Unite Response to the Draft proposals to amend Regulation
20 of the Local Government Pensions Scheme (Benefits, Membership
and Contributions) Regulations 2007 (the benefit regulations) to
provide a third tier of ill health provision.
The workplace is
unfortunately not always for everyone a safe and healthy place to
be. Dame Carol Black’s Review of the Health of Britain’s working
Age Population; the Black Review published in October 2007 took
evidence from the Institute of Employment Rights that there were
over 600,000 new cases of work-related ill health occurring every
year. Local Government as a major employer in the economy will have
its fair share of such cases.
The Union is committed to a process of support and
rehabilitation for those with illness in the workplace. An employer
must comply with its duties under the Disability Rights Act 1995
and additionally we would wish to see as an aid to rehabilitation,
employers exercising every possible discretion to allow employees
work on reduced hours or to allow for working from home without
loss of pay.
It is though recognised that employers do regrettably use ill
health as a means or opportunity to terminate employment before the
employee has reached the end of their contractual paid sickness
absence period.
In principle this is subject to the overarching statutory
‘fairness’ and the employers procedures dealing with dismissals but
it is in practice the experience of many of our members that many
dismissals on ill health are such that members fall into the
unacceptable trap of being too sick to work, sick enough to be
dismissed but not sick enough to access their pension.
It was for this reason therefore that the union was in favour
of an approach to ill health dismissals that offered something more
to those members than was currently on offer and for which we
originally put forward views in favour of some kind of ‘third
tier’.
Definitions
The
Consultation is flawed by the lack of definitions relating to key
terms. There is no definition of 'reasonable period', in respect of
the border between Tier 2 and Tier 3 benefits, of 'quite soon' in
relation to Tier 3.
The 'quite soon' provision should be clarified in a way which
means it is effectively dropped as Tier 3 benefits should be
available even if the individual is immediately capable of gainful
employment, if they have not obtained such employment.
Permanency
The current rules for ill health provide that in order to
qualify you must be “permanently incapable of discharging
efficiently the duties of your employment or any other comparable
employment with your employing authority’. This test has
provided us with many difficulties in the past and It is with
regret that we see going forward a continuing test of ‘permanency,’
and for these purposes we mean till age 65, for this third tier of
ill health provision. It has provided for difficulties in the past
as evidence of permanent incapacity can be difficult to
prove.
A particular case for example is someone with an illness such
as M.E. where doctors can be reluctant to say that someone will not
get better after some years but where it is obvious that that
person cannot work for the present time. There are many such
examples of illness of this nature such as work related stress and
it had been hoped for that this third tier for ill health provision
would do away with this requirement for permanency so that persons
with illnesses of this type could be helped.
It is with regret therefore that we see in the proposed
amendments to Regulation 20, a continuation of the requirement that
incapacity be ‘permanent’. These draft regulations are very
different from the original proposals on which we were first
consulted. The Trade Union side expressed their concerns to
the then Minister, Phil Woolas back in April following the
publication of the final benefit regulations for the new scheme.
The Trade Unions were dismayed by the substantial differences
between the draft regulations on which the basis of consultations
were carried forward and the final regulations that were laid on
the statue book. We therefore welcome this present opportunity to
comment further on the requirement for a permanency
test.
Compensation within the
scheme
Ill health is not easily compensatable for by a lump sum, as
it is always difficult to say how ill health matters may progress.
We would not wish to see ill health compensation even at a third
tier level be paid for outwith the pension scheme and we recognise
that many employers would be reluctant to have any kind of
scheme outwith the pension regulations which they had to
pay.
We would not wish to see employers being given a ‘discretion’
to make payments in this way and we welcome the fact that a third
tier of ill health provision should come from within the
scheme.
The proposed measures would provide local authority employers
with the powers to award benefits for those scheme members who are
permanently incapable of their local authority employment but are
judged by an occupational health practitioner to be capable of
gainful employment quite soon after leaving that
employment.
The first issue as mentioned above is with the definition of
permanency. This can be further illustrated by a member who
is for example a driver who becomes unfit for work following on
from a diagnosis of diabetes. They may lose their driving
licence and so become incapable of doing their own job. But medical
treatment may stabilise their condition and improve it to such an
extent that they may well regain their driving license at some
point. If the diagnosis has to be of permanency the person may well
not qualify.
We believe that insufficient attention has been given to the
position of drivers generally and particularly to the position of
bus drivers within the LGPS and in admitted body status
organisations.
It is essential that the Tier 3 benefit is a definite
prescribed entitlement on the specified health and re-employment
conditions and not a discretion of employers. Any notions that such
a benefit is discretionary on the part of employers on any other
grounds, as is suggested by their being given powers to award a
benefit rather than an obligation to do so, is wholly
unacceptable.
A second issue is that of:
Certification by an independent
occupational health practitioner
The Union is
concerned that the level of adjudication on ill health matters
differs dramatically from one local administering authority to
another. To try to end that we would wish to see some form of Trade
Union approved board of medical experts or some form of similar
overview of pensions being granted as is seen in the Civil Service
Pension Scheme arrangements. The Union recognises the suggestion
that there be the setting up of an ‘ill health monitoring group’ as
a sub group of the Policy Review group but believes that this is a
too lax an approach. Instead their should be some form of
national organisation seeking to procure on a contractual basis a
service from occupational health physicians that conforms to
an approved code of practice and has some form of overview and
monitoring from an independent and accountable board with Trade
Union representation.
This seems a crucial first step if conformity of decision
making within bounds is to be achieved. If 33% of ill health
dismissals are, as is the GCLG estimate, going to go through this
route of a third tier of ill health provision then it is
particularly important that the medical practitioners who are going
to have to decide if the members condition is permanent and if the
member is going to be able to carry out ‘other gainful
employment within a reasonable time’ work to a common
standard.
It is helpful that gainful employment has been further
defined as it has as 30 hours a week for a year but this still
leaves considerable difficulty and latitude around the definition
which would need to be worked on. Additionally there need to be
much work going forward in seeking a workable definition for what
constitutes a ‘reasonable time’ under the proposals.
Reasonable time
The
Union believes that a ‘reasonable time’ under the regulations
should be three years. Payment of pension
should continue without review for this period provided that other
gainful employment was not found within this period. The Union
believes three years to be a ‘reasonable time’ for the following
reasons, bearing in mind that to qualify for an ill health medical
retirement under tier 3 the employee will already have
had:
a) A lengthy period of sickness absence and therefore
loss of income and the incumbent stress and uncertainty about their
future.
b) Considerable contact
with the medical profession through contact with their own GP,
their employer’s occupational health service provision and the
independent LGPS medical advisor.
c) A continuing
inability to do their own occupational job, such as driving and
therefore a need for possible retraining or re-education for some
time.
The above would
hopefully be of benefit to those of our members who are bus drivers
within admitted body status organisations and to many others for
whom the current ill health provisions of the LGPS, particularly
with reference to the permanency requirements, have been a bitter
blow.
Self-monitoring
Ill health retirement
benefits are an integral part of the LGPS Pension scheme. They
should not be seen as an adjunct to sickness absence monitoring nor
to injury benefit. The Union believes that their should be no self
monitoring in the form suggested. It is difficult for any
individual member to differentiate one form of income replacement
from another e.g. therapeutic earnings or to be able to assess for
how long any job they may take up may last.
Rather than have an
invidious system of self certification on employment being
undertaken, it would be better to have a system more akin to that
agreed in the NHS review whereby the pension is dealt with post hoc
the event on the basis of the amount of earnings in any tax
year. If then the member remains in continuous employment for more
than a tax year earning a considerable sum then it may be right for
them to lose some or all of their pension.
However to have the
position where the member has at an early stage to ‘declare’ their
as of yet ‘uncertain earnings’ to their ex- employer (whom they may
not have left on the best of terms) and then to have that employer
decide on an unchallengeable basis that those earnings constitute
‘gainful employment’ for which they will lose their third tier
benefit is totally unacceptable.
The proposals as
outlined also means that ‘gainful employment’ has no reference to a
level of earnings any greater that the assumed ‘national minimum
wage’ and that such earnings bear no relationship to the
members previous earnings. This coupled with the ability of
the employer to ‘suspend’ payment virtually at will would leave
these regulations in a state that was little short of an incentive
to employers to ‘get shot ‘ of people at minimum cost and then to
recoup any costs they did incur at the earliest opportunity.
Costs
The Government’s estimate that the third tier of ill health
provision equates to some 0.1% of payroll may be correct or not as
the case may be. However all scenarios for dealing with ill health
retirements have costs implications and ill health could be
treated by way of review at actuarial valuations times,
rather than have a self imposed cost limit placed on them at
this time.
Unite’s view has always been that those who are permanently
unable to do their jobs should get a pension and that there should
be some form of income replacement for those who are not
permanently incapable. Whatever else happens this proposed third
tier of ill health provision must not be allowed to be treated by
the employer as an easy means of making a one off cash payment of a
limited sum to get rid of employees they may not want or are having
difficulty managing or for them to be given their accrued
pension entitlements to date only to have them taken away on
‘review’ shortly thereafter.
It is accepted that no one at this time can tell exactly what
proportion of members retiring on ill health grounds will retire on
ill health provision under categories 1, 2, or 3. This will have to
be judged in the light of experience. There are though recognisable
trends for ill health dismissals to be going downwards in the
longer term.
Ill health retirement though under the third tier must not be
just a level of benefit intended to do no more than ‘tide people
over’ until such time as they can get another job. Neither should
the cost of providing ill health retirements under level 3 be used
as a means of getting rid of the promised underpin for those above
aged 45 in the present scheme for whom under level 2 the promise is
that they will be no worse off for the future than they may have
been under the old scheme arrangements.
Click
here to view the LGPS consultation document
