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Shropshire Council to dismiss all staff in pay cut

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Shropshire Council to dismiss all staff in pay cut

Shropshire Council to dismiss all staff in pay cut
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Dismissal letters have been sent to all of Shropshire Council's 6,500 employees.
The letter states that all council staff will be dismissed on 30 September and immediately rehired, but only if they agree to a 5.4% pay cut.

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The council said it was following a legal process in order to introduce the changes to terms and conditions which is commonly known as "dismissal and re-engagement"

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Jimmy Donaghey, Associate Professor of Industrial Relations at Warwick Business School at the University of Warwick, said: "While it may be legal it's considered quite bad practice."

If the council succeeds how long before other councils and companies follow suit?

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19 REPLIES
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Re: Shropshire Council to dismiss all staff in pay cut

I went through that process 30 years ago but fortunately ended up better off in the, across the board wages and salaries restructuring.
In my case the company Viners Ltd closed and reopened as Viners (Sheffield) Ltd re-employing all ex-employees who wished to rejoin the company.
Some didn't and lived to regret it.
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alanf
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Re: Shropshire Council to dismiss all staff in pay cut

"The authority said it had to save £76m due to reduced government funding and pay cuts would avoid it having to make 400 permanent redundancies."
I wonder what the age profile is of its staff. I suspect that older staff will be better off accepting redundancy payments than being re-employed. There will be redundancy benefits in going and potential future loss of pension benefits in staying (if they have accrued pension rights based on the best of their final few years). That being the case I wonder how much savings will be achieved. Perhaps more than 400 permanent redundancies will occur but of those staff who choose to go instead of those that are least needed.
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Re: Shropshire Council to dismiss all staff in pay cut

I wouldn't imagine redundancy pay would be more than the legal minimum so this would not be too generous even for long serving employees.
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Re: Shropshire Council to dismiss all staff in pay cut

A 5.4% paycut, along with an inflation rate of over 5% means an effective pay cut of over 10% this year. In fact:
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A 34-year-old worker, who also did not wish to be named, estimated that the pay cut included with the two-year pay freeze, added to increases in the cost of living and changes to public sector pensions could account for as much as 20% of her salary.
She said: "Obviously I feel very unhappy and scared that this can be done and that I could be out of a job come October.
"I feel disillusioned and undervalued and I've really lost trust in the council as an employer."
Another worker said with the pay freeze, cuts and pension changes he was going to lose the equivalent of almost 25% of his salary.


I imagine that it's not just pay that the changes will affect, but other conditions as well.  Hopefully the entire workforce will call their bluff.
alanf
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Re: Shropshire Council to dismiss all staff in pay cut

Quote from: artmo
I wouldn't imagine redundancy pay would be more than the legal minimum so this would not be too generous even for long serving employees.

I don't know about more recent joiners but I believe any staff that joined many years ago and nearing retirement age will have generous redundancy rights under the terms of their Terms & Conditions.
(It is many years since I worked for a local authority so it is possible that I am mistaken about the current situation.)
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Re: Shropshire Council to dismiss all staff in pay cut

As long as the same dismissal letter is sent to the senior executives of Shropshire Council, I'd regard this as a smart move. Then for the next year only re-employ staff (at a fair salary) when a need is demonstrated for the post. There is still substantial over-staffing in many local authorities and many unnecessary roles. If the waste is eliminated perhaps we could then get back to having fairly paid local government officials doing a genuinely useful job.
If this situation was in private commerce and the company expenditure greatly exceeded income the company would go bust and all the employees would receive little in the way of compensation.
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Re: Shropshire Council to dismiss all staff in pay cut

I can only speak for my own Authority (Essex), and then only really for Trading Standards, but I can tell you that we were all working flat out even before we made 6 posts (out of around 60) redundant in April.  There is no slack to take up.  There is only one thing we can do, and that is to decide which bits of the job don't get done.  The problem is that the people I work with are committed to doing the job, and therefore feel guilty if they see a scam going unchallenged or a vulnerable consumer unsupported, or a business with a genuine need for support and advice not helped. And so they do it anyway, and put themselves under even more pressure to get the job done.
You're right, a business that can't afford to pay its staff goes bust, and a business that works its staff too hard, with a staff that feels undervalued and unappreciated, which feels that their work is being constantly undermined by the very people who should be supporting them, then that business has huge sickness levels, and eventually no staff, or at best staff that can't get work elsewhere.
Fortunately for the public of this country, the majority of Local Government staff do the job they do, because they genuinely want to help people, or the whole edifice would have collapsed years ago.
John
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Re: Shropshire Council to dismiss all staff in pay cut

Public sector workers often claim they earn less than the private sector.  Here's an interesting item.  Look at the table produced by the ONS which proves differently.
Public Sector Pay


itsme
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Re: Shropshire Council to dismiss all staff in pay cut

A couple of weeks ago at work we were discussing the average wage and there was a disagreement on the figure. So I suggested that they do a search on the internet and was directed to the ONS and I was very surprised reading one paragraph about public workers earning more the private workers which must be the same paragraph that the Daily Mail has picked on.
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Re: Shropshire Council to dismiss all staff in pay cut

You know what they say about statistics ...
I wonder how they worked out job equivalences - there are no Trading Standards Officers in the private sector.  There are nurses, but I believe that they do get paid more in the private sector.  I understand that teachers often get paid less in the private sector, but that's because public schools don't actually insist on teaching qualifications to take on teachers (and pay them less as a consequence).
Yes I've got a pension - that I pay for, so don't through that one in.
Isn't it amazing how words can be used to twist meaning.  The "average" worker works for X hours per week.  All they've proved is that there are more part time workers in the public sector.  If you work less than the normal 37 hours per week, then your pay is cut pro-rata.  So that's a complete red herring.
Of course they don't count company cars. I don't know an employee of the local council that has a company car, but I know someone who works for Fords that has 2.  Of course it doesn't count the self employed, and if it did it wouldn't get it right.  The self employed do everything possible to show the minimum "profit" so they pay as little tax as possible.
By making assumptions and choosing what you measure, you can prove black is white, if that's what you want to do.
itsme
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Re: Shropshire Council to dismiss all staff in pay cut

Quote from: hulls
Isn't it amazing how words can be used to twist meaning.  The "average" worker works for X hours per week.  All they've proved is that there are more part time workers in the public sector.  If you work less than the normal 37 hours per week, then your pay is cut pro-rata.  So that's a complete red herring.

The table did state the figures are based on full time workers. To be classed as a part time worker I believe you have to work less than 24 hours per week.
Teds31
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Re: Shropshire Council to dismiss all staff in pay cut

Getting back to the original topic, i dont see it working, I worked for British Rail in 1988 when they decided to privatise it and they offered 40,000 people redundancy of course the longest serving took the money (as I did) and within 2months they were asking us to come back at improved saleries. I didnt go back as retirement was too good but lots did and made good money,a lesson to be learnt for these councils.
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Re: Shropshire Council to dismiss all staff in pay cut

Quote from: itsme

The table did state the figures are based on full time workers. To be classed as a part time worker I believe you have to work less than 24 hours per week.

Yes, and there are a lot of people - often young mums, who work term time only, or short hours, perhaps 30 hours a week or less, so that they can juggle child care.  They count as "full time", but they're not paid for 37 hours obviously, only for the hours they work
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Re: Shropshire Council to dismiss all staff in pay cut

Rather than continuing to try to pick holes in the ONS figures perhaps you would like to provide some facts yourself.