Nurses have threatened to take employers to tribunal if they try to stop incremental pay rises, after research suggested that NHS providers would cut by pay costs by £1.9bn this year.
A survey of 111 acute, mental health, community and ambulance trusts carried out by the Foundation Trust Network has estimated that £3bn would be cut from the provider budget by the end of 2011-12.
As trusts were planning to make 63% of their savings through reductions to the paybill through spending less on staff, this amounts to a £1.9bn cut in pay costs in the current financial year.
For mental health organisations the emphasis on pay is even greater, accounting for three quarters of cost savings, as these trusts typically have lower drugs and equipment costs than acute providers.
Unite chief officer for nursing Barrie Brown told Nursing Times that any attempts to freeze incremental pay rises or opt out of the Agenda for Change pay structure would be treated as a breach of contract.
He told Nursing Times: “The majority of NHS staff have the contractual right to incremental progression… quite clearly this would constitute a breach of contract and we would have to make a legal challenge.
“If the trust stops incremental progression, then at the point where pay should have gone up, that becomes a financial loss. That would be considered an unlawful deduction”
Mr Brown argued that the national agreement was “vital to the NHS”, as it ensured that staff were developed and that their growing skills and competencies were reflected in their salaries.
He said trusts which attempt to impose across the board freezes could be faced with “hundreds or thousands” of tribunal claims.
But, Mr Brown added, industrial action would not be the “first port of call” for unions, but said compulsory redundancies should be “way down the agenda” for employers.
Health minister Anne Milton was heckled last month at the Royal College of Nursing annual congress when she suggested the government would be encouraging trusts to discuss local increment freezes with unions. The conference voted for a ballot on industrial action if any trust attempted to impose such a measure (news, page 2, 19 April).
However, employers are still considering changes to national pay structures. The Foundation Trust Network survey found trusts would make most of their pay savings through natural wastage and restricting bank and agency usage, but said “in some cases” redundancies would be necessary.
On freezing Agenda for Change pay increments – which unions have previously rejected nationally – the network’s director Sue Slipman said: “The logic of where we are is that they will have to be revisited.”
She said the paybill for trusts “isn’t affordable in its current form” and “organisations will want to have conversations with their staff which are realistic about money”.
She added: “I can’t say whether people will break away from national terms and conditions – I’m sure this is something which is being looked at.”
Some organisations, such as Salford Royal Foundation Trust, have opted to withhold increment rises from staff who have high sickness absence records or face disciplinary action.
Salford chief executive David Dalton also questioned the automatic right to move up the pay scale. He said: “Incremental pay ought to be made available on the assessment of contributions, rather than just the anniversary of appointment. But freezing is a very blunt instrument – we will do everything we can to avoid that.”
Meanwhile Andrew Foster, chief executive of Wrightington Wigan and Leigh NHS Foundation Trust, said he was “interested” in the incremental freeze option. He said: “Something like it must have to come in, in the next two years.”
He also said he would consider hiring new staff on terms and conditions outside the Agenda for Change agreement.
Unite and other unions, including Unison and the Royal College of Nursing, are currently meeting to discuss how to oppose wider threats to both pay and pensions (see right).