Average Pay on Annual Leave (Holiday Pay) in Royal Mail Group

Average Pay on Annual Leave (Holiday Pay) in Royal Mail Group

Further to LTB 243/21 circulated on 16th June 2021, I am pleased to report that the attached Agreement was endorsed by the Postal Executive at a meeting in Birmingham on 9th June 2021.  This is a National Agreement for Royal Mail Group (excluding PFSL) for average holiday pay for non-contractual overtime.

When considering this Agreement, it is extremely important that Branches do this in the context of our journey to reach this point as opposed to trying to benchmark against cases in other businesses.  Each court case has been settled on its own merit and the definitive issue at the crux of the matter is always what does regular look like in that specific circumstance.  For total clarity, there is no specific definition of what constitutes regular overtime.

Against that backdrop, this historical passage has been ongoing since 2014 when it was reported in LTB 587/14 that a meeting with the company’s senior management team had been arranged to discuss the basis of our claim and to try to reach a settlement.

There was very little case study to consider at this time and the position of the CWU and RMG was widely reported in LTB 064/15 circulated on 2nd February 2015 along with a draft copy of a letter that was to be sent to members’ home addresses as an insert in the Voice.

The letter provided a comprehensive overview of the situation and also advised members that although the Union was pursuing this matter with the employer on their behalf, it did not prejudice their individual right to take their own course of action.  The Union however would not be able to provide legal advice to individuals who wished to pursue this matter themselves.  It was made clear that meetings with Royal Mail Group were being held and the respective lawyers were in discussions on finalising Employment Tribunal test cases to protect the legal position of CWU members.  Basically we were waiting for legal case study to inform an agreement with RMG.

Whilst the test cases were initially slow to emerge and have built up latterly, they were still based on individual businesses and their particular circumstances, allowing RMG to argue that the issue of regular and reference periods were still indecisive.

Following the carriage of Motion 60 at Postal Conference in 2018, reinvigorating progress in order to force RMG’s hand became our priority.  It was agreed to consult with Branches to find suitable test cases and once identified we would legally support members making an Employment Tribunal claim.

Our ongoing strategy was devised to increase the pressure on the company to reach a collective national agreement.  We therefore embarked on a complex campaign to maximise the number of claimants nationwide.  This moved us to another level by encouraging as many cases to be started as possible in order to form a group claim against the business.  Branches were informed of this strategy in LTB 123/19 that also contained a ten step process and supporting flowchart to assist in processing these claims.

As claims began to be submitted in ever increasing volumes, Royal Mail Group started to make financial offers at the ACAS stage and significant numbers of members benefited from settlements.  The vast majority were part-time delivery members although the process was enacted by members across all functions and most Royal Mail business units.  As their costs began to increase, Royal Mail Group made a decision around October 2019 to stop making offers at ACAS for any claims that were registered after this time.

The focus then became maximising the number of claimants through Branch involvement that would progress to the Employment Tribunal stage.  To supplement this the DGS(P) Department also met with the Legal Services Department and Unionline to make preparations to commence a group claim and identify a number of Lead Claimants.

The situation was complicated as cases in both Scotland and Northern Ireland are subject to a separate legal process from those in England and Wales with the latter cases initially scheduled to be heard at the Bristol Employment Tribunal in April 2020.

Royal Mail Group came back to the negotiating table and a few meetings were held prior to the outbreak of Covid 19. The pandemic however meant that the Tribunal in Bristol was postponed until 21stJune 2021 although the pre-hearing was held on 2nd June 2021.  At this time there were 5953 cases in England and Wales that were included in the group action and obviously many more have been registered in Scotland and Northern Ireland.  It is estimated that over 7,000 Employment Tribunal cases have been registered nationwide and this is a testimony to the hard work that our Postal Executive members, Field Officials, Branches and Representatives have put into promoting the issue of average pay on annual leave.

Following the endorsement of the Pathway to Change Agreement on 3rd February 2021, an approach was made by Matt Newman, the Chief HR Officer RMG to commence dialogue again with the aim of reaching a national agreement prior to the Employment Tribunal in Bristol.  This was an opportunity that had to be taken and negotiations then commenced in earnest and it soon became clear that there was a refreshing approach to the talks that had not previously been evident.

Branches will understand that the key factor in these talks continued to relate to what defined regularity.  Additionally, whilst the European Directive element of holiday pay applies only to the first twenty days of annual leave, it was important to test this point particularly in terms of our part-time members who, in the main, are the group performing the most overtime.  Part-time members in particular have been used as a flexible resource by the business for far too long and this was highlighted during negotiations.  Back pay was also a major issue and in particular the length of the period and the calculation involved.

The Negotiators Agreement represents a major step forward for the Union.  I believe it also reflects the level of commitment from all of our representatives to reach this point.  Branches will see that the following have been achieved:

  • An agreed understanding of what constitutes regular overtime.
  • An agreed calculation for the payment of holiday pay.
  • Defined reference periods for the calculation of regularity.
  • All overtime to feature in the calculation once the agreed regularity threshold has been met.
  • A process to allow interim and longer term payments to be made.
  • Full-time to be paid for the first four weeks of holiday each year.
  • Part-time to be paid for all contractual annual leave up to full-time hours with hours above full-time being paid for four weeks.
  • Maternity, paternity, SPL or adoption leave for the purposes of the regularity threshold, it is agreed to pro-rate the qualifying period.
  • A maximum of two years back pay subject to meeting the regularity threshold.

Our legal advisers believe that achieving recognition for part-timers up to full-time hours to receive average pay for all their contractual hours and the section on maternity, paternity, SPL or adoption leave are major achievements that would not be reached in a courtroom.  Equally despite RMG having given great publicity to the deal they reached with Unite we have achieved a far improved agreement.

In essence for average holiday pay to make a real difference one has to be performing fairly high levels of overtime, which in our industry has always been available.  This Agreement means that anyone performing 8 hrs per month or more throughout the year will receive an average of all overtime worked in their annual leave ‘top up’ payment.

Ideally the DGS(P) Department would have liked to have circulated the proposed agreement before today but had to conclude further discussions concerning obtaining an agreed process for addressing the high volume of individual cases that are actually at the Employment Tribunal stage.  Since the proposed agreement was endorsed by the Postal Executive there have been intense discussions involving the DGS(P) Department, Legal Services, Unionline and our Solicitors with Royal Mail Group and their Legal counterparts.  These talks have resulted in the terms of a draft order being agreed as well as a full supporting legal document for the agreement on holiday pay.  To be clear the draft order allows for:

  1. The claims of the lead claimants to be stayed with the final hearing listed on 21st\ June to be vacated (The lead claimants have all agreed to this).
  1. If the proposed agreement is ratified, the Union will then send a letter to all claimants asking how they would like to proceed and whether they now wish to withdraw their claim for holiday pay. Back payments to an individual for arrears of holiday pay will be conditional on withdrawing the Employment Tribunal claim.  There will be a reasonable time-frame for members to return the forms.
  1. The Union will then communicate all of the responses received to the Employment Tribunal and not provide legal support and assistance to the remainder.

In order to allow time for communications and a Branch ballot to be enacted, this is a process that had to be agreed and finalised but this does not mean that the Union has given up the cases in the event that the proposed agreement is not ratified.

I am however confident that as over 70,000 of our members perform regular non-contractual overtime this Agreement will be especially welcome and benefit members going forward.  It will also undoubtedly drive the right behaviours in terms of increasing the contractual hours of part-time members.  I have no hesitation in recommending this comprehensive Agreement to Branches and members for acceptance.

A further communication regarding the details and timescales for the Branch ballot will be circulated in due course.

In conclusion, I would like to place on record my thanks and appreciation to all of the Representatives and members who have promoted Union policy in this regard as well as Tony Rupa and the team in the CWU Legal Department, who along with their colleagues from Unionline, have supported the DGS(P) Department throughout the Employment Tribunal application/hearing process and to Ivan Walker, QC for his support and early advice which laid an invaluable foundation on the Union’s approach.

Any enquiries in relation to the content of this LTB should be addressed to the DGS(P) Department.

Yours sincerely,

Terry Pullinger
Deputy General Secretary (Postal)

21LTB245 Average Pay on Annual Leave (Holiday Pay) in Royal Mail Group

Attachment to LTB 245-21 Final VERSION AMENDED 160621 Negotiator’s Agreement – public summary of holiday pay deal

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