HMRC offers staff 'frankly embarrassing' 1% pay bump to give up flexible hours

Union warns officials off scheme as department rolls our permanent annual-leave selling scheme
Photo: John Flemming/Alamy

By Tevye Markson

11 Oct 2023

HM Revenue and Customs is offering officials a 1% pay boost to give up flexible working hours in an effort to increase staffing levels during peak times.

The department is launching a pilot of annualised hours for Customer Services Group staff, whereby employees give up the right to flexitime throughout the year in exchange for a slight pay bump.

HMRC is also set to permanently roll out an annual-leave selling scheme which allows its officials to sell some of their annual leave back to the department, following a trial in January. Union PCS has warned this will lead to “already overworked” lower-paid officials feeling they have to give up holidays to get higher take-home pay.

PCS has meanwhile called the 1% offer in return for flexitime arrangements “frankly embarrassing”.

Those signing up to the scheme would have their contract of employment changed to require them to work more hours during the weeks or months that the department considers to be periods of highest demand. They would lose their freedom to work flexibly.

Under the current flexitime system, which was introduced in 2021 as part of pay and contract reforms, staff can vary the hours they work, as long as they complete their contractual hours over a three-month period. They can also build up "flexi-leave" by working more than their contractual hours in a given period, giving them the ability to take time off in lieu.

Volunteers for annualised hours would give this up in exchange for 1% extra pay and a work pattern involving working fixed, longer hours for six months of the year, including June and December, and fixed, shorter hours during the rest of the year. HMRC could also call staff into work during unexpected peaks during quieter months.

Staff will need HMRC’s agreement to switch back to normal full-time working hours during the 12-month pilot if they later find the extra hours too much, PCS said.

PCS has told officials they should not volunteer for the scheme. It said the 1% pay offer is “frankly embarrassing”and would earn AO officers just over £4 more a week. It argued other departments that currently operate an annualised hours policy, such as the Home Office, reward staff much more generously.

The union said it is “prepared to discuss” proposals from HMRC for a system of annualised hours that “fully and fairly compensate members for the loss of flexible working hours”.

But it said the “derisory suggestion of less than £5 a week doesn’t even begin to open the door to talks of that kind”.

“Volunteering to give up the freedom to work flexibly, in favour of being told by the department precisely what hours you’ll be working, in what month, depending on whether they think they need you in or not; and all you might get for volunteering is less than £4 a week after tax, makes absolutely no sense whatsoever,” the union said.

“We strongly advise you not to volunteer.”

The union has urged HMRC to instead consider part-year appointments (PYAs) – employing additional staff, like the Passport Office does, for busy periods.

PCS said this is “an off-the-shelf solution for handling civil service workstreams with distinct peaks and troughs, that is already operating in areas such as the Passport Office; and where those PYAs work alongside full-year workers to provide additional resources, critically, on the same working conditions”.

It said this model would be nothing new for the department, which already has contract workers who operate solely during specific months of the year.

PCS said it has received no explanation from HMRC as to why using PYAs is not an option “other than – from the sound of it – they just don’t want to do it, and they just prefer the idea of having fewer people working flexible working hours”.

A spokesperson for HMRC said the trial of annualised hours will allow the department "to assess the benefits" for both customers and staff.

Annual leave policy ‘cynical’

PCS has also criticised the department's plans to push ahead with an annual-leave selling policy it trialled earlier this year.

HMRC will introduce a yearly process where officials can relinquish up to five days of annual leave, or the pro-rata equivalent for part-time staff, in exchange for their salary value.

Staff will still be legally required to take their statutory leave, which is 28 days including public holidays, and are able to sell a maximum of five days annual leave or pro-rata equivalent. There will be no option for staff to either buy additional annual leave or to buy back any leave they sell, according to PCS.

For 2023-24, the annual-leave sale window will open on 11 October and close on 31 October. Employees who sell leave will receive payment for it in their November pay.

PCS said it believes the scheme will lead to “poorer-paid members of staff feeling they have no choice but to work for longer than their better-paid colleagues”.

“With incidences of PCS members across the civil service relying on food banks, it’s clear to us that although management claim that selling leave designed for rest and recuperation is optional, the reality will be that some members will feel that they have no choice in the matter,” it said.

It described the HR policy as a “cynical way to paper over even more cracks in an under resourced department that wants to squeeze even more out of already over worked staff”.

An HMRC spokesperson said: “We continue to work with trade unions on any changes to how we work.

“Following an earlier trial, we’re giving colleagues the choice to sell some annual leave each year but there’s absolutely no obligation to do so.”

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