University Gazette, 12 July 2006
New Pay and Grading Structure for University Staff
1. The National Framework Agreement on salary 'modernisation' in the higher education sector was concluded between the Universities and Colleges Employers' Association (UCEA) and trade unions as part of the negotiations on the 2003 salary settlement. In line with the agreement universities are developing and implementing locally appropriate pay and grading structures for all relevant staff by a deadline of August 2006, within broad principles specified in the agreement.
2. Council and the Personnel Committee have considered the implications of the agreement for Oxford, and have approved a new pay and grading structure for university staff for implementation from 1 August 2006. The Personnel Committee's proposals were developed through partnership working with the representatives of the recognised trades unions, and in consultation with other interested parties within the collegiate University to ensure that the proposals reflect local needs and aspirations.
3. Council and the Personnel Committee recognise that the independent colleges are not bound by the National Framework Agreement. However, any changes to the University's salary arrangements would have potential implications for the colleges in respect of joint appointments. The new structure described in this supplement has therefore been developed in consultation with representatives of the Conference of Colleges, as well as with the Oxford AUT. 1
4. Members of the University will also be aware that Council has established a separate Task Force on Academic Employment to undertake a wide-ranging review of key academic staffing issues. Council and the Personnel Committee have considered the interaction between work on implementing the National Framework Agreement by 2006 and the longer time scales for the task force's work. Council shares the committee's view that it would be extremely damaging reputationally if this University were not able to meet the August 2006 deadline for implementing a new academic pay structure, and that delays in this area could well hinder progress on salary reform for other staff groups, as well as depressing morale among academic staff. For this reason the revisions to the academic structure have been developed in such a way as to satisfy the agreement while being sufficiently flexible to accommodate possible future developments which might emerge from the task force.
5. This supplement sets out the background to the National Framework Agreement; the rationale behind the new salary structure; and the process by which it was designed.
Existing pay and grading arrangements at Oxford
6. In common with most universities, many of Oxford's current salary arrangements are derived from national pay scales and reflect a number of uncoordinated job evaluation processes and outdated national agreements on terms and conditions of employment. Over the years these structures have been modified to meet local needs. The result is a plethora (100+) of highly complex salary scales, with staff groups effectively operating in separate 'silos', and a high administrative overhead to manage these separate arrangements. Oxford's academic salary arrangements are distinctive and particularly complex.
The National Framework Agreement
7. The pay awards for 20034 and 20045 were conditional on acceptance of a national 'modernisation' framework. The agreement seeks to resolve a number of major long-running issues within higher education, including creating flexible pay structures which meet the requirements of equal pay legislation (underpinned by the local use of a single institution-wide job evaluation scheme), formal recognition of market factors and individual contribution (in addition to length of service) to determine individual pay, and tackling the problems of low pay. Significantly, the agreement enables individual universities to determine pay and conditions to meet local institutional needs within broad principles.
Objectives of a new salary structure for Oxford University
8. The overall aim of the new structure for Oxford is to ensure that the University is able to recruit, retain and motivate staff of the calibre required in all categories of employment. Specifically, the new pay and grading structure aims to:
New salary structure
9. The new structure consists of a single, ten-grade structure for all university staff from porter to and including lecturer/academic-related grade 5/research staff grade III. This is set out in Annexe B.
10. The new pay structure will be implemented with effect from 1 August 2006. The salary rates shown in Annexe B are those at 1 August 2005 and do not take into account the annual cost of living review due in 2006 (on which see paragraph 13 below).
11. It is envisaged that, for the time being at least and pending further discussion by the task force, discretionary payments beyond the maximum of the new lecturer scale would continue to be available to lecturers in acute recruitment and retention cases.
12. The National Framework Agreement does not cover clinical academics, readers and professors, or senior academic-related staff in grades ALC6 or RSIV. Council and the Personnel Committee have agreed that interim adjustments to the reader and professor scales would be appropriate given the changes to the lecturer scale. Other salary arrangements for senior staff (including professors/ALC grade 6/RSIV) will continue as at present (i.e. individual salaries with biennial gathered field reviews for ALC6 staff and distinction awards for professors (and readers)).
National salary increases for 20069
13. The proposed national pay increases for 20069 for non-clinical staff are as follows:
August 2006: greater of 3 per cent or £515
February 2007: 1 per cent
August 2007: 3 per cent
May 2008: greater of 3 per cent or £420
October 2008: greater of 2.5 per cent or RPI (as at September 2008)
The academic trade union is balloting its members on this proposed national pay agreement. The support staff unions are consulting their members, with a recommendation to accept. Subject to approval by the unions concerned, and by Council, the pay rates in Annexe B will increase in line with the rates above.
How the new salary structure was developed
'Partnership' and consultation
14. 'Partnership' working with staff representatives is a key principle of the National Framework Agreement and this approach has been a distinctive feature of the development of the new arrangements at Oxford. In addition to the usual channels for consultation with divisions, departments and faculties, there has been intensive consultation with staff representatives, and a joint steering group of management and staff representatives was set up to guide the development of the new salary arrangements for university support staff. There has been close cooperation and consultation with representatives of the Oxford AUT and their regional officers. Each of the recognised trades unions (AMICUS, AUT, and UNISON) has balloted its membership on the new salary structure. These votes have all shown majorities in favour of the proposals for local implementation of the National Framework Agreement.
15. It has already been noted that the independent colleges are not bound by the National Framework Agreement, but that any changes to the University's salary arrangements would have potential implications for the colleges in respect of joint appointments. Colleges have been consulted individually on the changes to the lecturer scale and collectively via the Conference of Colleges. The Chairman of the Estates Bursars' Committee and the Estates Bursar of Lincoln have worked closely with the officers of Personnel Services on the development of the new lecturer scale, and in particular on the financial implications for the colleges.
16. Consultative meetings to explain the new salary arrangements to staff and their departments have been held during recent weeks, and a web site with relevant information has been set up (http://www.admin.ox.ac.uk/ps/hera/).
Job evaluation and HERA
17. A single, analytical job evaluation scheme is a prerequisite for developing a common salary structure which meets the requirements of equal pay legislation as it provides the only consistent basis for assessing the relative size of all jobs within an organisation. HERA (Higher Education Role Analysis) is a job evaluation scheme which was developed specifically for the higher education sector. It has been tested extensively both within the sector and within this University, and piloted jointly by a group of departmental administrators and staff representatives before being endorsed by the Personnel Committee. HERA is being used by the majority of UK institutions, including the University of Cambridge.
18. The new salary structure was developed on the basis of HERA analysis of a representative cross-section of jobs within the University, covering all staff groups. Staff and departmental representatives were actively involved in the selection of the sample and in reviewing the job evaluation results. The results show a strong correlation between job evaluation scores and current grade. This reflects the high degree of consistency in existing local grading processes. These results, together with feedback from the consultation, suggest that radical change to the broad grading structure is not warranted. However, there is a need to rationalise the grades across the different staff groups, for example by combining clerical, technical and ancillary grades at the same level and adjusting salary ranges accordingly. The HERA analysis also highlighted the need to revise the salary levels for some grades (particularly in the academic-related structure) in order to try to reduce the excessive overlap between some grades so that the salary for the grade is more consistent with the size and complexity of the job.
19. The modest reform of the lecturer scale is intended to ensure that the basic requirements of the Framework Agreement are met, and to provide salary increases for the generality of academic staff, while being sufficiently flexible to accommodate possible future developments which might emerge from the task force.
20. In view of the extensive benchmarking that has been carried out, staff will transfer to the new structure by a process of mapping old grades on to new, without the need to carry out job evaluation of individual roles, although there will be an opportunity for individuals to request a review of their assimilation grade. Staff will assimilate to the new grade at the nearest (higher) point according to their current salary. All staff will receive an individual letter explaining how they will be affected by the new salary structure.
21. The new salary structure for Oxford lecturers is shown as grade 10a in Annexe B. The rates are those which apply from August 2005 and are for a notional combined college/university stipend. The 2006 cost of living settlement (see paragraph 13 above) will be in addition to these rates.
22. The principal features of the new lecturer scale are as follows.
23. The University Corporate Plan highlights the low level of certain academic salaries in comparison with other leading international universities. The Personnel Committee has therefore sought to improve salary levels for the generality of academic staff by raising the joint maximum (noting that the task force has a remit for a more thoroughgoing review of remuneration issues). Simple translation of the current joint maximum at August 2005 rates (£47,078) to the national pay spine would have placed the combined salary at the top point of that spine, i.e. point 51 (£47,685) or an increase of 1.3 per cent. Under the structure approved by Council and the Personnel Committee, the new joint maximum is a further 3 per cent higher, i.e. placed at the equivalent of an extra spine point 52 (i.e. £49,116). More than 70 per cent of lecturers are currently on the maximum point of the university pay scale and will benefit immediately from the increase in the joint maximum, while those on the lowest points will see a substantial increase in salary. This represents a significant investment on the part of the University and of the colleges, which will bear some of this additional cost.
24. The Personnel Committee was also sensitive to concerns which have been expressed across the collegiate University about the differences in the combined stipend of lecturers currently below the joint maximum, which stems from the variations in salary scales used by individual colleges. It would have been possible for the University to have adjusted its existing salary scales in line with the National Framework Agreement (removing the bottom points and increasing the university maximum as now agreed) and for colleges to have continued their existing arrangements. However, the committee was keen to explore the possibility of promoting convergence across the collegiate University towards a common combined salary scale for lecturers. During 20056 the colleges were consulted individually on proposals for revision of the lecturer scale (new grade 10a), and collectively via the Conference of Colleges. In the light of general support for increasing the joint maximum to spine point 52, and of making this new point available to all academic staff from August 2006, the Conference of Colleges invited the Chairman of the Committee of Estates Bursars (Dr Knowland, Brasenose) and the Estates Bursar of Lincoln (Mr Knowles) to take forward discussions on the financial implications of the proposals.
25. Discussions with the two bursars indicated that a move towards a common salary scale could only be achieved with the consent of individual colleges and would have to address the financial implications for individual colleges, which would vary because of the different salary scales they currently use. Alternative salary splits of the combined stipend were explored. The model for the division of stipend for the main categories of lecturership which has been agreed is shown in Annexe A: it is estimated that the additional costs of the new structure over a typical career would be shared almost equally between the University and the colleges.
26. Consultation with the colleges indicated general support for the model salary scale for new appointments effective from 1 August 2006 (although the decision as to whether to adopt the model rests with individual college governing bodies). With regard to current staff, it was recognised that moving staff from their current college scales to the new ones would depend on how salaries at individual colleges were determined, and that colleges would have to address each case individually. The bursars also favour adopting a common date for annual increments for college stipends to apply irrespective of the date of initial appointment, or the post-holder's birthday.
Agewage scales and the implications of age discrimination legislation
27. Oxford University (along with its colleges) is distinctive in having hitherto retained the national agewage scales for lecturers long after other universities discontinued this linkage. A feature of these scales is a link between salary and age at appointment, although in practice over recent years this linkage has loosened in response to market pressure to recruit and retain outstanding academic staff, such that the link between age and pay is effectively a minimum, and there is flexibility in appropriate cases to pay the rate necessary to recruit or retain academic staff. In view of forthcoming legislative changes on age discrimination, the Personnel Committee sought a legal Opinion from Jonathan Swift, of 11 Kings Bench Walk, on the assimilation of existing lecturers to the new scale on the basis of their current salary points (this being the method specified in the National Framework Agreement and applied to all other staff). Counsel was asked to consider the immediate matter of assimilation on 1 August 2006 in the light of the UK regulations on age discrimination 2 which come into force from October 2006. While the regulations have yet to be tested in employment tribunals, and any such case would be highly fact- specific, Counsel has advised that the method of assimilation would be likely to be regarded as a 'proportionate means of achieving a legitimate aim', namely implementing the National Framework Agreement in a manner appropriate to this institution.
28. In summary, Counsel has noted a number of justifications for the University's proposed approach. These include the fact that the national agreement was negotiated with the recognised trade unions, and, importantly, that the local implementation of that agreement has been a matter of consultation and negotiation with the Oxford AUT, endorsed by a clear majority vote in favour of the proposals and their method of implementation. Counsel suggests that this may be taken to indicate that 'the outcomes of the implementation process are both legitimate and fair, having regard to the interests of all employees concerned, and having regard to the impact of the new pay scale on all employees over the long term'. Indeed, the substantial increase in the minimum salary and the increase in the joint maximum favour both the youngest and (to a lesser extent) older academics and these groups together comprise the majority of lecturers. Further, and to the extent that the Task Force on Academic Employment has been set up to consider wide-ranging questions of academic employment and remuneration, the implementation of the new pay structure may be regarded as a transitional step. Consideration has also been given to possible alternative methods of assimilating lecturers to the new pay scale, including transfer to a single maximum point; transfer according to an assessment of individual merit or performance; and transfer based on length of service. The first of these potential options would be operationally difficult, expensive, and would be susceptible to complaint from older/longer serving staff on the grounds of a loss of differential in pay; the second would be highly controversial given Congregation's clear rejection last year of a 'mandatory system of regular, joint Universitycollege review of individual contributions with scope to enhance financial rewards, rebalance academic duties, and address under-performance'; and a service-related approach would produce a similar pattern of salaries 3 to the proposed method of assimilation.
29. The Personnel Committee will issue advice to divisions to review the salaries of lecturers on assimilation and to remove any unjustifiable differences in pay amongst existing academic staff. The committee will also issue guidance on setting starting salaries for new appointments to the lecturer scale, following consultation with divisions, colleges, and other interested parties.
Salaries for professors and readers
30. The National Framework Agreement does not cover readers and professors, or senior academic-related staff in grades ALC6 or RSIV. However, concerns have been expressed about the loss of the differential between lecturers and readers and professors, given the changes to the lecturer scales, if nothing is done to their salary levels in August 2006 (other than the expected cost of living increase). Council and the Personnel Committee have therefore agreed that the professorial minimum and the reader maximum (at 2005 rates) should be increased by 4.3 per cent (i.e. by the same percentage increase to the joint maximum for lecturers). These staff will also receive cost of living increases as set out in paragraph 13 above.
31. There are currently two schemes for university lecturers who do not hold tutorial fellowships (ULNTFs), which were developed to recognise the fact that the income from the college of association does not bring them to the joint maximum.
(a) The 'old' ULNTF scheme (which is now closed to new members) gives qualifying academics access to three salary points beyond the University's maximum for university lecturers in return for one, two, or three hours of tutorial teaching. Members of this scheme also have the option to apply to join the 'new' ULNTF scheme.
(b) The 'new' ULNTF scheme enables academic staff who are 44 and over who do a full load equivalent to a ULTF to reach the joint maximum. All recent ULNTF appointments must be capable of achieving a full equivalent load by this age.
These schemes will be revised to reflect the changes to the university lecturer scale and age discrimination legislation, along the following lines.
Old ULNTF Scheme
32. The three additional points beyond the UL maximum will be mapped to the new pay spine as follows:
New ULNTF scheme
33. From August 2006 ULNTFs will be eligible to join the ULNTF scheme at any age. ULNTFs accepted into the scheme will be paid on the model combined salary points for university lecturers. ULNTFs who have yet to demonstrate that they fulfil a full equivalent load will be paid the university share only of the model combined salary scale for ULs (see Annexe A). The implication for colleges is that ULNTFs of any age, or their departments, may approach colleges in connection with tutorial teaching which would in future fall within the scope of the ULNTF schemes. Colleges would, of course, be entirely free to choose whether or not to use ULNTFs for this purpose.
University support and academic-related staff
34. The key features of the new structure for university support and academic-related staff are summarised below.
35. In addition to the structure itself, terms and conditions of service for university support staff (such as hours of work, holidays, and overtime) will be harmonised in line with the principles of equal pay for work of equal value. This is because, even if basic annual salary levels are equalised, other terms such as the length of the working week need to be the same so that the hourly rate for jobs at the same grade are equivalent. The University also wants to ensure that its terms and conditions are consistent with its aspiration to be an employer of choice.
36. Certain aspects of the harmonisation negotiations have proved particularly complex and challenging because of the variations between existing national agreements for the different staff groups and the wide variety of local practice which has evolved within the University. The new terms and conditions were developed by a joint sub-group comprising staff representatives and departmental administrators, and have been considered under the University's normal consultation and negotiation procedures with the trade unions.
37. There will be significant improvements in core terms of service for many university support staff: the standard working week will be harmonised down to 36.5 hours for all staff (which will benefit technicians, manual staff, and those employed in the University Estates Directorate's Direct Labour Organisation); and annual leave entitlement will be harmonised up to thirty-eight days, inclusive of eight public holidays (which will benefit these same staff, as well as clerical and library staff in grades C1 to C3).
38. The area on which, despite extensive consultation, it has not been possible to reach unanimous agreement is in relation to enhanced payments for unsocial hours working. However, generous protection arrangements have been agreed to safeguard the position of any existing staff who might otherwise be disadvantaged.
Transitional arrangements and protection
39. In most cases, the new salary structure offers the same or better terms and conditions of employment. However in a small minority of cases the new arrangements will be less advantageous. This is inevitable in an exercise of this scope in an organisation of the size and complexity of Oxford University with its highly devolved management structure. The principle of equal pay for work of equal value prevents unlimited protection of terms and conditions but recognises that time-limited transitional arrangements are necessary. The National Framework Agreement and the accompanying Memorandum of Understanding with the AUT set guidelines for protection which, in most cases, are limited to four years. The Personnel Committee is sensitive to the potential impact which the changes could have on some individual members of the University and has therefore interpreted this guidance as generously as practicable. Detailed protection arrangements have been negotiated to safeguard existing staff, including protection of the expectation of salary progression for academic and academic-related staff, and special arrangements for staff who are within five years of retirement. Full details of the protection arrangements may be consulted at http://www.admin.ox.ac.uk/ps/hera/.
Implications for staff in clinical departments
40. The NHS is currently going through a similar salary restructuring exercise ('Agenda for Change'). Since equal pay legislation applies to all staff employed by the University, consideration has been given to the possibility of transferring university support staff employed on Whitley Council grades to university salary scales. Personnel Services is closely monitoring developments at the Oxford Radcliffe Trust and is considering the detailed implications of the Framework Agreement for relevant staff employed in clinical departments. The current terms and conditions for university support staff in clinical departments have been taken into account in the development of the new university salary structure, and a cross-section of staff in clinical departments have had their jobs evaluated using the HERA job evaluation scheme, in just the same way as staff in other departments.
41. There will be full consultation with staff in relevant departments before any changes in pay and terms and conditions for university staff in clinical departments are proposed to Personnel Committee and Council.
42. Although salary restructuring exercises of this kind inevitably involve additional costs over and above normal annual cost of living increases, no earmarked funding has been provided by HEFCE specifically for this purpose. Other UK universities are predicting additional payroll costs typically in the region of 3 per cent.
43. It is estimated that in 20056 the average percentage increase in the university pay bill will be 4.3 for academic staff, 2.2 for academic-related administrative, library and research staff, and 2.4 per cent for university support staff. This amounts to an additional cost (before any cost of living rise from 1 August 2006) of £5.3 million for university-funded posts, and £1.9 million for externally funded posts.
44. The Framework Agreement and salary restructuring apply equally to outside grant funded posts. RCUK's position on funding the transition to new salary structures was notified separately to departments during 2005 and Research Services have liaised with funders about the proposals. RCUK has agreed to meet any salary costs arising from the implementation of the National Framework Agreement via Full Economic Costing (FEC), and will meet any transitional costs in grants agreed between March 2005 and the introduction of FEC. However, departments will be expected to absorb the transitional costs of the new pay structure from any existing cash- limited grants which pre-date this.
45. The Planning and Resource Allocation Committee has considered the financial implications of the new structure and notes that departments will have to absorb these additional costs within their existing budget allocations.
Risk assessment and impact assessment
46. Council and the Personnel Committee have considered the risks associated with implementing the structure. It would be extremely damaging reputationally if this University were not able to introduce a new pay and grading structure in line with the National Framework Agreement and this could adversely affect morale amongst staff. Given that the rest of the sector is implementing the agreement and anticipating increases in salary costs of a similar magnitude, the University's salary competitiveness would be reduced the new structure were not implemented. Moreover, leaving the pay structure unreformed would leave the University exposed to the potential risk of equal pay complaints. These risks have been weighed against the substantial additional cost to the University. Council and the Personnel Committee believe that the benefits of implementing the proposals outweigh the risks and that appropriate steps could be taken to mitigate those risks.
47. The impact of the new structure has also been considered with regard to the principle of equal pay for work of equal value and other equality legislation. The development of a single pay structure underpinned by a common analytical job evaluation scheme together with the harmonisation of terms and conditions of employment will ensure that the University's remuneration arrangements are fair and transparent, and represent a positive development with regard to equality of treatment across all staff groups. Specific legal advice has been sought on the implications of forthcoming age discrimination.
Consequential changes to university legislation
48. Congregation Regulation 1 of 2002 specifies membership of Congregation in terms of the current pay grades used by the University. Legislation will be promulgated via the usual channels in order to rename the existing grades with the corresponding grades in the new salary structure (for example, the references to posts on Administrative, Senior Library and Museum and Computer Staff Grades 3 and above will be replaced with the corresponding grades in the new structure).
49. Council and the Personnel Committee have approved a new pay and grading structure for implementation from 1 August 2006, which they believe to be a comprehensive and relatively generous implementation of the National Framework Agreement between employers and unions at the national level. The main components of the new salary structure are:
(a) a common grading structure based on a common pay spine (Annexe B) underpinned by the HERA job evaluation scheme;
(b) increases over and above the annual cost of living settlement averaging 4.3 per cent for academic staff, 2.2 per cent for academic-related staff, and 2.4 per cent for university support staff;
(c) steps to harmonise towards a model combined salary scale for lecturers;
(d) removal of the link between age and salary for the lecturer scale;
(e) harmonisation of terms and conditions for university support staff, with a reduction in the working week and increases in annual leave for many;
(f) generous protection arrangements for all staff who currently enjoy any more favourable terms and conditions; and
(g) a substantial additional investment by the University in its staff of £5.3 million per annum over and above the proposed cost of living settlement for 20069. Return to Contents
From 1 June 2006 known as the University and College Union (UCU).
Employment Equality (Age) Regulations 2006 published on 9 March 2006.
The UK regulations
on age discrimination (regulation 32) exclude from the scope of age discrimination, benefits
payable on the basis
of length of service entirely, or, if the employee has more than five years' service, if the
considered that the practice 'fulfils a business need of his undertaking'.
Supplement (1) to Oxford University Gazette No. 4777. Wednesday, 12 July 2006.