Cabinet agrees Birmingham Contract – impact on low paid reduced

By on 14/03/2011 in News

Proposals to make employee contracts fit for the challenges facing the public sector have today (March 14) been agreed by Cabinet, with a number of amendments designed to mitigate the impact on the low paid.

The purpose of the Birmingham Contract is to modernise the council's employment contract, increase staff flexibility and strip out old fashioned conditions and working practices and allowances.  It will also contribute to the budgetary savings the Council has to make.  However Cabinet shared Cabinet Member Alan Rudge's concern for the impact the proposals had on the income of the lower paid, and he undertook to bring proposals forward to mitigate losses.

Following the call-in by the Overview and Scrutiny Committee, the Cabinet has further developed its approach by incorporating various amendments from Cllr Rudge.

This means that the Birmingham Contract will not be implemented until November 1 of this year.  Therefore, earnings will remain at the current rate until October 31, when core allowances (i.e. alternating shift payment, irregular and unsocial hours payments, and weekend work enhancements) will be removed.

Mitigation arrangements will be applied for employees in Grades 1-4 in respect of core allowance payments. Employees in receipt of these allowances within Grades 1-4 will not lose more than 10 per cent of their core salary and allowances for the mitigation period.  The mitigation arrangements will apply for a 12-month period until October 31, 2012.

The Birmingham Contract addresses the dual task of being able to use staffing resources flexibly and of ensuring that employee costs are value for money. They also challenge many of the historic allowances which may well have once been justified but are not sustainable in 2011.

The council has reviewed employee allowances and terms and conditions and the proposals aim to give the council's workforce the flexibility to meet the demands of the future.

The council has been consulting extensively on the proposals with the Trades Unions since July 2010. Consultation with employees has been running since December 2010, via individual and team meetings and a survey.

The proposals now agreed will ultimately result in annual savings of £9.7million and will mean, in addition to the abolition/amendment of core allowances:

• The removal of some local allowances and practices to ensure compliance with employment legislation
• Amending car allowances so they reflect the HM Revenue and Customs recommended rates, rather than the more costly local government rates
• Ensuring free car parking is only provided to approved car users
• The introduction of broad job groups to create a more flexible workforce which will be able to move around the organisation more easily than before - reducing the future risk of redundancy
• The issuing of a new contract of employment incorporating the changes

Employees will continue to receive payment for night work, although the qualifying hours for payment have been altered slightly.

Similar arrangements are being put in place for JNC Chief Officers' terms and conditions and proposals will be put to the JNC Panel.

Cllr Alan Rudge, Cabinet Member for Equalities and Human Resources at Birmingham City Council, said: “There is a clear need to bring our organisation into line with other leading employers and the new Birmingham Contract will make the council more resilient to future pressures, through the reduction in costs and the introduction of broad job groups - which break down an historic silo approach and give employees more flexibility to move around the organisation.

“In the current economic climate, we fully acknowledge the need to offer a level of mitigation to those who will feel the greatest impact as a result of these proposals. As a responsible employer it is only right we do all we can, and that is why we have amended the contract.

“The greater workforce flexibility the contract offers us will enable the council to make best use of the skill, knowledge and experience of its people and, in turn, this will help the organisation to continue to meet the needs of Birmingham's residents.”

Notes to editors

The Birmingham Contract proposals cover around 26,000 Birmingham City Council employees.

The proposals relating to allowances (alternate shift, unsociable hours, weekend working) affect everyone who is employed by the council on NJC terms and conditions of employment (the majority of the council's employees), except those directly employed by schools.

The other Birmingham Contract proposals affect everyone who is employed by the council on NJC terms and conditions of employment (the majority of the council's employees) and JNC Chief Officers.

Teachers and people who are directly employed via schools are not affected by the Birmingham Contract proposals.

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