Framework Agreement for Overtime Payments and Annual Leave Pay in England (April 2021)
This framework agreement addresses historic underpayments of holiday pay, specifically regarding overtime calculations in England. It mandates corrective payments, aims to prevent future underpayments, and provides a clear process for resolving disputes. The agreement ensures fair compensation for employees and reduces legal risks for employers.
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Framework Agreement for Overtime payments and pay during annual leave (England) April 2021
Quick summary AfC Section 13.9 states individual holiday pay is calculated on the basis of what the individual would have received had they been at work Historically this has not included overtime, meaning holiday pay has been underpaid The national framework sets out how employers will correct historic miscalculations of overtime (and additional standard time) as part of holiday pay Employers have agreed to find a way to prevent these underpayments from reoccurring Existing ET claims will follow a separate settlement process between claimant and respondent
Background Background Legal cases taken by UNISON members means holiday pay should include regular overtime NHS Staff Council agreed to correct historic underpayments in England NHS England allocated limited finances to reach an agreement Talks with employers (England) began in December 2020 Framework agreed and published March 2021 Separate discussions will take place across the devolved administrations in Wales and Northern Ireland Scotland agreement already in place
What is the context? What is the context? Calculating holiday pay should now include overtime and additional standard time Overtime is any paid hours worked above contractual hours For NHS pay there are two definitions that cover overtime: Overtime = any pay for time above the standard FTE for the grade Additional Standard Time = hours between an individuals contract and the standard FTE for the grade Overtime is normally where full time staff work above their contract. Additional Standard Time is where part-time staff work above their contract.
What we achieved What we achieved 1. A framework for employers to remedy historic underpayments of holiday pay (corrective payments) 2. Employers will prevent these underpayments from reoccurring (forward- looking) 3. A fair process that reduces the legal risk to employers and maximises both the payments for staff and the numbers of staff who can receive them 4. Corrective payments are as close to individual underpayments as possible 5. A process that is as feasible, clear and as straightforward as possible to enable employers to implement so members know what they will get
The framework The framework Corrective payments going back 2 years based on eligibility criteria 1 April 2019 to 31 March 2020 (year 1) 1 April 2020 to 31 March 2021 (year 2) If someone is within scope and eligible for either, or both years, the pay they received for overtime or AST in each year will be multiplied by 16% (see examples on a later slide) Corrective payments will be made through payroll between April and September 2021 Payments will be subject to relevant employee deductions but not pensionable
Who is eligible? Who is eligible? Employed in the NHS as of 31 March 2021 Employed on NHS Terms and Conditions of service (AfC) Must have received payment for AST or OT on 4 separate months within either, or both, financial years: 1 April 2019 to 31 March 2020 (year 1) and/or 1 April 2020 to 31 March 2021 (year 2)
The multiplier The multiplier 16% 16% The multiplier is a percentage of actual pay for overtime or AST, over the 2 preceding financial years This corrects historic miscalculations of holiday pay The multiplier for calculation of back pay was chosen to reflect several variables including: NHS holiday entitlements The back pay period Numbers of people in scope and eligible and Overall cost of the financial settlement
Examples Examples (scenarios) A part time ambulance paramedic who worked additional standard time (AST) in year 1 but not year 2, and was paid for this AST in at least 4 months of year 1, would receive 16% of those earnings for year 1, but not year 2. A full time cleaner who worked overtime in year 2, but not year 1, and was paid for this overtime on at least 4 months of year 2 would receive 16% of those earnings for year 2, but not year 1. A laboratory technician who worked overtime in year 1 and year 2, and was paid for this overtime on at least 4 months in year 1 AND year 2, would receive 16% of those earnings for both years.
Examples of back pay amounts Overtime or Additional Standard Time paid and within eligibility criteria Expected Gross Payment (16%) 500 80 1000 160 1500 240 2000 320 5000 800 10,000 1,600
Summary Summary The framework: is the best option to resolve historic underpayments is based on principles of fairness, logic, simplicity and feasibility recognises the limitations of the legal approach and seeks a collective solution means payments are as near to individual calculations as possible is as consistent with the Scotland agreement as possible
Want to find out more? National framework is available along with FAQs https://www.nhsemployers.org/pay-pensions-and-reward/nhs-terms- and-conditions-of-service---agenda-for-change/nhs-terms-and- conditions-of-service-handbook/overtime-payments-and-pay-during- annual-leave UNISON webpages have information, branch resources, leaflets and a video podcast explaining the framework https://www.unison.org.uk/at-work/health-care/big-issues/holiday- pay-and-overtime-resources-and-faqs/
