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Vertex Circular - March 2012

26 March 2012

Firstly, a thank-you to all members (and non-members) who supported last week's 'Red Shirt Day' - a collective silent statement about the general problem of low-pay in Vertex/Dingwall, and the specific problem of the outstanding pay review for 2011.

Meeting with John Holmes:

At lunchtime on the same day TSSA reps met with John Holmes, who heads up the Vertex department responsible for local government contracts.

John recognised the effort which was being made by staff in Dingwall. It was “a centre of excellence.” It had “a great team” with “a great retention.” The contract with Westminster – “a flagship local authority” – was “performing very well.”

But the company was now operating in a more hostile economic climate. In 2009 there had been an optimism that Vertex could achieve the status of “a billion-dollar company” (i.e. win contracts to that value). But the ensuing economic downturn had resulted in sharper competition between outsourcing companies for less work.

After giving an update on the TUPE transfer of staff in Dingwall (and elsewhere) from Vertex Data Science Ltd. into Vertex Public Sector Ltd. (VPSL), John explained that the possible share buy-out of VPSL would make it easier for VPSL to put in bids for (and potentially win) big contracts, as VPSL would be part of a much larger company.

In response, TSSA reps raised the issue of staff concerns about rates of pay:

Pay Rises Below Inflation:

First and foremost, reps pointed out that in recent years pay rises have consistently lagged behind the rate of inflation.

The relevant figures are below. With the exception of 2009, when inflation was negative, pay rises since 2007 have been lower than inflation, and sometimes substantially so.

July, 2007: pay rise: 2.75%; rate of inflation: 3.8%.

July, 2008: pay rise: 3.00%; rate of inflation: 5%

July, 2009: pay rise: zero; rate of inflation: -1.4%.

July, 2010: pay rise: 1.6%; rate of inflation: 4.8%.

July, 2011: pay rise (to date): zero; rate of inflation: 5%.

Impact of Public Sector Pay Freeze:

It was true that many employees in the public sector were subject a government-dictated pay freeze (both Westminster and Holyrood governments). But that was no reason not to pay Vertex staff an increase.

If that pay-freeze policy were applied to Vertex staff, then they would in fact receive a pay rise. This is because the policy states that anyone paid less than £21,000 a year should receive an annual pay rise of £250. The relevant extract from the Scottish government’s policy reads:

“2.9 Employers covered by the policy are required to:

- apply a Scottish Living Wage. This should be set at an annual equivalent of £14,094. In circumstances where conditioned hours are less than 37.5, the full-time annual salary must correspond to an hourly rate of at least £7.20 per hour.

- ensure all staff earning less than £21,000 per annum receive a minimum annual pay increase of £250 (underpin). The policy expectation is that the £250 underpin will be applied on a pro-rata basis to part-time employees.”

Employees Pay the Price for VPSL Sale:

Moreover, the TSSA reps pointed out, it had been Vertex employees in Dingwall (and elsewhere) who had been paying the price for making the public contracts sector of Vertex an attractive option for a new purchaser.

Staff had seen the scrapping of the final-salary pension scheme, the replacement of the Vertex redundancy policy by inferior statutory redundancy payments, and successive pay rises which lagged behind inflation.

At the same time, as Vertex itself acknowledged, it was the effort put in by staff in Dingwall that ensured that the Westminster contract met its performance targets.

The venture capitalists who own Vertex could therefore look forward to selling off VPSL at a fat profit, while VPSL employees would be left with lower living standards and worse terms and conditions than when Vertex was bought out in 2007.

Absence of Pay Talks: 

In October of last year union representatives had been informed that the company would not be carrying out its annual pay review at that time – although it was already overdue – due to the company’s alleged financial situation. A communication to this effect had also been issued.

But nothing had been heard about the pay review until the matter had been raised by one of the union reps during the current TUPE transfer consultation – some four months later.

The response from Human Resources had been that the question of a pay review would be pursued further outside of the TUPE consultation. In fact, though, the pay review had not been subsequently addressed outside of the TUPE consultation. There had been no progress, in other words, since October of last year.

Next Steps:

Last Thursday’s meeting with John Holmes was not a pay-negotiations meeting. It was, however, an opportunity for the union to raise the issue of concerns about low pay, and to impress upon senior management that the pay rise for 2011 was still being pursued by the union.

John undertook to convey the concerns expressed by the reps to the relevant senior managers in the company’s public sector department, and also to ensure that a meeting was arranged with Vertex Human Resources to discuss the outstanding pay review.

Following on from last Thursday’s ‘silent statement’ the TSSA will be organising other events to maintain its fair pay campaign. If you have any ides for similar events in the future, please pass them on to one of the workplace reps.

Date: 26/03/12

TSSA Circular 85/2012


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