The story behind UNISON’s efforts to remedy a payroll error that was costing its health members money every time they went on holiday
The NHS pay dispute is, sadly, still unresolved. But over the last few weeks some 200,000 UNISON health members in England have been receiving an unexpected boon in their pay packets – some to the tune of thousands of pounds.
An administrative error? Early Santa? Workplace stress leading to hallucinations? No, none of those. In fact these were back payments – totalling at least £120 million to date – which have been won by UNISON after a long campaign of legal challenges and behind the scenes negotiation.
The reason was very specific: holiday pay, and the failure by NHS employers to account for regular overtime when making holiday pay calculations – leaving many members underpaid for years.
UNISON’s challenge was prompted by victory in another sector. The 2012 case British Gas Trading Ltd v Lock, backed by UNISON, concerned a salesman whose remuneration included basic salary plus commission for the number of contracts he sold; but when he went on holiday, he only received his basic pay.
The case went all the way to the Supreme Court in 2017, which refused British Gas the right to appeal an earlier court decision – based on the Working Time Directive – that the amount employees in Mr Lock’s position get for their holiday must be based on both their basic pay and any commission they earn.
As that case was being won, UNISON realised there was a similar blind spot in the NHS, in relation to overtime payments.
UNISON head of health Sara Gorton explains: “It’s all centred on the question: what is your normal pay? What the NHS contract says – and this is also based on the Working Time Directive – is when you go on holiday you shouldn’t lose any pay. So the argument was, does overtime count as normal pay? We felt it did.”
The union explored the issue along with some of its ambulance branches – whose members frequently work overtime, often in response to emergencies – until the East of England Ambulance branch came up with 13 cases of members who found that they had been losing pay in this way.
This led to the case East of England Ambulance Service NHS Trust v Flowers and others, with the union’s case being that both voluntary and non-guaranteed overtime should be included in holiday pay calculations.
As with so many cases with wide-ranging impact, it ping-ponged around the courts. The union lost the first employment tribunal, won its appeal at the employment appeal tribunal, and won again when the employer appealed at the Court of Appeal.
The employer then appealed again at the Supreme Court. In the meantime, the East of England claim spawned hundreds of other claims around the country. The pressure was building on the employers, which allowed UNISON to switch tactics.
Says Ms Gorton: “The courts were finding that yes, overtime does count as normal pay, and that it had been excluded as normal pay for the purposes of holiday pay.
“It was looking very likely that we were going to win this again at the Supreme Court. So we approached the employers nationally and said, ‘We think this has wider implications and we’d like to reach a national collective agreement. Wouldn’t you rather sit down and talk to us in partnership, than let the legal progress become even more complicated for everybody?’
“So the Staff Council, which is the body that oversees the terms and conditions for NHS staff, agreed to work on the issue together with us.”
These negotiations started in earnest in December last year and concluded when a framework agreement was announced this March, which acknowledges that employers should include regularly worked overtime and additional standard hours in the calculation of pay when staff are on annual leave.
In accordance with the agreement, employers have gone back two full financial years (1 April 2019 to 31 March 2021) and corrected historic underpayments for employed staff who met the criteria – hence those bigger than usual pay packets.
The legal claims were settled to much the same effect.
It was agreed that the fairest approach would be to apply a single percentage (16%) to all eligible overtime. Depending on how much overtime each individual earned over those two years, the payments vary from quite small to huge. One ambulance member received £15,000 in back pay.
The hard work continues. “Having sorted out the historic underpayment, employers must now put in place systems that will ensure people are paid properly from here on,” says Ms Gorton. “UNISON will keep up the pressure to make sure these underpayments never happen again.”
‘Organising in its greatest sense’
Roz Norman, the chair of UNISON’s health service group executive, comments: “To be fair, the employers didn’t know per se that they should be paying this. There was a bit of legal uncertainty. It’s a good example of UNISON identifying a problem, then using the law, using organising, using members’ stories to get money into people’s pockets. Money that matters, that can pay for holidays, buy school uniforms, help with bills.
“This is organising in its greatest sense,” she adds. “It started with branches talking with members and asking them the question: would you like more holiday pay? Bringing them on board, building that interested group of people who wanted to push this forward.
“Then a lot of work by staff, who members rarely see behind the scenes. Six years of legal pressure meant that when we got to national talks we had hundreds of tribunal claims behind us – that was our leverage.
“We found an issue, we got members interested in the issue, we worked on the issue, then we got it over the line as an agreement. So national, regional, branch all working together in members’ interests.”
The campaign and agreement outlined above was for England only, but UNISON Cymru/Wales has just concluded a similar agreement, UNISON Scotland secured its holiday pay agreement in 2019. Employers in Northern Ireland have indicated they will enter discussions with trade unions to resolve the issue.
Marcus Jones, Paramedic, South Central Ambulance Service
The payment was obviously hugely welcome, as it allowed us to support our daughter with her university rent. Knowing that there is someone there like UNISON to fight our corner, to ensure we get fair pay and rights is vital.
Like many I wasn’t aware that we were being paid incorrectly and so it was a shock when it was announced and reported on. The back payment for me and my family was a substantial one and it certainly came at the right time. Thank you!
Lisa Lovegrove, Emergency Care Assistant, Oxford City Station
The payment was very nice and greatly received and will go towards a holiday and Christmas. A big well done to whoever identified that an error had occurred with our pay and a big thank you to the union for pursuing it and making the back pay happen.
Charlee Buckles, Control Shift Officer, Hampshire
This enabled me to clear my credit cards! 🙂 Let the saving for a deposit commence!!
Eddie Woolley, Operating Department Practitioner, University Hospitals Birmingham
Staff in my department who work on call and overtime have received substantial back pay, giving some of them double their monthly wage. I know of some who got over five or six grand in their pay packets. And people know it was UNISON that did it. Good stuff!