Background
The
introduction of annual hours at BNFL was part of the 'New
Contract' package of changes agreed in 1999.
This
brought in more flexible working arrangements intended to
improve operational effectiveness, use working time more
effectively and reduce the traditional reliance on overtime.
The annual
hours system is part of a total hours concept - a new
approach to working time - that incorporates a number of
banked hours, flexible start/finish times, variations in the
number and length of attendances and a 'credit time'
arrangement. Over 90 per cent of the company's employees are
covered by the new arrangements.
British
Nuclear Fuels is now an international company providing
integrated nuclear products and services to customers in the
UK and overseas. Around 22,000 employees work in four
distinct business groups: Spent Fuel and Engineering Group;
Magnox Generation; Fuel Manufacture and Reactor Services;
and Nuclear Decommissioning and Clean-Up.
Most of its
original sites are covered by one set of terms and
conditions of employment, and are situated in the north-west
of England, including Sellafield (Cumbria), Springfields
(near Preston), Capenhurst and Risley (both in Cheshire). It
also has small power stations at Calder Hall (Cumbria) and
Chapelcross (south-west Scotland). These sites employ about
10,000 employees.
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British
Nuclear Fuels Ltd - Annual Hours
Improved operational effectiveness, Better use
of working time and Less Reliance on Overtime
are results of Annual Hours at BNFL.
Winning Support for change
In 1997, the
company initiated a fundamental strategic
review, Beyond 2000, which involved reducing
costs across the business, while pushing for
world class performance as BNFL strove to become
a global provider of nuclear services. According
to senior management, achieving this goal would
involve 'significant change and improvement in
the way we organise our business and the ways in
which we work'. The company adopted a
partnership approach with its trade unions 'to
create the security, working environment,
rewards and relationships' needed to meet the
new challenges. The company recognises a number
of unions -Prospect (formerly IPMS), PCS, TGWU,
GMB, Amicus (a merger of AEEU and MSF from 2002)
and UCATT.
Wide-ranging
package of changes
The package of
major changes to terms and conditions was
encapsulated in the 'New Contract'. As well as
introducing annual hours, the main elements of
the agreement saw a radical reduction in the
number of employee grades (from 33 staff grades,
craft and general worker grades to five bands),
the consolidation of a series of bonus payments
and allowances (reflected in higher basic
pensionable pay) and the replacement of
service-related increments by a new system of
progression based on competencies and the
acquisition of additional 'skill sets'. New
incentive arrangements were also developed with
specified targets. Efforts to maximise effective
working time and promote operational
effectiveness included revised arrangements for
meal breaks, walking and changing time and shift
handovers. As well as being part of a two-year
pay deal from April 1999, the change package was
accompanied by two lump-sum payments a year
apart (of £150 and £500 respectively), linked to
successful implementation.
Extensive negotiations
During the period
of joint discussions which preceded the final
conclusion of the New Contract agreement in May
1999, management and union representatives
formed ten 'activity groups' to examine
different elements of the proposals. One of the
groups focused on reorganising working time. Its
remit was to discuss the current situation, come
up with a 'wish list' and deal with the possible
barriers to any agreement. During its
deliberations, fact-finding visits were
organised to companies where an annual hours
system was already in operation. By October
1998, the group had reported to the company
joint council- the union/ management negotiating
forum -that annual hours was a serious option,
although more work was required on the practical
aspects. The discussions that followed included
a presentation from a union regional official
with experience of negotiating the introduction
of an annual hours system.
Tackling the
overtime culture
For the company,
the problems with the current working time
arrangements were clear. Fluctuating workloads
resulted in employees having to work substantial
levels of overtime during peak times, while
being underutilised in slower periods of the
business cycle. This arrangement had resulted in
a fairly entrenched 'overtime culture'. At the
same time, however, reductions in staffing
levels had made the company overly reliant on
overtime in some areas since it was regarded by
some managers as a cheap alternative to
retaining full-time employees. The Working Time
Directive, health and safety issues and cost
considerations made tackling the issue more
urgent, especially as the number of overtime
hours being worked in some areas was deemed
'excessive' by the company.
Why annual hours?
In explaining the
adoption of annual hours to employees, the
company cited a number of reasons for the move:
-
to eliminate the 'long hours' culture prevalent
in many areas of the company
-
to increase operational effectiveness, with
employees completing work within standard hours
as far as possible
-
to provide a stable income for employees
-
to provide new opportunities for employees to
match work and domestic responsibilities more
easily
-
to reduce the time spent at work and increase
personal leisure time.
Selling it to employees
Some employees, faced with the loss of lucrative
overtime payments, were not too enamoured by the
proposed changes. In seeking to allay these
concerns, management and unions stressed to
employees the benefit of replacing overtime with
annual hours in terms of a guaranteed regular
pensionable income as the full total of hours
was paid for whether or not they were worked.
There would also be an opt-out for those whose
personal circumstances prevented them from
working additional hours under the annual hours
arrangements and for those who had never
previously worked overtime by choice. A set of
principles was also agreed governing the
operation of annual hours and the company was
able to balance any loss of income by some
employees by improvements to shift and other
allowances.
Timetable for the introduction of annual hours
October 1997 Negotiations commence
on the 'New Contract'
October 1998 Activity group reports
that annual hours is a serious option
May 1999 Unions and
management conclude agreement
August 1999 Employees vote to
accept New Contract
November 1999 Annual hours introduced
Getting the message across
During the negotiations, regular progress
bulletins had been produced for employees and
notices had been displayed which listed contact
details of the members of the negotiating team.
In the period before employees voted on the New
Contract in the summer of 1999, a major
communications programme was undertaken (the
changes had already been accepted by their union
representatives in May). A series of road shows
were held, led by the employee relations
director and the head of operations at Sellafield, the company's largest site, with
staff having the opportunity to put questions.
In some instances the team spent up to a week at
the larger sites. The roadshows were backed up
by a specially produced video explaining the New
Contract proposals and featuring senior
management and union representatives. Helplines
were also set up to deal with New Contract
enquiries. The main thrust of these
communications was the need to change the way
BNFL worked and that the new contract had been
developed 'to facilitate that change, to
increase management and employee efficiency and
increase pensionable pay'.
Questions and answers
A question-and-answer briefing on annual hours
was also placed on the company's intranet. The
questions focused on the issues being raised in
the discussions and presentations across the
sites. The intention was to supplement the
annual hours guidelines and principles document
which was distributed to all employees.
Sharing good management practice
Some managers had also expressed concern about
how annual hours would work in practice. The
company urged managers to share their thoughts
with each other on this, taking advantage of the
fact that some managers were more able and
inclined to think through the problems. The
company recognised that convincing line managers
was crucial to the successful implementation of
annual hours. The managers were also encouraged
to discuss any problems and possible options
locally with union representatives and
employees. Again, good examples of co-operation
were shared with other sites.
Although the annual hours system went live in
November 1999, the first few months were
regarded as a trial period, allowing managers
time to fine tune the arrangements and deal with
any problems that arose. To help with the
implementation, a number of 'champions' were
trained in the detail of annual hours and its
application. The champions were a mix of line
and HR managers and union representatives. A
rapid education process was also developed to
facilitate the administration and correct use of
the system.
Role of line managers
-
review the impact of annual hours and consider
in joint discussions with team members and
employee representatives how the new
arrangements will impact on current and future
workloads
-
plan and organise work arrangements
to minimise the use of banked hours, involving a
review of resource levels
-
discuss and agree a resourcing plan
with the head of department if resource levels
are inappropriate
-
identify and agree any additional
necessary actions which may be required to
maintain operational integrity.
How the system works
The annual hours system introduced at BNFL is
based on a combination of 'contractual' hours
and 'banked hours'.
The annual hours calculation
The annual hours totals - the 'available hours'
- comprise two elements:
-
-
contractual hours
normal hours of attendance (38.75 a week,
inclusive of 45-minute meal breaks) paid at
plain time
-
banked hours
100, 50 or 30 hours a year as appropriate to
cover additional hours worked outside the normal
hours of attendance, paid at T +1/4 of the grade
rate as a monthly pensionable supplement.
So for an employee with 100 banked hours, the
calculation is as follows:
Gross Contracted Hours: 52.18 weeks x
38.75 hrs/week = 2,022
Less: Holiday Hours: 33.5 days x
7.75 hours = -260
Plus: Banked
Hours
+100
Available
Hours
=
1,862
To determine the appropriate number of banked
hours for the different groups of employees,
data on the amount of overtime previously worked
was analysed. In the event, all shiftworkers and
shopfloor employees plus their first-line
supervisors have 100 banked hours per year,
higher-graded office-based staff, 50 and junior
office staff, 30.
Use of banked hours
The company's objective is for all work to be
completed within contractual hours as far as
possible. It hopes to achieve this by more
accurate prediction of workloads, better
deployment of resources and the use of 'flexible
attendances' (see later) and more effective ways
of working. Managers were also asked to 'think
outside the box' to come up with novel solutions
for more effective ways of working that would
prevent the need for using additional hours.
Paying for banked hours
The company pays for banked hours at T +1/4
through an 'annualised hours supplement', paid
in equal monthly instalments. Any banked hours
not used by the end of the year are written off
with no adjustment to this supplementary payment
(nor is the supplement reclaimed from people who
leave the company part way through the year).
Unused hours are not carried over to the
following year.
In the unlikely event that employees are ever
called upon to work more than their banked
hours, these are paid at plain time or
compensated through time off in lieu. However
the intention is that working hours should be
managed in such a way that no employee ever
comes close to exceeding the relevant annual
hours provision.
The only premium payment for additional
attendances is for Christmas Day (3T), Boxing
Day (2T) and New Year's Day (3T). Other public
holidays worked are recompensed by time off in
lieu.
Interim arrangements
When the scheme began in November 1999, half the
usual number of banked hours was allocated for
the remainder of the financial year. It was also
recognised that some areas, such as new plant
commissioning, could not function within this
framework and it was agreed that they could
operate an approved 'exceptions' arrangement for
a set period. These exceptions had to be
ratified by the company's joint council, with
precise details of who was covered and the end
date specifically stated. At the outset, there
were about six of these transitional
arrangements in place (covering a few hundred
employees) but there is now only one and this
will end soon.
Fair allocations
Although employees have a contractual obligation
to work banked hours if required to do so, the
company seeks to ensure that, through local
arrangements, such commitments are shared as
equally as possible. It does stress, however,
that the support of all employees is needed for
this principle and that in consequence they must
be prepared if necessary to work in different
areas or plants, for example.
Opting out of banked hours
The company accepts that some employees may have
real personal difficulties in fulfilling their
obligation to work banked hours under the annual
hours arrangements, as reflected by their
infrequent working of overtime in the past. In
such individual cases, a personal opt-out can be
agreed, but in practice very few are requested.
Protection arrangements
When an employee is transferred by the company
to another job, resulting in the loss or
reduction of any annualised hours supplement,
then he or she is entitled to a minimum of six
months' transitional payment.
When would banked hours be used...
Although the company's aim is not to use the
banked hours, it has set out guidelines on the
primary circumstances in which their use might
be necessary:
The appropriateness of decisions to use banked
hours are subject to joint review locally by
management and unions.
...and not used?
The guidelines also state when banked hours
should not be used. These instances should
instead be covered by contractual hours and
flexible attendance:
Flexible attendances
Another important element of the changes to the
organisation of working time at BNFL has been
the introduction of the concept of 'flexible
attendances' - a way of arranging attendance and
working hours to do work when the need arises,
rather than always working standard hours. The
hours have to be worked between the start of the
morning shift and 6pm on Mondays to Fridays.
Changes to standard attendances and hours are
treated as either 'regular' or 'irregular'.
'Regular' entails agreeing new rotas when
attendance is required involving Saturdays
and/or Sundays -for example plant/business
support where attendance is required every
weekend. 'Irregular' involves changing average
attendances/hours to deal with known
peaks/troughs in work demands or unplanned
events (e.g. some maintenance work where access
to plant is confined to weekends).
Credit time
Within a flexible attendance agreement, the
hours which employees can accrue if they work
more than average standard hours (38.75) are
called 'credit time'. These are subsequently
deducted from working hours later in the
financial year by taking time off on an agreed
and pre-determined basis. By the same token, if
employees work less than the standard hours and
owe the company hours, these are made up, by
agreement, at a later date. The rationale behind
credit time is that it enables work and
attendances to match, to the benefit of both
employees and the company. It also avoids or
minimises the need to use banked hours.
Reviewing the operation of annual hours
The annual hours guidelines commit all parties
to annual local reviews of the annual hours
system and flexible attendance arrangements.
However, any changes to the overall level of
annual hours is seen as a matter for
company-level negotiations.
Changing the culture
The company acknowledges that for the full
benefits of annual hours and working time
flexibility to be realised for employees and the
company alike, much depends on the better
planning of work. Line managers are central to
this and because they can no longer rely on
overtime, must instead get their resourcing
right. Ultimately, the company's goal is to
secure a culture change in employees' attitude
to working time, with, for example, a ten-day
break becoming just that, rather than a
potential opportunity to pick up some overtime,
and an acknowledgement that where they do work
extra time one week, the quid pro quo is time
off later, not overtime payments.
This case study is reproduced from the IDS
Report No.721 on Annual Hours, published in
2002.
The consultancy support in the design of
this scheme was provided by Philip Lynch, (then
Senior Partner with PLA) who is a Principal
Consultant with Workforce Logistics Ltd.
For further
details of our services, or to arrange a face-to-face or telephone
discussion, please contact
us.
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Workforce Logistics Ltd 2010
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