipated that further communication with the outcome of this will be issued in the second half of September, with any payment due, as calculated below, being made in October or November at the latest.

If RPI in August 2009 is more favourable than -2.8% (i.e. -2.7% to 0%, or a positive value), employees will receive a backdated increase for every 0.1% by which the RPI is more favourable up to a maximum of an additional 1%.  This will also be backdated to 1st January 2009.

Ian McNeill
NTUS Co-ordinator

The NTUS Pay Circular can be downloaded HERE.

Both the ATCO and ATSS Branches of Prospect have voted to accept management’s pay offer as has PCS. 
The results for the ATCO Branch are as follows:-

1924 papers sent out

1365 papers returned

1364 papers considered for vote

724 YES

640 NO

1 SPOILT

71% papers returned

53% VOTING YES

47% VOTING NO

 
Firstly I would like to thank members who took the opportunity to cast their votes in what is a very respectable turnout in a ballot of this nature.  The closeness of the vote serves to reinforce and underpin our message to management “there are no grounds for complacency”.

The feed back from our membership has shown real anger at the decision of the Company to pay £43.5 million in dividends to shareholders and at how the Company is being run.  Against the backdrop of further announcements with regard to further cost reductions there is a real concern amongst our members about the future of NATS. 

Industrial relations can best be described as fragile and against the backdrop of the above results, management need to be reminded of and held to their responsibility in terms of their commitment to staff and ‘working together’.

Yours sincerely

GARRY GRAHAM
National Secretary

Does the ballot require all parts of the NTUS to vote ‘Yes’ in order for the deal to be accepted?
Yes. The ballot process is similar to that of the recent pension vote. In order for the deal to be accepted it requires all of the 3 trade groups within NATS (Prospect ATCO, Prospect ATSS and PCS) to vote in favour. As before there will be individual ballot papers for each branch sent out to members.

Why are the union recommending a 2 year deal?
Firstly, NATS made it quite clear that if we wished to receive any form of pay offer from the organisation then the unions would have to accept a deal that covered at least a 24 month period as this gave the company some certainty of costs in the current economic climate. This of course is not necessarily a reason for the unions to accept a 2 year deal, however, against a backdrop of RPI forecast to be circa -3.5% in August 09, the executive felt that on this occasion this was an acceptable position.

It’s important to note that whilst a positive RPI figure means that the NATS enroute charging mechanism allows for a possible increase in charges to the airlines, a negative figure means that the company would have to reduce its prices. The long term union policy on basing pay claims on RPI is a sound one however it would be untenable to change this simply because certain economic  circumstances weren’t in our favour at the time of a pay negotiation. Therefore the possibility of achieving any form of pay rise in August 09 if RPI was negative would be extremely challenging and NATS could well base a valid argument around the necessity for a pay cut if cost could not be removed from the business in other ways. The BEC believe that the current offer gives us the best opportunity of avoiding such a situation and indeed if RPI appears to be worse than forecast could result in a better than RPI pay award over a 24 month period.

Another point we considered was that if we did a 2 year deal and the total reward was backdated to January the 1st 2009,  this allows for the entire package to offer an uplift in pensionable pay. The cap detailed in the Memorandum of understanding, in terms of CAAPS ,would not come into effect (the cap for pensionable pay 2009 is currently set at 5.3%). If a pay award was given in January 2010 and the previous August RPI was anything less than – 0.4% then this would mean that any uplift would be non-pensionable.

What do I do if I don’t receive a ballot paper?
All members should receive a ballot paper in time for voting well before the close of the ballot. All ballot papers are sent out together so if your colleagues have received one and you haven’t then please contact the Prospect office in Chertsey on 01932 577011 and they will be happy to send a replacement. Your ballot form will be sent to your home address that our records have and so please take time to check these on our website and update them if required.

Will the 2% automatically be taken back if RPI in August 09 is worst than -3.5% ?
No. The union have committed to discuss the financial position of the company with management in this situation however this does not mean that you will lose any money received as part of this deal automatically.

The company has paid a large dividend this year, why should we accept this offer?
The dividend was paid as a result of the sale of the Heathrow old control tower. This is a one off payment and is not a recurring  annual cost to NATS unlike any pay offer. As you will see from previous NTUS statements, the unions made strong representations to management about the amount of money leaving the business as we are in opposition to this. This is not a decision that we had any involvement in , nor could have done, however it should also be remembered that as shareholders ourselves then we too have taken a share in the dividend pay out and this was awarded to us in April 09 pay cheques. The pay out also gave the NTUS a strong bargaining tool to use with NATS to back up our argument that all employees deserved a pay award and was instrumental in terms of our negotiating power.

When will we receive the money in the event of a ‘yes vote’?
It is hoped that the money would be in July or August pay however this is subject to a number of factors and we’ll update you with exact details when appropriate.

What are the details of our sectional claim and when this will be resolved?
The sectional claim was submitted last September and can be downloaded HERE. At the moment there are no proposals being made on progressing the items detailed as they have not formed part of the pay proposal from NATS. This is because the offer is no ’strings attached’ in it’s style which offers a basic rise in pay without any changes to working practises or terms and conditions. Indeed the offer was based on the NTUS agreeing that elements of the respective sectional claims may not be addressed.  The company has however indicated that they may wish to look at some of the issues before September this year but at the moment there are no meetings scheduled to move this forward and there is no agreement that this will definitely take place. The BEC will keep members fully informed if that changes and as normal any amendments to terms and conditions to would be subject to a ballot.

Stuart Osman
Chair Salaries & Structure

NATS Core Pay Negotiations

As you may know Prospect and PCS have been involved in detailed ‘core’ pay negotiations with NATS. These have been some of the most difficult and protracted pay negotiations that the NTUS has been involved in. As a result of those negotiations, management have now put a final offer to the unions for our consideration. This circular sets out the background to negotiations and sets out the timescale and process for consulting with members.
Negotiations on core pay started towards the end of 2008. Whilst the unions have sought to take forward the discussions as speedily as possible, their protracted and difficult nature has inevitably impacted upon the timescales that we ideally would wish to have achieved.

Management’s initial position with regard to negotiations was that their preferred option was a ‘pay freeze’ for all staff as part of any ‘core’ settlement. By pay freeze management were effectively suggesting no increase to base salaries or allowances as part of this year’s settlement. The trade unions robustly responded to this suggestion and indicated to management that should they seek to go down this route it would immediately result in a ballot of our members for industrial action. In subsequent discussions management have tabled a number of offers which included a combination of consolidated and non-consolidated, pensionable and non-pensionable increases which were regarded as derisory by the unions. Added to this a range of unacceptable strings and conditions were attached to these offers which the unions rejected as unacceptable. Ultimately management made a final offer to the unions which we agreed to take back to our respective Executive bodies recommending acceptance.

The ATCO Branch Executive, the ATSS Branch Executive and PCS Executive have now had the opportunity to consider management’s final offer. After considerable debate and discussion the Executive bodies have now agreed to recommend management’s final offer to the membership.

All the union executives believe that management’s offer is the best which is achievable by negotiation. We also believe, given the current economic climate, that management’s offer is acceptable and are recommending that members vote in favour.

Management’s Offer

Whilst the trade unions had submitted a pay claim in September of last year based on the notion of a one year pay deal it became apparent during negotiations that management would only table a consolidated and pensionable pay increase which might be seen as acceptable by us on the basis that it was a two year pay deal taking us through to the end of 2010. Management’s rationale for this was the unique set of economic circumstances in which we currently find ourselves. Whilst August 2008 RPI inflation was running at a relatively high level of 4.8% all major commentators predict August RPI inflation for 2009 to be running at a negative figure. Whilst there is a range of predictions for August 2009 RPI inflation, commentators have been consistent in their predictions of a negative figure and indeed the Treasury, Bank of England and Chancellor are predicting a negative RPI figure for September 2009 of –3%.

Against that backdrop NATS management have raised their severe concerns as to the impact that this will have on prices and income. They have described to the trade unions what they see as a double whammy with the impact of reduced flight volumes and at the same time a reduction in the costs that they are able to charge customers. Inevitably, as part of this, management have also raised their concerns about rising pension costs and their need to address the current deficit within the Pension Scheme.

Whilst the trade unions have been robust in our response with regard to these challenges, not least giving the likely profits to be made by NATS and the dividend to shareholders, we have had to be alert to the impact that falling revenues may have in terms of its impact upon our membership. We made it clear to NATS that the strings that they were seeking to attach to any pay deal in terms of changes to working practices and terms and conditions were completely unacceptable.

Against the backdrop of the above, management put a proposal to the unions effectively based upon a 2 year pay deal using a ‘blended’ rate of RPI. The unions made it clear to management that we would not wait until September (when the August 2009 RPI figure is to be published) in order to agree a consolidated and pensionable pay increase for staff. We also made it clear that any pay increase using a ‘blended’ formula had to be fully consolidated and pensionable and backdated to January 2009. As of part of the discussions we also made it clear that whatever the negative figure for RPI as of August 2009 we expected a guaranteed minimum pay increase to be paid on the completion of a ballot and for that increase to be backdated to January 2009. Very detailed and difficult negotiations took place around these issues.

During these negotiations management stated that whilst the unions were seeking a guaranteed minimum increase for staff, that they were seeking a cap on any settlement over the two year period of 3%. Management have now put a final proposal to the unions which includes the following elements:-

• A consolidated and pensionable increase to pay and pay related  allowances for all negotiated grades of 2% backdated to 1 January 2009 for a period to the end of 2010.
  
• If August RPI in 2009 is less negative than –2.8% staff will receive a backdated increase for every 0.1% by which RPI is more favourable up to a maximum of an additional 1%. In effect this makes it possible for a maximum pay increase at 1 January 2009 of 3%.
  
• It is a condition of the deal that should RPI prove to be as or more negative than -3.5% in August 2009 that NATS and the NTUS will enter into early discussions to seek to address this issue.

Projection of RPI versus possible Consolidated Core Pay Increase

We recognise that this is a very different way for addressing core pay within NATS. This is as a result of the unique set of circumstances in which we find ourselves and the impact that negative RPI would have upon prices and income for the organisation.

Conclusion

Negotiations this year have proved to be extremely challenging. They take place against the background of a number of organisations within aviation seeking to impose pay freezes and pay cuts in real terms upon staff. It is clear as part of this that the preferred option of the Management Board was that there should be no consolidated or pensionable pay increase for staff over the next two years. Indeed in some discussions NATS had floated the concept of a pay cut for staff in 2009. This proposal met an extremely robust response from the trade unions when we made it clear that any such approach would be challenged both legally and industrially.

The trade unions believe that the package proposed by management will in effect deliver an at least RPI pay increase to our members over the period 2009/2010. Most commentators predict August 2009 RPI to be significantly more negative than –1.8% with many commentators predicting RPI inflation to be more negative than –2.8% whereby over the two year period this pay deal would deliver pay increase in excess of RPI inflation. Indeed the most recent predictions by the Treasury show RPI inflation running at a net figure of 1.25% over the two years i.e. projected negative RPI for this year and projected subdued but positive RPI in 2010.

The trade unions believe that the above settlement is the best achievable by negotiation. This settlement provides for a front loaded payment linked to RPI inflation over the two year period. The trade unions have been successful in rejecting and severing the conditions and strings that management attached to previous offers in relation to changes in working practices and terms and conditions. In that context and taking into account broader trends within the UK economy and aviation in particular the unions are recommending that members vote to accept the offer. The ballot process will commence from the 21 May concluding on the 18 June.

Yours sincerely

GARRY GRAHAM                               PAUL SMITH
Prospect National Secretary           PCS National Officer

The original document can be downloaded HERE.

With respect to performance related pay the ATCO branch still maintain a strong opposition to bonuses attached to roles which are solely operational. However, if an employee has a contract which requires them to achieve targets set for them to gain a bonus payment, we believe it should be paid if these are met. These targets should be stretching and not expected as part of the normal functions of an employee’s role. What could be called into question is the level of the bonuses paid and whether or not they are proportionate to the additional benefit brought to the business.

The ATCO Branch will continue to campaign with NATS and its Shareholders (including the Govt) to ensure that promises made to members through pensions and our negotiated terms and conditions are not put at risk or eroded in the relentless pursuit of profit and dividends.