FACT S E R V I C E
189 Paid overtime is cut for half a million workers
Merger activity is still at a historic low level
190 Zero hours contracts at Gatwick Airport
Increase in leave for parents is agreed by EU
Annual Subscription £70.25 (£59.50 for LRD affiliates)
Paid overtime is cut for
half a million workers
The number of people working paid overtime in
the UK has fallen by nearly half a million in the last
year to just under four million, according to a TUC
analysis of official figures.
Data shows that in summer 2009, 15.8% of employ-
ees in the UK earned paid overtime, a fall of 1.5
percentage points on a year earlier. Employees
were working an average of six and a half hours
paid overtime a week this year, a fall of 12 minutes
on 2008.
The average amount of weekly overtime works out
at £2,888 a year for each employee; and workers
across the UK earned a total of £10 billion in paid
overtime, £1 billion less than last year.
The TUC analysis shows that the amount of paid
overtime has fallen steadily since records began
in 1998, when nearly one in four (24.8%) workers
earned paid overtime. The recession has acceler-
ated this decline.
TUC general secretary Brendan Barber said:
“These workers are the hidden victims of the reces-
sion. Job security remains the number one concern
for workers across the country, but the sharp drop
LABOUR RESEARCH DEPARTMENT
Published weekly by LRD Publications Ltd, 78 Blackfriars Road, London SE1 8HF. 020 7928 3649 www.lrd.org.uk
191 Inflation set to rise to end of next year
Public sector pensions have some advantages
192 Expenses cut but a 'pay' rise for peers
More pension schemes to close for members
Volume 71, Issue 48, 3 December 2009
in paid overtime shows that many people in work
are also suffering financially. Even those that are
still earning overtime are often no longer able to
claim double pay.”
Employees in manufacturing, transport and com-
munication (broadcasting, TV and radio produc-
tion, postal workers) — industries that traditionally
offer lots of overtime — have all experienced a
sharp drop in overtime over the last year of around
five percentage points.
www.tuc.org.uk/work_life/tuc-17293-f0.cfm
Merger activity is still
at a historic low level
Takeovers and mergers in the UK by UK companies
reached their lowest level since records began
over 20 years ago, the Office for National Statistics
(ONS) said.
The ONS reported that there were 49 takeovers
worth £1.7 billion in the UK by UK companies in
the third quarter — the lowest number of takeovers
since ONS records started in 1987.
The largest takeover was the £1.2 billion deal by
gas utility Centrica for North Sea gas producer
Venture Production.
190 Fact Service Volume 71 Issue 48

Takeover activity in the UK by foreign companies guaranteed hours or a minimum income at Gatwick,
was still at a very low level. There were just 18 deals the UK’s second largest airport, to replace perma-
worth only £0.8 billion and subsequently no deals nent workers being made redundant.
of great value.
Swissport, which provides baggage handling and
UK takeovers of companies abroad fell in number, check-in services at the airport, has dismissed paid
but held their value compared to the second quar- permanent employees and is replacing them with
ter. There were 17 takeovers worth a combined a casual workforce on zero hours contracts. The
£2.4 billion. new workers are forced to work daily shifts which
have been as long as 17 hours, starting at 6 am and
The largest deals were those by drugs group going on until 11 pm.
GlaxoSmithKline for US skin care company Steifel
Laboratories and by insurance group Amlin of the The union says the casualisation of Swissport’s
Belgium- and Netherlands-based Fortis Corporate Gatwick operation began earlier in November
Insurance from the Netherlands government. as the company prepared to make 55 permanent
baggage handlers redundant. The baggage han-
Mergers and takeovers involving UK companies
dlers were offered redeployment but only on part-
In the UK Overseas In the UK time contracts as Swissport claimed that it only
by UK by UK by foreign needed the workers during the early morning or
companies companies companies
evening hours.
Number Value Number Value Number Value
£bn £bn £bn
However, the casual workers are being employed
2003 558 18.7 243 20.6 129 9.3 for up to 17 hours a day. The company has repeat-
2004 741 31.4 305 18.7 178 29.9 edly rejected all Unite’s request for talks at the
2005 769 25.1 365 32.7 242 50.3
2006 779 28.5 405 37.4 259 77.8
conciliation service Acas, instead choosing to force
2007 869 26.8 441 57.8 269 82.1 through changes without agreement.
2008 558 36.5 298 29.7 252 52.6

2006
Madeleine Richards, Unite regional officer, said:
Q3 163 11.4 98 15.2 71 19.3 “Swissport’s ditching of full-time permanent em-
Q4 201 5.9 115 8.1 72 15.7 ployees for a hire and fire workforce at Gatwick
2007
is a scandal.”
Q1 191 5.6 108 4.5 61 6.4
Q2 212 10.1 105 17.6 75 51.5 www.unitetheunion.com/news__events/latest_news/hire_and_fire_disposable_lab.
aspx?lang=en-gb
Q3 258 7.8 141 9.9 80 15.0
Q4 208 3.2 87 25.8 53 9.2

2008
Q1
Q2
172
183
4.5
9.6
86
91
15.9
5.7
86
63
21.1
20.0
Increase in leave for
Q3
Q4
104
99
4.1
18.2
72
49
4.2
3.7
54
49
3.2
8.3 parents agreed by EU
2009 Parents will have the right to longer parental leave,
Q1 (r) 87 8.2 17 3.7 25 12.3 under new rules agreed by EU ministers.
Q2 (r) 52 0.8 26 2.4 20 0.6
Q3 (p) 49 1.7 17 2.4 18 0.8
The revised Directive on Parental Leave will give
(p) provisional (r) revised
each working parent the right to at least four
www.statistics.gov.uk/pdfdir/ma1209.pdf months leave after the birth or adoption of a child
— up from three months now.

Zero hours contracts at
Gatwick Airport
Baggage handlers at Gatwick Airport are up in
arms over changes to their contracts.
The Unite general union has warned of a dispos-
able labour force of workers employed without
At least one of the four months cannot be trans-
ferred to the other parent – meaning it will be lost
if not taken — offering incentives to fathers to take
the leave.
The new Directive also provides for better protec-
tion against discrimination and a smoother return to
work. It puts into effect an agreement between Euro-
pean employers and trade union organisations.
Volume 71 Issue 48
The main changes in the Directive are for longer
leave with each parent able to take four months off
for each child (previously three months).
The extra month cannot be transferred from one
parent to the other, thereby encouraging fathers
to take their leave. In the past many working fa-
thers have transferred their right to leave to the
mother.
There must be no discrimination — an employee ap-
plying for or taking parental leave will be protected
from any less favourable treatment for doing so.
Employees returning from parental leave will have
the right to request a change to work schedules,
but only for a limited period. In considering such
requests, employers will be obliged to balance the
needs of the employee as well as the company.
Governments and employers and trade unions will
be obliged to assess the specific needs of parents
of adopted children and children with a disability
or long-term illness.
Finally, the new rights will apply to all workers,
regardless of their type of contract (such as fixed-
term, part-time, agency workers); however the
possibility of a qualification period of a maximum
one year is maintained.
All matters regarding the paying of workers during
parental leave are left for Member States and/or
national social partners to determine.
The Directive will be adopted in the coming months
and then member states will have two years to
transpose the new rights into national law.
http://ec.europa.eu/social/main.jsp?langId=en&catId=89&newsId=650&furtherNew
s=yes
Inflation set to rise to
end of next year
Inflation is expected to finish the year in negative
territory and then rise during 2010, according to a
Treasury analysis of independent forecasters.
Retail prices inflation is forecast to range between
a 1.0% rise down to minus 2.1% in the final quarter
of the year — the midpoint forecast is minus 0.1%.
However, by the final quarter of 2010 inflation is set
to rise to as much as 4.4% down to 1.4% depending
on the forecaster — the median forecast is 2.9%.
Fact Service 191
The Treasury’s own forecast is for a 2.5% rise, al-
though that might change in Chancellor Darling’s
Pre-Budget Report on 9 December.
Earnings There is a wide divergence of views over
the growth in average earnings. They are expected
to have shown median growth of 1.4% over 2009
— the range is for growth of between 3.5% down
to just 0.7%.
Next year’s forecasts throw an even wider net with
the range running from a 4.3% increase down to a
2.0% cut. However, the midpoint forecast is for a
2.3% rise.
www.hm-treasury.gov.uk/d/200911forcomp.pdf
Public sector pensions
have some advantages
Public sector workers’ pension benefits add up to a
higher percentage of pay than that of their private
sector counterparts, according to the respected
think tank, the Institute for Fiscal Studies (IFS).
However, the relative edge enjoyed by public serv-
ants varies widely between those with low and
high skills.
The pension values differ between the two sectors
for four main reasons, the IFS says.
First, most public sector workers are able to claim
their pensions at an earlier date than workers in
the private sector, which means that the accrual
of extra pension rights is worth more to public
sector workers.
Second, public and private sector workers have
different earnings profiles over the lifetime. Public
sector male graduates, for example, typically have
peak real earnings in their late 50s whereas private
sector graduates’ earnings peak ten years earlier.
Third, job tenures in the public sector are longer
than in the private sector, and pension entitlements
are typically easier to transfer between employers
in the public sector than in the private sector.
However, the gap between men with a “low educa-
tion” (that is, school leavers at age 16) is only 1.7
percentage points between workers in the two
sectors. In the public sector a pension as a per-
centage of earnings is 20.1% against 18.4% in the
private sector.
192 Fact Service
And for women the gap is even smaller — women of
low education get an average pension worth 15.3%
of earnings against 15.0% in the private sector — a
gap of just 0.3 percentage points.
Overall, the IFS authors put the gap between public
and private sector pensions at 6.6 percentage points,
with an average public sector pension worth 25.5%
of earnings and a private sector one worth 18.9%.
www.ifs.org.uk/pr/ps_pensions.pdf
www.ifs.org.uk/wps/wp1707.pdf
Expenses cut but a 'pay'
rise for peers
A review into the system of Lords allowances
initiated after the expenses scandal has recom-
mended that peers should receive what amounts
to a pay rise.
In June 2009, the prime minister Gordon Brown
asked the Review Body onSenior Salaries (SSRB)
to reassess the allowances Lords receive after it
emerged that some Lords were abusing the sys-
tem with wheezes. These included turning up to
the House of Lords for as short a period of time
as necessary in order to be able to claim their
daily allowance.
The SSRB has recommended a tightening of the
rules, with peers being requested to produce re-
ceipts for expenses, but it also recommends the
setting of a new single allowance, more than the
sum of the two allowances it could replace.
Under the present system, Lords could claim a £75
daily office costs allowance and an £86.50 daily
subsistence allowance.
Instead the daily allowances should be merged,
with peers given a single daily allowance of £200,
which amounts to a £38.50 increase. However, the
board also recommended that peers’ existing £174
flat rate allowance for overnight accommodation
should be cut to £140.
The SSRB said if a peer were to attend the Houses
of Parliament on all 150 sitting days it would result
in an income of around £30,000, in addition to ex-
penses for travel and overnight accommodation.
Peers would be able to claim only for rent and
hotel bills and would have to provide receipts or
rental agreements. Lords who own their own homes
in London will be able to claim only council tax and
Volume 71 Issue 48
will no longer be able to claim for mortgages.
In total the review body made 26 recommendations
over financial support for members of the House
of Lords.
www.guardian.co.uk/politics/2009/nov/26/peers-lords-allowances-pay-rise
www.ome.uk.com/New_financial_support_for_the_House_of_Lords.aspx
More pension schemes
to close for members
Computer group Logica has become the latest em-
ployer to close its final salary pension scheme.
The group said that it planned to close the defined
benefit scheme to new employees from the second
quarter of next year.
Up to 470 of the firm’s longest-serving employees
will be affected and, instead, given the chance to
join an inferior defined contribution scheme, the
Times reported.
An existing defined contribution scheme for an-
other 3,200 Logica employees in the UK will also
be closed. Members of that scheme will be offered
the opportunity to join the new scheme.
Mobile phone group Vodafone is also planning to
close its final salary pension scheme to roughly
4,000 of its employees.
Vodafone has sent a letter to staff informing them
of a consultation exercise, ahead of a planned
closure of the defined benefit scheme in April, the
Financial Times reported.
The company said it was making the move because
of the rising cost of defined benefit pensions, but
added that it plans to “substantially improve” the
defined contribution pension programme.
“This will result in pension benefits that are fair
to all employees, sustainable in the long term
and affordable for employees and the company,”
Vodafone said.
www.personneltoday.com/articles/2009/12/02/53238/logica-to-close-final-salary-pen-
sion-scheme.html
www.personneltoday.com/articles/2009/11/26/53167/vodafone-moves-to-close-final-
salary-pension-scheme.html
Designed and printed by RAP Spiderweb Limited, Clowes Street, Hollinwood,
Oldham OL9 7LY Telephone 0161 947 3700