Calculation of holiday pay under the NHS Handbook for regular voluntary overtime: equalities impact assessment
Published 10 June 2021
Applies to England
© Crown copyright 2021
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/nhs-holiday-pay-for-voluntary-overtime-equalities-impact-assessment/calculation-of-holiday-pay-under-the-nhs-handbook-for-regular-voluntary-overtime-equalities-impact-assessment
Introduction
1. The Flowers legal case has been ongoing for a number of years and has progressed through the Courts, the latest Judgment (from 2019) is from the Court of Appeal and is the current position in law.
2. The case relates to the treatment of overtime payments and in particular payments for voluntary overtime in the calculation of holiday pay and the interpretation of the Working Time Directive and Section 13.9 of the Handbook which describes the calculation of pay during annual leave. As the case relates to implementation of the national terms and conditions there is a national impact across the NHS.
3. The Court of Appeal’s latest judgment ruled that regular voluntary overtime should be considered when calculating annual leave under section 13.9 of the Handbook. Evidence suggests that implementation across trusts in England may be inconsistent and regular overtime may not have always been included in holiday pay calculations.
4. Section 13.9 of the Handbook reads:
Pay during annual leave will include regularly paid supplements, including any recruitment and retention premia, payments for work outside normal hours and high cost area supplements. Pay is calculated on the basis of what the individual would have received had he or she been at work
- For staff who have regular hours the reference period should be based on the previous 3 months at work or any other reference period that may be locally agreed
- With effect from 6 April 2020, for staff who have irregular hours the reference period should be based on the last 52 weeks. When calculating the 52 full weeks of pay, employers are limited to referencing the previous 104 weeks from the date the leave begins
5. The Court of Appeal position is law. However, rather than support staff through individual legal cases, the NHS trade unions strongly support a negotiated agreement. This option is also favoured by trust leaders. Both sides are aware of the legal and resource costs to staff and employers of supporting or defending individual member’s legal claims. East of England Ambulance Service NHS Trust currently have a pending appeal to the Supreme Court with the aim of reversing the Court of appeal judgement. The case is due to be heard in June 2021 and it is important to note the judgment may change the position in law.
6. In November 2020 the Secretary of State for Health and Social Care (SofS) issued a mandate for negotiations to seek to reach a resolution for the NHS as a result of the Flowers legal case. Joint negotiations began between NHS employers and NHS trade unions in December 2020 and concluded on 1 March 2021 with agreement reached in principle on a corrective payment made pursuant to the terms of a Framework Agreement.
7. This paper analyses the agreed position on corrective payments which are to be made to eligible employees pursuant to a Framework Agreement in connection with any allegedly underpaid holiday pay relating to overtime payments not having been included in holiday pay under Section 13.9 or the Working Time Directive or the Working Time Regulations 1998 up to and including 31 March 2021. This paper assists the SofS in having due regard to his Public-Sector Equality Duty (PSED) under s149 of the Equality Act 2010 (EqA) as set out in Annex A.
8. The Framework Agreement sets out the criteria that employees need to meet in order to be eligible for a corrective payment. The criteria and the terms of the Framework Agreement do not and should not inform the correct interpretation of section 13.9 of the Handbook from 1 April 2021 onwards.
9. The PSED is an ongoing obligation and considers the impact across all the protected characteristics:
- age
- disability
- gender reassignment
- marriage and civil partnership
- pregnancy and maternity
- race
- religion or belief
- sex and sexual orientation
10. The PSED requires a public authority (which includes NHS organisations and the SofS) to have due regard in relation to each of the protected characteristics set out in s149 EqA. It remains the case that trusts are responsible under employment law for their employees and for meeting their own responsibilities under the PSED.
11. In UK discrimination legislation, there is a fundamental distinction between direct discrimination and indirect discrimination. Direct discrimination is where an individual receives less favourable treatment because of a protected characteristic. Indirect discrimination concerns a provision, criterion or practice (PCP) that puts someone with a protected characteristic at a disadvantage, compared with people who do not share the protected characteristic. A PCP that causes a disadvantage is lawful if it is justified (that is, is a proportionate means of achieving a legitimate aim). In regard to justification, uniquely in the context of direct discrimination rather than indirect discrimination respondents to claims for age discrimination are entitled to seek to establish the defence of justification in cases of direct age discrimination as well as indirect. Direct, as well as indirect, age discrimination is also uniquely justifiable where the discrimination is the result of a proportionate means of achieving a legitimate aim.
12. In preparing this equality analysis, consideration has been given to all the statutory objectives under s149 EqA: the need to avoid unlawful direct discrimination, indirect discrimination or harassment; the need to advance equality of opportunity; and the need to promote good relations between different groups.
13. This paper provides an analysis of the expected equalities impact of the corrective payments (paid pursuant to the Framework Agreement). The available data relates to staff employed by Annex 1 employers.
14. This assessment covers the impact of equalities in England only. The paper is intended to assist the SofS in considering whether the Framework Agreement should be subject to amendment before implementation.
15. This assessment is not static, further work on the equalities impact of the changes will continue during and following implementation and we are working with NHS England and Improvement (NHSEI) and NHS employers (NHSE) to understand the optimal approach. Equalities impact work must also be conducted at local employer level.
Aims and objectives of the Agreement
16. The intention of the Framework Agreement is to resolve all claims in connection with any allegedly underpaid holiday pay relating to overtime payments not having been included in holiday pay under Section 13.9 or the Working Time Directive or the Working Time Regulations 1998 up to and including 31 March 2021.
17. As part of this, it aims to support the resolution, at a local level, of any existing and ongoing claims in either the Employment Tribunal or the County or High Court, regarding the inclusion of overtime (for example, regularly worked voluntary overtime, non-contractual overtime, and excess hours) under Section 13.9 of the Handbook or the Working Time Directive or the Working Time Regulations 1998 when calculating annual leave. In addition, it aims to ensure that NHS trade unions will facilitate such resolution.
18. The Framework Agreement aims to deliver, in partnership with trade unions, an agreement on corrective payments for eligible staff which is fair to staff and the taxpayer. All claims for underpaid holiday pay relating to overtime payments up to 31 March 2021 are intended to be resolved and corrected by the terms of this Framework Agreement and not pursued.
19. The draft Framework Agreement, subject to final agreement between staff and management side, is at Annex B.
Who will be affected
20. Staff employed by organisations in England as set out at Annex 1 of the Handbook.
21. There are c.1.2m (head count) AfC staff. Women make up 80%, men the remainder. Data from NHS Digital confirms that around 78% of NHS employees are white, 18% from Black, Asian and minority ethnic (BAME) backgrounds, with the remainder not stated. Further detail on the make-up of the AfC workforce by protected characteristic is set out at Annex C.
22. This paper analyses the impact of the proposed corrective payments.
Eligibility
23. The Framework Agreement applies to eligible staff employed by an organisation in England listed at Annex 1 of the Handbook. The eligibility criteria for payments are also laid out in Section 2 of the Framework Agreement (see Annex B). The Framework Agreement does not apply to other organisations outside of Annex 1 and they are not covered by this equality assessment.
Addressing the impact of the holiday pay Framework Agreement on equalities – by each protected characteristic
Gender
24. Figure 1 at Annex C shows that around 80% of the AfC workforce is female. The proportion of female staff who either undertook additional work (78%) or would be eligible for a corrective payment (73%) is lower than this overall total. To some extent this may reflect the composition of staff who choose to or are able to work overtime.
25. The Framework Agreement applies to both overtime (above the full time equivalent (FTE) of 1) and additional standard time (AST) for part-time workers which is the difference between the contracted hours for part-time staff and the FTE hours for their grade.
26. Approximately 44% of female staff work part-time compared to 16% of male staff. Female staff are more likely to receive AST at plain time rates compared to premium pay rates that apply to overtime pay. Annex C Figure 7 sets out the data on part-time staff by gender.
27. In addition, female part-time staff are less likely to work ‘regular’ overtime (additional hours beyond the FTE for their role compared to male staff). This could put part-time female staff at a disadvantage in relation to the ‘regular’ eligibility criteria for a corrective payment compared to male staff who are more likely to work full time and more likely to meet the eligibility criteria.
Mitigation and justification
28. The inclusion of AST for part-time staff, in which category a significantly higher proportion of female rather than male staff are included, would ensure that part-time staff would meet the eligibility criteria for inclusion within the Framework Agreement by relaxing the requirement that overtime applies to those working in excess of the standard hours for a full-time worker’s working week and extending the concept of overtime to bands 2 to 7 of NHS staff working to the Handbook whose contractual commitment is to work part-time.
29. This approach mitigates the risk of direct or indirect discrimination on the basis of sex, advances equality of opportunity and promotes good relations between different groups.
Pregnancy and maternity, including parental leave
30. The gender breakdown shows that the majority of the NHS workforce covered by the Handbook is female.
31. During the 2-year corrective pay period, staff who are pregnant may choose to reduce their discretionary effort, for example, they may choose to work fewer hours (if any) beyond their contracted hours, they may also be on long-term sick leave, or shielding for a reason relating to pregnancy. Staff on maternity or extended parental leave will not be in active employment. In both instances staff may not therefore meet the regularity criteria set out in clause 2.4 of the Framework Agreement and may be disadvantaged such that they are excluded from consideration for a corrective payment.
32. There is a risk that the eligibility criteria could indirectly discriminate against those staff that choose not to work regular overtime and or who, due to extended periods of absence, are unable to work overtime but who remain in employment.
Mitigation and justification
33. For staff who are pregnant and continue in active service but choose to reduce the extent to which they work beyond their minimum contracted hours, NHS employers are urged actively to consider relaxing the test of regularity to, for example, two occasions of overtime within the period of 12 months. For staff who are on maternity or parental leave, they will be subject to the provisions and the law that apply to such staff including in connection with issues of holiday pay. Relaxing the regularity criteria for those staff who are either pregnant, on maternity or parental leave would mitigate the risk that they are excluded from consideration for a corrective payment.
34. This approach mitigates the risk of direct or indirect discrimination, advances equality of opportunity and promotes good relations between different groups.
Disability
35. Figure 2 at Annex C shows that 4% of the AfC workforce have a declared disability. This figure may be higher as we cannot guaranteed that everyone declared their disability.
36. It does not automatically follow that staff that have a declared (or undeclared) disability are unable to work either additional standard hours or hours above their contract full time hours. Employers are required to ensure that where necessary reasonable adjustment are offered to staff to enable them to fulfil their job role. Indeed, Figure 2 at Annex C shows that a proportionate number of those who undertook additional activity declared they had a disability (around 4%).
37. This suggests that a declared or undeclared disability would not itself prevent staff from working additional standard hours or beyond full time hours. The assumption is that these staff would meet the eligibility criteria for a corrective payment and that the need to relax the eligibility criteria is unnecessary because there would be no direct or indirect discrimination.
38. Staff on long-term sick: staff on long term sick leave (regardless of the reason or condition) during part or all of the two-year corrective pay will not be in active employment. Staff may not therefore meet the regularity criteria set out in clause 2.4 of the Framework Agreement. Staff on long-term sick for a reason relating to their disability may be disadvantaged such that they are excluded from consideration for a corrective payment.
39. Staff working from home – shielding or self-isolating due to COVID-19: where staff may need to shield, self-isolate and or working from home due to COVID-19, there may be limited opportunity to work additional standard hours or beyond their full time hours. Where this is for a reason relating to their disability, they may be disadvantaged such that they are excluded from consideration for a corrective payment.
Mitigation and justification
40. Where it is apparent that staff with disabilities experience greater difficulty in meeting the eligibility criteria, for example because of prolonged absences, NHS employers are urged actively to consider whether the criteria for eligibility should be adjusted in order to ensure that those with disabilities are not disadvantaged.
41. If someone is on long term sick leave or shielding or self-isolating due to COVID-19, for reasons relating to their disability (or another protected characteristic), they may be disadvantaged, as such the below should also be considered.
42. Relaxing the regularity criteria for those staff on long term sick leave for a reason relating to their disability would mitigate the risk that they are excluded from consideration for a corrective payment. NHS employers are urged actively to consider whether adjusting the criteria for eligibility should be adjusted in order to ensure that those with disabilities are not disadvantaged.
43. Relaxing the regularity criteria for staff shielding, self-isolating due to COVID-19 for a reason relating to their disability would mitigate the risk that they are excluded from consideration for a corrective payment.
44. This approach mitigates the risk of discrimination, advances equality of opportunity and promotes good relations between different groups.
Race
45. Figure 3 at Annex C compares the ethnic composition of those who undertake additional activity with the rest of the workforce. While the proportion of those from a BAME background (13%) who completed additional activity is lower than BAME representation in the workforce (19%) there is no evidence that the Framework Agreement will have a disproportionate impact.
46. The prevalence of BAME staff undertaking additional activity, as for white staff, will relate to their role. For example, evidence shows that ambulance staff are the most likely to undertake additional activity, and are less ethnically diverse than other staff groups, over 90% of the ambulance workforce is White.
47. All staff who meet the criteria will be eligible to receive a corrective payment based on the amount of overtime completed in each financial year.
Mitigation and justification
48. There appear to be no barriers to BAME staff meeting the eligibility criteria. We do not believe that the Framework Agreement directly or indirectly discriminates against staff with this protected characteristic.
Age
49. Annex C Figure 4 provides data by age of the agenda for change workforce.
50. Around 50% of the NHS workforce covered by the Handbook have more than 10 years’ service and will be entitled to the maximum annual leave of 33 days (plus 8 bank holidays).
51. This report now moves to considering the issue of age discrimination and it will do so in regard to the risk (if any) of age discrimination as a result of the use of the single scalar or multiplier of 16% and the requirement that it is only staff who are in employment on 31 March 2021 who are eligible to be considered within the terms of the Framework Agreement. That issue of being in employment could give rise to age related questions for example because of those who retired prior to 31 March 2021.
The single scalar of 16%
52. The application of the single scalar of 16% potentially benefits younger staff with less service and works to the disadvantage of older staff with longer service. However, any such differences are marginal and very limited. Further the scalar of 16% is a generous provision and means that the annual holiday entitlement for all staff is respected. It is only when considering both annual leave and statutory holidays that there is a very marginal negative impact on staff with longer service.
53. What is more the existing national system of payroll simply does not and cannot provide a breakdown of staff by reference to their length of employment and resultant holiday entitlements. The effect of that is that the use of a single scalar is in practice the only possibility. Further consideration of any alternative approach that exists which is practical have revealed that there are no such alternatives at present.
54. The above combines with the very marginal negative impact of the use of that single scalar of 16%. What is more the Framework Agreement does not bind employees or NHS employers and as a result they are not barred from bringing claims if they wish to do so although staff and employers are of course encouraged to adopt and apply the approach set out in the Framework Agreement.
55. It follows from all of the above that the discriminatory effect, if any, of the scalar is extremely limited and no realistic alternative exists. In those circumstances, it is considered that the use of the scalar is clearly justified and therefore not discriminatory.
Retirement and similar cases
56. Moving now to considering age discrimination in regard to any suggestions that the requirement that staff be employed as at 31 March 2021 is age discriminatory because older staff may have retired prior to that date. The principle response to that is as follows.
57. All parties to the Framework Agreement are agreed that it is crucial to have a limit to those to whom these Framework Agreement and corrective payments apply. That in itself necessitates the identification as to the limits of those who are eligible for corrective payments. Further the Framework Agreement, as already noted above, does not prevent employees from bringing claims if they wish to do so although it is very much hoped that employees and NHS employers will in fact choose to adopt the approach of the Framework Agreement. In addition to the above, any suggestion that the Framework Agreement should apply to ex-employees would give rise to grave practical difficulties in the light of the size of the workforce in the NHS. Further any attempt to do so would involve extremely extensive delays and would be very likely to mean that there could not be any concluded agreement for a very extended period of time. It would also mean that the costs involved in giving effect to the Framework Agreement are highly likely to mean that it would not be practicable to apply it to ex-employees.
58. In contrast to the above, the degree of any discriminatory impact of the requirement of being employed on 31 March 2021 is very limited indeed. In the above circumstances, it is concluded that any alleged age discrimination involved in the requirement of being employed as at 31 March 2021 is justified.
Gender reassignment: including transgender
59. There is no data available on this protected characteristic.
60. For this protected characteristic, the impact on the ability of staff to meet the eligibility criteria may be affected by, for example, the need to take time away from their workplace, the need to take sick leave. However, we think it unlikely that staff would face a barrier in either working additional standard hours or working beyond their contracted full time hours during the corrective payment period. For staff who, for example, may need to take sick leave, the mitigation for staff on long term sick leave (4 weeks or more) would apply here.
Mitigation and justification
61. Although there is no data to rely on, there appear to be no barriers to staff meeting the eligibility criteria. We do not believe that the Framework Agreement directly or indirectly discriminates against staff with this protected characteristic. However, insofar as any such cases involve extensive surgery and lengthy absence from work this report would suggest that the approach to other cases of long-term absence because of a disability is applied to absence because of this protected characteristic of gender re-assignment in the above circumstances.
Sexual orientation
62. Figure 5 at Annex C shows that 72% of the AfC workforce identifies as heterosexual, with the majority of the remainder falling into the ‘not stated’ and ‘not known’ categories, 2% gay or lesbian and 1% bisexual.
63. The proportion of staff who undertake additional activity and eligible for a corrective payment, is similar to that for the wider workforce we do not envisage any significant equality impacts on this basis.
Mitigation and justification
64. There appear to be no barriers to staff meeting the eligibility criteria. We do not believe the Framework Agreement directly or indirectly discriminates against staff with this protected characteristic.
Religion or belief
65. Figure 6 at Annex C shows that the religious breakdown of the AfC workforce is 45% Christian, 3% Muslim, 2% Hindu,2% Sikh, 1% Buddhist, with the remaining 32% either Atheist, ‘not disclosed’ or ‘not known’.
66. The proportion of staff who complete additional activity and eligible for a corrective payment, is similar to the wider workforce. The Framework Agreement will not differentially impact staff according to their religious beliefs. As such we do not envisage any significant equality impacts on this basis.
Mitigation and justification
67. There appear to be no barriers to staff meeting the eligibility criteria. We do not believe that the Framework Agreement directly or indirectly discriminates against staff with this protected characteristic.
Conclusion
68. This analysis finds, all staff meeting the Framework Agreement’s eligibility criteria (see Annex B), regardless of protected characteristics, should be eligible for a corrective payment.
69. There are some occasions where, for reasons of a protected characteristic, someone may have chosen not to work regular overtime, or may not have been able to work regular overtime. This presents a risk that the eligibility criteria could indirectly discriminate against these persons. To mitigate this, in these instances, NHS employers are urged actively to consider whether the criteria for eligibility should be adjusted in order to ensure that those with a protected characteristic impacted by such circumstances are not disadvantaged. This approach mitigates the risk of discrimination, advances equality of opportunity and promotes good relations between different groups.
70. There has also been consideration given to the impact of age. In relation to the use of a single scalar of 16% it was found the discriminatory effect, if any, of the scalar is extremely limited and no realistic alternative exists. In those circumstances, it is considered that the use of the scalar is clearly justified and therefore not discriminatory. Furthermore, the analysis also concluded that any alleged age discrimination involved in the requirement of being employed as at 31 March 2021 is justified.
71. As such, while the analysis identified points of note, it found any discrimination is very limited and can be justified or mitigated.
Annex A
Public sector equality duty in the Equality Act 2010
1. A public authority must, in the exercise of its functions, have due regard to the need to:
- eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act
- advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it
- foster good relations between persons who share a relevant protected characteristic and persons who do not share it
2. A person who is not a public authority but who exercises public functions must, in the exercise of those functions, have due regard to the matters mentioned in subsection (1).
3. Having due regard to the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it involves having due regard to the need to:
- remove or minimise disadvantages suffered by persons who share a relevant protected characteristic that are connected to that characteristic
- take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of persons who do not share it
- encourage persons who share a relevant protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low
4. The steps involved in meeting the needs of disabled persons that are different from the needs of persons who are not disabled include steps to take account of disabled persons’ disabilities.
5. Having due regard to the need to foster good relations between persons who share a relevant protected characteristic and persons who do not share it involves having due regard to the need to:
- tackle prejudice
- promote understanding
6. Compliance with the duties in this section may involve treating some persons more favourably than others; but that is not to be taken as permitting conduct that would otherwise be prohibited by or under this Act.
7. The relevant protected characteristics are:
- age
- disability
- gender reassignment
- pregnancy and maternity
- race
- religion or belief
- sex
- sexual orientation
8. A reference to conduct that is prohibited by or under this Act includes a reference to:
- a breach of an equality clause or rule
- a breach of a non-discrimination rule
9. Schedule 18 (exceptions) has effect.
Annex B
Collective Agreed Framework in relation to annual leave payments (‘Framework Agreement’)
Introduction
A. This Framework Agreement is agreed in the context of ongoing litigation regarding the calculation of the payment which a worker receives during a period of annual leave. The case of Flowers v East of England Ambulance Service NHS Trust concerns the interpretation of the Working Time Directive, Working Time Regulations 1998 and section 13.9 of the NHS Terms and Conditions of Service Handbook (agenda for change - AfC), and the treatment of overtime payments and, in particular, payments for voluntary overtime in the calculation of holiday pay. The EAT and Court of Appeal held that payments for regular voluntary overtime were to be included in the calculation of holiday pay. The Trust obtained permission to appeal against the above to the Supreme Court and that appeal is scheduled to be heard on 22 June 2021.
B. Section 13.9 of the AfC Terms and Conditions states that ‘Pay is calculated on the basis of what the individual would have received had he or she been at work’. However, the evidence suggests that implementation across NHS organisations in England is inconsistent and that overtime has not, in a number of cases, been included in holiday pay calculations.
C. It is the aim of the parties that existing and ongoing claims in either the Employment Tribunal or the County or High Court relating to the issues of holiday pay dealt with by this Framework shall be resolved at a local level between claimants and the relevant NHS Employers (as defined in paragraph G below), with the trade unions facilitating such resolution.
D. The parties support this Framework Agreement in respect of corrective payments (as defined further in sections 1, 2 and 3 below) which are to be made to eligible employees in connection with any allegedly accrued rights or liabilities under paragraph 13.9 of AfC or the Working Time Directive or the Working Time Regulations 1998 up to and including 31 March 2021 (corrective payments). For the avoidance of doubt all claims for underpaid holiday pay relating to overtime payments up to 31 March 2021 are intended to be resolved and corrected by the terms of this Framework Agreement and not pursued. This Framework Agreement applies only to NHS employees employed under AfC by an NHS Employer (as defined in paragraph G below).
E. NHS Staff Council will have a role in providing guidance and information to support the process of making the corrective payments.
F. This Framework Agreement and the corrective payments made pursuant to it are in respect of all ‘overtime’ (regularly-worked voluntary overtime, non-contractual overtime and excess hours). For the purposes of this Framework Agreement, such overtime comprises hours which are worked regularly by employees in excess of their standard hours pursuant to their contract of employment. Accordingly, it also covers additional regular ‘overtime’ (including voluntary or non-contractual hours) worked by part-time employees over and above their contracted hours.
G. This Framework Agreement only covers NHS employers in England, as set out in Annex 1 to AfC (an NHS employer).
H. This Framework Agreement has been developed in full awareness of the Public Sector Equality Duty (PSED) and the duty to comply with it.
I. Whilst individual employees and NHS employers who fall within the scope of this Framework Agreement are not parties to it, the intention is that those employees and employers should respect the terms agreed and should not seek to litigate the issues which are agreed and considered resolved by the Framework Agreement.
J. The parties are very mindful of the importance of equalities in regard to the matters dealt with in this Framework Agreement and Guidance will be issued by Department of Health and Social Care on the implementation of this Framework Agreement taking into account equality issues under the Equality Act 2010 including the fulfilment of the Public Sector Equality Duty.
Corrective payments
1. Corrective payment period
1.1 The corrective payment period to which this Framework Agreement and any corresponding corrective payments apply is the financial years 2019 to 2020 and 2020 to 2021 only, namely 1 April 2019 to 31 March 2020 and 1 April 2020 to 31 March 2021 (the corrective payment period).
1.2 Subject to the eligibility criteria set out in paragraph 2.4, an employee may be eligible for a corrective payment in respect of either or both the financial years of the corrective payment period.
1.3 For the avoidance of doubt, this Framework Agreement is premised on the commitment of the parties and on relevant employees and NHS employers respecting its terms and not making any claims in any Court or Tribunal for payments in connection with allegedly unpaid holiday pay at any time prior to 31 March 2021, which claims are of the nature of the claims resolved by the terms of this Framework Agreement. For the avoidance of doubt, nothing in this Framework Agreement is intended to limit or prevent a trade union from providing support and assistance to members in respect of securing a corrective payment.
2. Eligibility criteria
2.1 An employee must satisfy the agreed eligibility criteria set out in paragraph 2.4 in the financial year(s) in question in order to receive a corrective payment for that financial year.
2.2 For the avoidance of doubt the eligibility criteria set out at paragraph 2.4 below in connection with the regularity of payments of overtime have been agreed specifically for the purposes of this Framework Agreement and are not to be understood to be providing any more general definition of regularity in connection with matters outside of this specific Framework Agreement.
2.3 Employees may be eligible for a corrective payment where they commenced employment with an NHS employer during the corrective payment period provided they satisfy the criteria set out at paragraph 2.4.
2.4 Employees must satisfy the following criteria to be eligible for a corrective payment:
a) they must be employed by an NHS employer on 31 March 2021
b) they must have received payments in respect of ‘overtime’ (as defined in paragraph F) in a minimum of 4 months out of any of the 12 months in the financial year 2019 to 2020 (1 April 2019 to 31 March 2020) or 2020 to 2021 (1 April 2020 to 31 March 2021)
c) paragraph 2.4(b) immediately above is subject to the guidance referred to in paragraph J in the Introduction and context section of this Framework Agreement which guidance will include examination of the need to refine the terms of clause 2.4(b) in the light of the impact of protected characteristics in terms of the application of clause 2.4(b)
2.5 Employees are only entitled to a corrective payment to the extent that overtime payments have not been already taken into account for holiday pay and will not be entitled to a payment under this Framework Agreement to the extent their employer has already either included all overtime payments for the purposes of calculating holiday pay entitlements or otherwise paid any such corresponding amount at any time prior to 31 March 2021.
3. Calculation and payment of corrective payments
3.1 It is agreed for the purposes of this Framework Agreement only, and not by way of any more general principle, that the corrective payment for an eligible employee will be calculated based on an agreed percentage multiplier of 16% applied to the total amount of ‘overtime’ pay received by the employee in any applicable financial year in the corrective payment period.
3.2 The corrective payment is a non-consolidated and non-pensionable compensatory payment and will be subject to deductions for income tax and national insurance contributions and other usual deductions.
3.3 Each NHS employer will use all reasonable endeavours to ensure that the corrective payments are completed and paid to relevant employees by 30 September 2021.
4. Existing claims and future claims (as future claims are dealt with at paragraph 4.4 below) in respect of ‘overtime’
4.1 Employers and trade unions agree to work collectively with the joint aspiration (both nationally and locally as needed) to resolve outstanding litigation on the issue concerning overtime payments. Trade unions will not support existing claims (in either the Employment Tribunal or the County or High Court in connection with the issue of the inclusion of overtime payments in the calculation of paid annual leave under section 13.9 of Agenda for Change or the Working Time Directive or Working Time Regulations 1998 covering the period up to and including 31 March 2021) in the event of individual settlements being offered and unreasonably rejected.
4.2 The trade unions confirm that the corrective payments are the best resolution achievable through a collective Framework Agreement.
4.3 The trade unions confirm that they will recommend the corrective payments to members as a preferable alternative to taking further legal claims or pursuing existing claims relating to overtime payments in respect of any time in the period up to and including 31 March 2021. The trade unions note that, once the corrective payments are implemented, any further legal claims based on annual leave payments not taking into account overtime payments in respect of any time in the period up to and including 31 March 2021 which are made despite the terms of the Framework Agreement are likely to be deemed without merit.
4.4 The trade unions agree that they will not provide any support for individuals who pursue future legal claims, against employers listed in Annex 1 of the NHS Terms and Conditions of Service in either the Employment Tribunal or the County or High Court in connection with taking ‘overtime’ into account for the calculation of paid annual leave, under section 13.9 of Agenda for Change or the Working Time Directive or Working Time Regulations 1998 up to and including 31 March 2021, which claims are of the nature of the claims resolved and corrected by the terms of this Framework Agreement. For the avoidance of doubt, nothing in this Framework Agreement is intended to limit or prevent a trade union from providing support and assistance to members in respect of securing a corrective payment.
4.5 It is agreed that it is the aim of the parties that existing and ongoing claims in either the Employment Tribunal or the County or High Court shall be resolved at a local level between claimants and NHS organisations, with the trade unions facilitating such resolution.
12 March 2021
Signed by:
| Name | Role |
|---|---|
| Jon Lenney | Employer Side Chair of the NHS Staff Council and Director of Workforce & OD, Manchester and Trafford Local Care Organisation |
| Sara Gorton | Head of Health, UNISON and Staff Side Chair of the NHS Staff Council |
| Rachel Harrison | National Officer, GMB |
| Colenzo Jarrett-Thorpe | National Officer, Unite |
Annex C
1. The data provided in this section for the protected characteristics of the agenda for change workforce working in NHS trusts and CCGs has been sourced from data published by NHS Digital for the period to the end of September 2020.
2. The data can also be found on NHS Digital’s website.
Figure 1: Agenda for change workforce by gender
| Gender | NHS Trust and CCG Workforce | Completed any additional activity | Not eligible for corrective payment | Eligible for corrective payment |
|---|---|---|---|---|
| Female | 80% | 78% | 82% | 73% |
| Male | 20% | 22% | 18% | 27% |
Figure 2: Agenda for change workforce by disability
| Disability | NHS Trust and CCG Workforce | Completed any additional activity | Not eligible for corrective payment | Eligible for corrective payment |
|---|---|---|---|---|
| Disabled | 4% | 4% | 4% | 4% |
| Not disabled | 75% | 75% | 75% | 75% |
| Not disclosed | 11% | 12% | 11% | 12% |
| Unknown | 10% | 9% | 9% | 10% |
| Disabled | 4% | 4% | 4% | 4% |
| Not disabled | 75% | 75% | 75% | 75% |
Figure 3: Agenda for change workforce by ethnicity
| Ethnicity | NHS trust and CCG Workforce | Completed any additional activity | Not eligible for corrective payment | Eligible for corrective payment |
|---|---|---|---|---|
| Asian or Asian British | 8% | 7% | 7% | 7% |
| Black or black British | 6% | 4% | 4% | 4% |
| Chinese | 0% | 0% | 0% | 0% |
| Mixed | 2% | 1% | 1% | 1% |
| White | 78% | 82% | 82% | 83% |
| Any other ethnic group | 2% | 2% | 2% | 2% |
Figure 4: Agenda for change workforce by age
| Age | NHS trust and CCG Workforce | Completed any additional activity | Not Eligible for corrective payment | Eligible for corrective payment |
|---|---|---|---|---|
| Under 25 | 6% | 6% | 6% | 5% |
| 25 to 34 | 24% | 25% | 26% | 24% |
| 35 to 44 | 23% | 22% | 23% | 22% |
| 45 to 54 | 26% | 25% | 23% | 26% |
| 55 to 64 | 19% | 19% | 18% | 20% |
| 65 and over | 2% | 3% | 3% | 3% |
Figure 5: Agenda for change workforce by sexual orientation
| Sexual orientation | NHS trust and CCG Workforce | Completed any additional activity | Not eligible for corrective payment | Eligible for corrective payment |
|---|---|---|---|---|
| Bisexual | 1% | 1% | 1% | 1% |
| Gay or lesbian | 2% | 2% | 2% | 2% |
| Heterosexual or straight | 72% | 72% | 73% | 71% |
| Other | 0% | 0% | 0% | 0% |
| Undecided | 0% | 0% | 0% | 0% |
| Not Stated or Unknown | 26% | 25% | 25% | 26% |
Figure 6: Agenda for change Workforce by religion
| Religion | NHS trust and CCG Workforce | Completed any additional activity | Not eligible for corrective payment | Eligible for corrective payment |
|---|---|---|---|---|
| Atheism | 13% | 14% | 14% | 13% |
| Buddhism | 0% | 0% | 0% | 0% |
| Christianity | 45% | 45% | 45% | 44% |
| Hinduism | 1% | 1% | 1% | 1% |
| Islam | 3% | 2% | 2% | 2% |
| Jainism | 0% | 0% | 0% | 0% |
| Judaism | 0% | 0% | 0% | 0% |
| Sikhism | 1% | 0% | 0% | 0% |
| Other | 7% | 8% | 8% | 8% |
| Not disclosed | 21% | 22% | 21% | 22% |
| Unknown | 8% | 8% | 8% | 9% |
Figure 7: Agenda for change Workforce part-time and full-time staff by gender
| Staff group (male) | Estimated headcount | Of which full time | Of which part time | Percentage who work part time |
|---|---|---|---|---|
| Ambulance staff | 10,800 | 9,600 | 1,200 | 11% |
| Central functions | 38,000 | 35,000 | 3,000 | 8% |
| Hotel, property and estates | 33,000 | 24,400 | 8,600 | 26% |
| Managers | 11,200 | 10,500 | 700 | 6% |
| Midwives | 100 | 100 | - | 27% |
| Nurses and health visitors | 40,100 | 33,700 | 6,400 | 16% |
| Scientific, therapeutic and technical staff | 41,100 | 33,700 | 7,400 | 18% |
| Senior managers | 5,800 | 5,300 | 500 | 8% |
| Support to scientific, therapeutic and technical staff | 16,000 | 13,400 | 2,600 | 16% |
| Support to ambulance staff | 12,700 | 11,200 | 1,500 | 12% |
| Support to doctors, nurses and midwives | 47,400 | 38,400 | 9,000 | 19% |
| Total | 256,200 | 215,000 | 41,000 | 16% |
| Staff group (female) | Estimated headcount | Of which full time | Of which part time | Percentage who work part time |
|---|---|---|---|---|
| Ambulance staff | 8,100 | 6,100 | 2,000 | 25% |
| Central functions | 92,100 | 60,800 | 31,300 | 34% |
| Hotel, property and estates | 47,400 | 12,800 | 34,600 | 73% |
| Managers | 18,100 | 14,300 | 3,800 | 21% |
| Midwives | 28,700 | 10,600 | 18,100 | 63% |
| Nurses and health visitors | 322,500 | 193,500 | 129,000 | 40% |
| scientific, therapeutic and technical staff | 148,500 | 80,200 | 68,300 | 46% |
| Senior managers | 7,800 | 6,500 | 1,300 | 17% |
| Support to scientific, therapeutic and technical staff | 63,100 | 34,700 | 28,400 | 45% |
| Support to ambulance staff | 14,500 | 10,000 | 4,500 | 31% |
| Support to doctors, nurses and midwives | 282,000 | 146,600 | 135,400 | 48% |
| Total | 1,032,800 | 578,500 | 454,500 | 44% |
Source – DHSC Analysis of Electronic Staff Record