NHS terms and conditions of service resource hub

Apprentices from non-Annex 1 employers may be covered by this provision depending on the exact nature of their previous contract (e.g. whether they were on dynamic terms with the NHS) and whether the other eligibility criteria about the nature of the apprenticeship and its pay levels apply.

No, it does not as the job that medical apprentices qualify for is covered by different terms and conditions of service. This provision is not carried over into medical contracts. However, employers may choose to pay and fund these apprentices in a similar way, but this is for local determination.

If an apprentice moves to a different apprenticeship in a different NHS employing organisation, it will be for the new employer to determine eligibility for pay preservation, in line with section 1.25 of the NHS TCS Handbook. 

The change to the handbook is effective from 1 July 2024.  This means that there is no entitlement to the preserved rate of pay prior to this date.  If you are delayed in identifying your affected staff and moving them onto their revised pay point, then they will be entitled to have this backdated to 1 July 2024 but not before this.

The pay preservation provision applies to situations where an existing employee accesses an apprenticeship which on completion will qualify them for a role at the same or a higher band than their current post.

Where the role taken up on completion is at the same band (sideways move) promotion is not applicable and the employee will continue in their band and the provisions of section 1.18 will not apply.

Where the role taken up on completion of the apprenticeship is at a higher band, this will be a promotion and the employee will move to the entry point of that band and their pay step date will be reset.

In most cases this will produce an increase in earnings (basic pay plus any unsocial hours and/or recruitment and retention premium (RRP).

However, there may be some cases where it does not. The apprenticeship pay preservation provision only applies to the basic pay of the role the employee was in before they started the apprenticeship. Unsocial hours and RRPs are not covered by it.

However, if the employee was earning unsocial hours payments or had an RRP in the apprentice role in the 13-week reference period prior to promotion, the pay on promotion provisions in section 1.18 might apply.

For example,

If the employee was on band 2 as an apprentice and then went into a band 3 role on completion with substantially the same pattern of unsocial hours, this might otherwise result in a reduction in earnings. In such a case their salary would be maintained at the higher level until the pay rate in the new band does produce a higher salary.

Or  

If the apprentice role attracted an RRP but the role into which they are promoted at the end of the apprenticeship does not, their salary would be maintained at the higher level until the pay rate in the new band does produce a higher salary. 

The addition of section 1.25 and 1.26, annex 30 will cover all apprenticeships which have an agreed apprenticeship standard as published by the Institute for Apprenticeships and Technical Education (IFATE). This requires the apprenticeship to be in paid employment which includes at least six hours per week off-the-job training, paid holiday leave, hands on experience in the role and a formal assessment which leads to a nationally recognised qualification. If you are in any doubt, please contact your HR or apprenticeship team.

Where the pay rate in a devolved administration is higher than its equivalent in England, it is the pay point that is preserved not the actual amount of pay. 

As your previous employer was a non-annex 1 organisation but you were on dynamic terms and conditions that followed the NHS Terms and Conditions of Service handbook, you will be covered by this provision if you meet the other eligibility criteria. 

Bhavya is a band 7 specialist allied health professional wishing to undertake an apprenticeship to retrain in human resources (HR). On completion of this apprenticeship, Bhavya would qualify for a band 5 position within the HR profession. As Bhavya has decided to undertake the apprenticeship as a change of career, even though the pay is less than they currently earn, Bhavya’s pay will not be preserved and they will be paid according to local policy/arrangements for apprentices.  

Charlie is currently undertaking an apprenticeship and requires a formal break in learning due to sickness absence for elective surgery. Charlie has been receiving preserved pay during their apprenticeship. During their sickness, pay will be calculated in accordance with section 14 of the NHS TCS Handbook. On return from sickness absence, the provision of basic pay preservation will continue to apply. The period of absence will not prevent pay progression so long as other qualifying criteria are met. 

The pay preservation provision applies to situations where an existing employee accesses an apprenticeship which on completion will qualify them for a role at the same or a higher band than their current post.

Where the role taken up on completion is at the same band (sideways move) promotion is not applicable and the employee will continue in their band and the provisions of s1.18 will not apply.

Where the role taken up on completion of the apprenticeship is at a higher band, this will be a promotion and the employee will move to the entry point of that band and their pay step date will be reset.

In most cases this will produce an increase in earnings (basic pay plus any unsocial hours and/or recruitment and retention premium (RRP)).

However, there may be some cases where it does not. The apprenticeship pay preservation provision only applies to the basic pay of the role the employee was in before they started the apprenticeship. Unsocial hours and RRPs are not covered by it.

However, if the employee was earning ush payments or had an RRP in the apprentice role in the 13-week reference period prior to promotion, the pay on promotion provisions in section 1.18 might apply.

For example,

If the employee was on band 2 as an apprentice and then went into a band 3 role on completion with substantially the same pattern of ush this might otherwise result in a reduction in earnings. In such a case their salary would be maintained at the higher level until the pay rate in the new band does produce a higher salary.

Or  

If the apprentice role attracted an RRP but the role into which they are promoted at the end of the apprenticeship does not, their salary would be maintained at the higher level until the pay rate in the new band does produce a higher salary. 

The scenarios below aim to provide additional support and guidance for responding to situations which may arise when employees are promoted to a new pay band (aligning with the principles of Annex 23, England of the NHS terms and conditions handbook (NHS TCS) and may face a financial detriment). Please note that the scenarios are for illustrative purposes and therefore might not account for every situation.

To ensure staff do not face a financial detriment where their working pattern remains substantially the same in their new role, paragraphs 1.18 to 1.20 (Section 1, England) of the NHS TCS would apply (see below).

1.18 On promotion the new starting salary (made up of basic pay and any unsocial hours payment and/or any long-term recruitment and retention premium (RRP) should produce an increase in earnings. If it does not, the previous salary (basic pay plus any applicable unsocial hours payment and/or long-term RRP) will be maintained until the combination of basic pay, any unsocial hours payment and/or RRP in the new band does produce a higher salary.

1.19 In the case of unsocial hours payments the provisions in 1.18 will only apply if the unsocial hours working pattern in the new role remains substantially the same as in the previous role. Where this is not the case, the previous unsocial hours payment will not be taken into consideration when determining the new starting salary.  

1.20 The earnings calculations in 1.18 will be based on normal contractual hours excluding additional hours and will use unsocial hours payments averaged over the previous three months at work, or any other reference period agreed in partnership locally.

Meera is a band 2 clinical support worker in Accident and Emergency (A&E). She recently secured promotion to a senior clinical support worker role within the same department. Her shift pattern will remain largely unchanged on promotion, and she will continue to work a mixture of long days, twilight and night shifts.

Before promotion, Meera was at the top point of band 2. On promotion she will be placed on the entry point of band 3, aligning with the principles of Annex 23, England of the NHS TCS.

On promotion to band 3, the percentage rates applied to any unsocial hours worked will slightly reduce. The current rates can be found at table 2 in Section 2, England of the NHS TCS.

As a result of the slight reduction in unsocial hours rates on promotion to the band 3 role Meera’s take-home pay would reduce. To ensure staff affected by this do not face a financial detriment where their working pattern remains substantially the same in their new role, paragraphs 1.18 to 1.20 (Section 1, England) of the NHS TCS will apply (see above).

Using the principle outlined in paragraph 1.18, Meera will have her pay topped up until such time as her salary in her band 3 role (combination of base salary and unsocial hours) exceeds what she was previously earning in her band 2 role.

George is a band 5 Nurse in respiratory medicine and he recently secured promotion into a band 6 project nurse role. His shift pattern will change substantially on promotion, and he will no longer continue to work a mixture of long days, twilight and night shifts but will work standard hours Monday to Friday.

Before promotion, George was at the top point of band 5. On promotion he will be placed on the entry point of band 6, aligning with the principles of Annex 23, England of the NHS TCS.

The current rates can be found at table 2 in Section 2, England of the NHS TCS.

The provisions outlined in Section 1, England, paragraphs 1.18 to 1.20, apply where the unsocial hours in the new role remain substantially unchanged.

As George’s band 6 role will not require work to be undertaken in unsocial hours, this would be considered a substantial change to his working pattern and therefore the provisions outlined in Section 1, England would not apply.

Band 5 Nurse

When staff are promoted into a higher band, employers should take into account any prior periods of relevant service at that higher band, including temporary positions.   They should consider if the previous experience was relevant to the new substantive post and if so, the starting pay step date can take account of the relevant length of time of the previous experience. 

Depending on the time spent in the higher band previously, this will not necessarily lead to a higher starting salary, but would lead to reaching the first pay step date more quickly.

The approach taken would essentially be the same as example 1 as the principles of paragraphs 1.18 to 1.20 (Section 1, England) and the current rates can be found at table 2 in Section 2, England would be the same across different trusts.

HCAS payments are not protected under the principles of paragraphs 1.18 to 1.20 (Section 1, England). The HCAS allowance would need to be adjusted based on the contractual work location in line with Section 4: Pay in high cost areas and the rates outlined in Annex 8. However, local pay protection policies may apply.

To ensure employees do not face a financial detriment where their working pattern remains substantially the same in their new role, paragraphs 1.18 to 1.20 (Section 1, England) of the NHS TCS would apply. If the new starting salary does not produce an increase in earnings, then previous salary (basic pay plus any applicable unsocial hours payment and/or long-term RRP) will be maintained until the combination of basic pay, any unsocial hours payment and/or RRP in the new band does produce a higher salary. Please see webpage on Pay on Promotion scenarios and FAQ's. 

Your pay will be calculated on the basis of what you would have received had you been at work.

Yes.

No.

You will receive overtime pay at time plus one half or double time if it is work on a general public holiday.

The system is retrospective and payments will be made for each hour worked.  Every hour or part of an hour which you work after 8 pm and before 6 am will be paid at time plus the appropriate percentage.

No.  

• Cruse Bereavement Care
• Child Bereavement UK
• The Loss Foundation
• ACAS good practice guide to managing bereavement in the workplace
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1. Will this be nationally funded?

Yes (according to central estimates, which will be updated at the point that actual payments processed).

2. How will employers receive funding for this?

Funding arrangements will be confirmed by NHS England and NHS Improvement or DHSC, through usual financial reporting channels.

3. What payment will a member of staff receive?

Staff who meet the eligibility criteria in the framework agreement will receive a corrective payment of 16 per cent (the multiplier) of the total pay for overtime, and additional standard time, received in the financial year 2019-2020 (1 April 2019 to 31 March 2020) and/or 2020-2021 (1 April 2020 to 31 March 2021). These payments are non-pensionable and will be subject to employer deductions for tax and NI.

4. Why use a multiplier?

Data on the details of actual overtime and additional standard time worked may not have been retained or may be incomplete. However, records of the payments made for overtime, and additional standard time, are kept.

A percentage multiplier is the most pragmatic means of calculating a corrective payment based on the payments already made for the overtime and additional standard time worked.

5. Why is the multiplier set at 16 per cent?

The 16 per cent multiplier has been agreed to reflect a combination of the period of time that overtime was not included in annual leave pay calculations, the number of eligible staff, the overall estimated cost of the framework agreement and annual leave entitlement set out in the NHS terms and conditions handbook.

This multiplier is intended to appropriately compensate eligible staff. However, it is only being used for the purposes of the corrective payment and has no wider application.

6. What corrective payment will part time staff receive?

The same multiplier and eligibility criteria will apply to eligible part time staff for any payments received for work above their contracted hours. This could be additional standard time and/or overtime.

7. Will this payment be pensionable?

No. This payment is not pensionable.

8. Will payments be taxed?

Yes. These payments will be subject to tax deductions and national insurance deductions at source.

9. Will this payment affect state benefits received by staff?

State benefits which depend on national insurance contributions (NICs) may be affected by a corrective payment. Benefits which do not depend on NICs will not be affected. Members of staff in receipt of state benefits dependent on NICs should contact their benefit provider. More information on State benefits can be found on the Gov.UK website.

10. An NHS employer has a local agreement in place and has been making some payments already for non-guaranteed overtime on statutory annual leave. Will staff still get a payment?

These agreements are sometimes referred to as Bear Scotland payments, and include non-guaranteed overtime based on 20 days statutory annual leave.

NHS employers will take into account any previous payments of this type made to employees when calculating any corrective payments.

This framework agreement considers all overtime (voluntary and non-voluntary) and covers all contractual annual leave.

11. Does this override any local agreements to resolve historic issues related to the calculation of pay on annual leave and overtime payments outside the timescales set out above?

No. This framework agreement enables NHS employers to access national funding to correct overtime pay when employees are on annual leave with national trade union support.

Where different commitments have been made locally, before 1 April 2019, NHS employers will need to work with trade unions to decide how the commitment will be delivered.

12. What about the periods before 1 April 2019? Are members of staff entitled to corrective payments for these?

The NHS Staff Council has agreed that this corrective payment is the best way to resolve disputes on the treatment of overtime and additional standard time within annual leave pay.

No further corrective payments will be made.

What is included in the payment?

1. Will cost of living increases to pay be considered in the calculation of corrective payments?

Yes. Corrective payments are based on the actual overtime payments staff received in the financial years 2019-20 and 2020-21 so will already reflect cost of living increases.

2. Does the corrective payment take account of the extra hours worked during the pandemic?

Yes. The calculation of corrective payments will include all overtime and additional hours worked in the financial years 2019-2020 (1 April 2019 to 31 March 2020) and/or 2020-2021 (1 April 2020 to 31 March 2021) where the criteria in the framework agreement is met.

3. Will overtime pay received by part-time staff who have worked more than 37.5 hours in a week during the pandemic be included in their corrective payment?

Yes, providing they meet the eligibility criteria, all payments for overtime and additional standard time will be included in the calculation of the corrective period in line with this framework.

4. What forms of additional activity are included in this agreement?

The Electronic Staff Record (ESR) will work with NHS employers to provide guidance on the types of payment that should be included within the descriptions of overtime in payroll systems.

5. Are hours worked on a trust bank included in the Framework Agreement?

No. The calculations will be based on payment for overtime and additional standard time paid over the last two financial years (1 April 2019 to 31 March 2020 and/or 1 April 2020 to 31 March 2021) for work done under the substantive contract.

6. Is unsocial hours pay included in this framework agreement?

No. This framework agreement includes all pay for regularly worked overtime, which is time above the individuals’ contractual hours, including time above standard FTE (full-time equivalent) for the grade and additional standard time for part time staff.

7. What about TOIL?

Time off in lieu (TOIL) is taken instead of a payment for overtime. This means staff are able to take time away from work equivalent to the extra hours worked. However, where overtime is not taken off in lieu within three months, and is paid as overtime in line with section 3 of the NHS terms and conditions of service handbook, this will qualify as overtime.

8. An employer has historically made a WTR payment of 12.5 per cent to part-time staff for additional hours up to 37.5 hours per week. Should this payment be uplifted to 16 per cent?

 Yes, employers will need to calculate and apply an appropriate “top up” the 12.5 per cent for part-time staff to 16 per cent, so as not to indirectly discriminate against part time workers.

1. Why are NHS employers making corrective payments?

The NHS terms and conditions of service handbook states that when you take annual leave you should be paid as if you are at work. Following a recent Court of Appeal decision, NHS employers have agreed that the calculation of pay during annual leave should include regularly worked overtime.

2. Why is this happening now?

The NHS Staff Council has agreed a framework to help NHS employers make corrective payments to eligible employees for the period between 1 April 2019 and 31 March 2021.

3. Will the NHS Terms and Conditions of Service (AfC) Handbook need to change?

No. The NHS Terms and Conditions of Service (AfC) Handbook will not need to change. National discussions have taken place to clarify how NHS employers should interpret section 13.9 of the handbook. NHS employers and trade unions have agreed a framework for employers to assess both eligibility and the value of any corrective payments up to 31 March 2021.

4. What pay elements are covered by the framework agreement?

All pay for regularly worked overtime, which is time above the individual's contractual hours, including time above standard FTE (full-time equivalent) for the grade and additional standard time for part-time staff.

5. What counts as overtime?

Depending on local policy and practice, overtime, or additional standard time, is any paid time above your contractual hours, normally worked either as time after your normal finish time (for example a shift overrun where you had to continue working) or volunteering for additional shifts agreed in advance as overtime.

Working additional hours on an NHS bank does not qualify as overtime.

6. What is the corrective pay period?

The framework agreement provides for corrective payments covering the financial years 2019-2020 and 2020-2021 only. An eligible employee may receive a corrective payment for one or both of the financial years, as outlined below under the eligibility FAQ section.

7. Why have financial years been used?

The corrective payments cover pay for overtime during the two financial years of 2019-20 and 2020-21. This time period has been selected because:

• It enables corrective payments to be implemented quickly from a data and payroll processing perspective.
• It provides a corrective payment for the two-year period prior to make sure overtime is included in the calculation of holiday pay from 1 April 2021.

8. What information should individuals get from their NHS employer about the corrective payments?

Staff will be provided with personal information about how their corrective payment has been calculated. NHS employers will also provide information to staff about how questions on the calculations will be answered generally.

In the hopefully rare circumstances, where an employee does not believe that their overtime payments and any corrective payment has been correctly calculated, we would encourage conversations with line managers to address this issue in the first instance. NHS employers will agree an appeals process with trade unions under local partnership working arrangements to resolve any issues.

9. Are Scotland, Wales and Northern Ireland included in the agreement?

This agreement covers England only. An agreement has already been reached in Scotland. Employers in Cymru Wales and Northern Ireland have indicated they will enter discussions with trade unions to resolve this issue.

1. Who is eligible to receive a corrective payment?

To be eligible for a payment staff must:

• be employed by an NHS employer (as listed in Annex 1 of the handbook) on 31 March 2021; and
• have received payments in respect of overtime in a minimum of four months out of the 12 months in the financial year 2019-2020 (1 April 2019 to 31 March 2020) and/or 2020-2021 (1 April 2020 to 31 March 2021).

2. An NHS employer has been paying some individuals overtime during statutory annual leave. How will this affect the individual’s payment?

NHS employers will adjust any corrective payments to take account of pay during annual leave that has already been made for overtime. For example, in the ambulance sector, payments made for compulsory shift over-runs during statutory annual leave.
 

3. Why use an eligibility criteria?

Overtime and or additional standard time should have been worked with sufficient regularity for it to count towards holiday pay.

For the purposes of the corrective payments framework agreement  only, NHS employers and the trade unions have agreed that four months in each financial year is an appropriate threshold for establishing regularity of overtime.
 

4. How will staff know that they are eligible?

Staff will be informed by their NHS employer if they are eligible. Employers will be planning to pay the corrective payment before the end of September 2021, and staff should wait to be contacted.

5. Will part-time staff be entitled to a corrective payment?

Yes, eligible part time staff who have worked more than their contracted hours and have received additional pay, which has not been included in their annual leave will be entitled to a corrective payment.

They will be subject to the same eligibility criteria which applies to the pay for overtime above standard hours worked by full-time staff.

6. Will staff still be eligible for a corrective payment if they have worked irregular shift patterns?

Yes, if a member of staff meets the eligibility criteria, they will receive a corrective payment.

7. What happens if a member of staff left employment in the NHS before 31 March 2021?

The framework only applies to staff employed by an NHS employer (as listed in Annex 1 of the handbook) on 31 March 2021.

8. What happens if a member of staff has moved employers?

If staff are employed by an NHS employer on 31 March 2021 (as listed in Annex 1 of the handbook) they may remain eligible for a corrective payment.

Our previous advice was that ‘payments should be processed by the employer where the original work was undertaken and may mean that an individual receives a payment from multiple organisations’.

However, we now advise that payments should be processed by the new/current employer. This is because in practice it is not possible for the previous employer to pay the member of staff as pay roll records are normally closed when an employee leaves employment. The new/current employer will need to consider the full position across all employments covering the corrective pay period, and request for evidence to be supplied.

9. What happens if a member of staff has been TUPE transferred to a private company providing NHS services?

This framework agreement will only apply to eligible staff employed by an NHS employer as set out in Annex 1 of the handbook.

10. What if a member of staff has changed their [pay] banding over the last two years?

Changes to roles or pay bandings should not affect eligibility to receive a corrective payment. The calculations will be based on the value of payments made for either overtime or additional standard time worked and recorded on the Electronic Staff Record (NHS national payroll system).

11. A member of staff last worked overtime in March 2019 but not after. Will they be eligible for a corrective payment?

Only employees who have worked overtime or additional standard time in a minimum of four months out of the twelve months in the financial year 2019-2020 (1 April 2019 to 31 March 2020) and/or 2020-2021 (1 April 2020 to 31 March 2021) will be eligible to receive a corrective payment.

There may be some occasions where, for reasons of a protected characteristic, someone has not been able to meet the eligibility criteria (for example, maternity, or long-term disability related sick leave). Employers are urged actively to consider whether the criteria for eligibility should be adjusted in order to ensure that those with a protected characteristic impacted by such circumstances are not disadvantaged.

12. A member of staff has recently changed jobs and no longer does regular additional work. Will they be eligible for a corrective payment?

If an individual meets the eligibility criteria, they will be eligible for a corrective payment based on the overtime pay they received in one, or both, financial years 2019-2020 (1 April 2019 to 31 March 2020) and/or 2020-2021 (1 April 2020 to 31 March 2021).

13. What happens if a member of staff leaves employment after 31st March 2021, but before payments or offers are made?

If a member of staff was eligible to receive a corrective payment and was in employment on 31st March 2021, they will still be eligible for a payment. Employers should make arrangements to process payments in these circumstances.

14. A member of staff retired from the NHS before 31 March 2021. Will they be eligible for a corrective payment?

The framework agreement applies to staff employed by an NHS employer (as set out in Annex 1 of the handbook) on 31 March 2021. Any individual who has left NHS employment is not eligible for a corrective payment.

15. A member of staff retired and returned before 31 March 2021 are they eligible for a corrective payment?

The framework agreement applies to staff employed by an NHS employer (as set out in Annex 1 of the handbook) as of 31 March 2021. Any individual who is employed on this date and meets the eligibility criteria will be eligible for a corrective payment.

16. What do members of staff do if they believe they are eligible, but their NHS employer says they are not?

In the hopefully rare circumstances, where an employee does not believe that their overtime payments and any corrective payment has been correctly calculated, we would encourage conversations between staff and their line managers to address this issue in the first instance. Staff will need to provide evidence, for example, their payslips, payments that they have received for either overtime, or additional standard time. This information is important to help employers determine if staff are eligible.

There may be some occasions where, for reasons of a protected characteristic, someone has not been able to meet the eligibility criteria (for example, maternity, or long-term disability related sick leave). Employers are urged actively to consider whether the criteria for eligibility should be adjusted in order to ensure that those with a protected characteristic impacted by such circumstances are not disadvantaged.

1. What do NHS employers need to do to prepare?

The national payroll system, the Electronic Staff Record (ESR) will publish information taken from the national payroll system which will help employers identify which staff will be eligible for a corrective payment and how much each member of staff will receive.

2. How will employers know if staff have worked overtime?

Most NHS employers use the Electronic Staff Record (ESR) HR and payroll system to manage payments to staff. ESR uses a system of pay elements to categorise payments into different groups reflecting payments for different types of work – for example to differentiate between basic pay, shift work or overtime. These pay elements, which are shown on staff’s pay slip, will be used as the basis to determine if they have completed additional activity.

3. Will eligible staff need to make an application to get this payment?

No. Payroll and HR departments will notify staff of their entitlement and how and when their corrective payment will be made. Staff will receive personal information about how their individual corrective payment has been calculated.

4. When will the payment be made?

NHS employers are committed to using all reasonable endeavours to make corrective payments to all eligible staff by 30 September 2021.

5. Who will calculate the payment?

Payroll departments will calculate the payment and notify staff of the amount and date of payment.

1. A member of staff has a (stayed) legal claim – what will happen to that?

NHS employers and trade unions have agreed to work collectively (both nationally and locally) to resolve outstanding legal claims.

The existing legal claims lodged in the Employment Tribunal or the County or High Court, will be resolved through local settlement discussions between the relevant NHS employer and the claimant along with their legal advisor (COT3 settlement process).

In 2009 the European Court of Justice (ECJ) held that workers on sick leave continue to accrue annual leave and that if workers are not given the opportunity to take annual leave during this time, they should be permitted to carry it over to the next leave year. When the case was remitted to the House of Lords it was confirmed that holiday could be taken whilst a worker is on sick leave.

The ECJ found that the European Working Time Directive (EWTD) requires that where a worker is unable to take pre-arranged statutory annual leave in the relevant leave year due to sickness absence before the leave commences, the worker should have the option to designate a different period for the annual leave even if this requires carry over.

The ECJ confirmed that where a worker becomes sick during statutory annual leave (as opposed to before statutory annual leave as was the case in Pereda), the worker should be entitled to take the annual leave at a later date, even if this requires carry over.

The Court of Appeal (CA) made a decision on the issue of whether workers need to request to take leave before the entitlement to leave/payment arises. The CA decided that such a request is not required under the Working Time Regulations (WTR) where the worker is unable (or unwilling) to take annual leave because of sickness (see Q&A below).

On a separate issue, the ECJ has also given its decision in the case of KHS AG v Schulte C. The case looked at the question of whether there is a limit to the length of time an employee on long term sick leave can continue to carry forward untaken annual leave. The ECJ held that the EWTD does not require unlimited carry over and that a backstop of 15 months was permissible. However, this case was about a German collective agreement so it is not clear whether it will be followed here.

Most recently of all the Employment Appeals Tribunal (EAT) has held that the amount of annual leave which may be carried over to a new leave year is four weeks (the entitlement under the EWTD). The EAT confirmed that, in the absence of a "relevant agreement" under reg.13A (7) of the WTR, the additional 1.6 weeks' annual leave under regulation 13A of the WTR does not carry over. In effect this means that a full time worker can only carry over 20 days not 28 days.

The government is currently reviewing the WTR so we anticipate there will be future changes in any event. We will update employers as soon as more details are known.

The Department of Business, Innovations and Skills (BIS) has published guidance on the relationship between sick leave and paid statutory annual leave which broadly reflects the outcome of the cases outlined above.

The case provided some clarity in this area and later cases, particularly Larner and Healy have clarified some unanswered questions. In a nutshell the Stringer case says that workers can accrue and take statutory annual leave under the WTR during sick leave. Workers who are denied holiday pay can bring a claim under the WTR or as an unauthorised deduction from wages claim, which has a more generous time limit.

Yes, if a worker on sick leave has not had the opportunity to take their minimum holiday entitlement (provided for by the WTR) in the current leave year, they are able to carry forward into the next leave year any untaken amount of this 20-day entitlement.

The Healy case confirmed that the amount of leave that should be carried forward to a new leave year is limited to 20 days (for a full time worker) under regulation 13 rather than 28 days under regulations 13 and 13A of the WTR.

Only if an individual has been unable to take their holiday entitlement because of sickness absence.

The Stringer case was specifically concerned with workers who had been absent for an entire holiday year. Employers should therefore allow workers in such circumstances to carry forward into the new leave year 20 days statutory annual leave entitlement.

However, if an individual is able to take their outstanding annual leave on their return to work before the holiday year expires, they should do so. If they choose not to this holiday will be lost and cannot be carried over. (We are advised that this is still the case, despite the recent decision in Larner.) If, however, there is insufficient time left in the leave year to enable them to take their accrued annual leave, they should be allowed to carry this leave forward into the new leave year.

If, but only if, a worker’s employment ends before having had the opportunity to take their annual leave entitlement due to sickness, the worker is entitled to a payment in lieu at the normal rate of pay (see also 6 and 8 below).

If the worker is sick for the complete leave year or where they return to work but there is insufficient time left in the leave year to enable them to take their accrued leave:

• they must be allowed to take it at another time, if necessary by carry over into the next leave year; and
• payment in lieu of accrued but untaken leave on termination must include payment for untaken leave which has been carried over (see question 6 below);
• this applies regardless of whether the worker made a request for leave (or to carry over untaken leave).

If the worker had the opportunity to take their holiday after recovery, we remain of the view that the worker should request and take holiday before the expiry of the leave year. If they choose not to do so, this holiday will be lost and cannot be carried over or compensated for on termination.

The ECJ Schulte case suggests there is a backstop of 15 months in which to take the carried over holiday. So, all holiday not taken within 15 months of the end of the relevant leave year could be lost. This case may be applicable in the UK but until it has been considered by the UK courts we will not have certainty.

The Government is currently consulting on this issue and so amendments may be made to the WTR to deal with this point.

If a worker wishes to take WTR annual leave whilst on sick leave or as part of a phased return, employers should allow them to do so. Indeed, some employers may wish to encourage workers to take leave as if workers take a notional period of paid annual leave before the expiry of the current leave year there will be no issue in relation to carry over. However, we recognise some employers will prefer not to take this approach. What now appears to be clear, following the Pereda and ANGED decisions, is that employers cannot insist that a worker takes annual leave whilst they are on sick leave, if they do not wish to do so. This was also confirmed in Larner.

The workers in the Stringer case were claiming pay in lieu of holiday accrued in the holiday leave year during which their employment was terminated. The implication from the decision, however, is that there is a risk workers may be able to take all holiday accrued, or be paid on termination for holiday accrued going back a number of years. The worker could claim accrued holiday pay under UK law for at least the last six years.

However, a number of matters may limit a worker’s ability to make an employment tribunal claim relating to that leave. For example, the 15 month backstop in Schulte (see question 6 above). It is certainly open to NHS organisations (as public sector organisations to whom the EWTD is directly applicable) to argue that the carry over of annual leave should be limited to a 15 month period with the understanding that this may well be challenged by the worker as we do not have a UK decision on this point.

Also, the worker may be out of time to make such a claim. Larner made it clear that NHS workers can make a claim under the EWTD. That could mean NHS workers are able to back date their claims more than 6 years, possibly going back to 1998 when the WTR were introduced in the UK. However, we are advised that such a claim is unlikely to succeed for various reasons. A claim under the EWTD is more complex, employers may wish to take specific legal advice if faced with such a claim.

For each full annual leave year from 1 April 2009 onwards, workers will accrue 5.6 weeks of annual leave. The decisions referred to throughout this guidance only relate to WTR annual leave, not the contractual annual leave provided for under the national agreements.

However, following the Healy case, in the absence of a relevant agreement whereby the additional 1.6 weeks shall carry over, accrued holiday for previous leave years may be limited to 20 days (including public holidays) under regulation 13 of the WTR.

We recommend that annual leave and sick leave policies make clear that only statutory holiday accrues during periods of sickness absence.

Yes, the decisions in Pereda and ANGED made it clear that a worker who becomes "unfit for work" before or during a pre-arranged statutory holiday has the right to reschedule the affected holiday for a later date. Moreover, if there is insufficient time left in the leave year to enable them to take this leave, they should be allowed to carry this leave forward into the new leave year

No, the worker can only reschedule the period of planned leave which coincides with the unfitness for work. 

Yes, we consider that an employer is entitled to ask for medical evidence of unfitness for work (over and above self-certification) if sickness occurs during a holiday. As it is an unusual situation, employers should make clear this applies regardless of how long the sickness lasts. We consider employers can also require workers to report sickness to their manager on the first day they become unfit for work.

Given the various cases, we think it would be wise to look at annual leave policies on the subject of sickness during annual leave, carry over leave and taking leave where a worker has been absent for part of a leave year. There are no proposed amendments to national terms and conditions. To minimise the risk of any challenge, employers need to be able to show that they have taken a reasonable and consistent approach to the various issues around sickness and annual leave set out in this note.

Legally, the case law will probably be taken as stating the law as it has always been since the WTR were introduced in 1998.

15. You refer to 'workers' throughout. Why?

The WTR apply to workers which is a wider definition than that for employees, for example it covers bank staff.

We recognise that ambulance staff take breaks at varying times during a shift, or, sometimes due to operational pressure crews are unable to take a meal break during a shift. Unpaid meal breaks are not included in the calculation of unsocial hours, but agreements relating to paid meal breaks are.

In line with the section 2 system, for staff on existing Agenda for Change pay spine points 1 to 8, unsocial hours payments are included in pay during both sickness absence and annual leave. The framework agreement proposes that new entrants to the NHS, appointed from 1 July 2018 onwards, will not have access to payment of unsocial hours during sickness absences. The eligibility for payment of unsocial hours payments during sickness absence for existing staff on points 1 to 8 will be phased out. For all other staff there is no eligibility for unsocial hours payments to continue during sickness absence, after outstanding payments have been made, unless the employer determines that the reason for the absence is caused by a work related injury or disease contracted in the actual discharge of their duties.

Under the section 2 system of unsocial hours payments, these payments are included in pay during annual leave. Agenda for Change is clear that you should receive what you would have been paid if you had been at work. This is based on an average over an agreed reference period.

Yes. There will be no changes to occupational sickness absence payments for existing staff who remain on annex 5.

If you are on a course that started before 1 September 2018 then you will retain the choice to stay on annex 5/E or move to section 2 at the end of your course, even if this is spread out over a couple of years. An example of this is an internal technician to paramedic conversion course. This is based on the principle that when you started your training you would not have known about the changes to unsocial hours calculations.

No. There is a single harmonised rate of time-and–a-half for all overtime, with the exception of work on general public holidays, which will be paid at double time.

The current system will stay in place, meaning NQPs will start at the bottom of band 5 and move to bottom of band 6 after a maximum of 24 months. Anyone currently in an NQP role before the 1 September 2018 will retain their ability to decide on the move to section 2 on completion of the NQP programme.

No. Staff are able to chose to move to section 2. Sometimes people need to move to flexible working as a way to balance work life and personal or family commitments. If you are applying for a move to flexible working you will retain your choice to move to Section 2.

Agenda for Change, section 14 and section 22 describe how employers should establish whether an absence is wholly or mainly attributable to your work. Guidance for staff and employers on injury allowance are available for Section 22.

If you are on long term sickness when the changes come into force you will remain on annex 5/E. Once you return to work you will be given the choice to make the change to section 2 or remain on Annex 5/E.

LRRP is based on market factors and should be reviewed regularly. Once the new pay structures are in place it may be advisable to review LRRPs to ensure they are consistent with annex 10.

No. Ambulance services are constantly changing to ensure the levels of operational cover match demand. Changes of roster and bases which are as a result of these changes do not constitute a voluntary change of contract so you would not move to section 2 unless you exercised your individual choice.

You would return under your current terms and conditions and would then be able to choose whether you remain on Annex 5/E or move to section 2 based on your working pattern following maternity leave.

A reasonable adjustment helps and employer to retain employment of staff who have developed a disability. For that reason it will not automatically mean a move to section 2.

Whether a role constitutes a suitable alternative offer of employment will depend on the circumstances involved. A restructure is not a voluntary change of role therefore the person would retain their choice.

No, a secondment is temporary working arrangement and does not constitute a change of contract or change of role.

Career breaks have the effect of pausing the contract of employment for an agreed period of time. Providing the contract is restarted within the agreed timeframe you will return on your existing terms as at the point of the career break.

The effect of TUPE will be to transfer the staff with their terms and conditions of service at the point of the transfer. If staff are on annex 5/E then they will remain on this through the transfer.

The move to section 2 would mean the way your unsocial hours are calculated would change and you would not receive your unsocial hours when you are off work sick, unless your sickness absence is work related. It should not mean changes to other related terms and conditions such as overtime, standby and payment for shift overruns.

Through restructuring of the bands the capped point will be removed and you will progress through the band. The individual pay journeys described in the NHS Staff Council document set out how your pay will change over the next three years. Depending on your incremental date and the pay point you are currently on, you will be able to follow your journey through the restructuring of the pay bands.

What are the contractual rights to flexible working?

Effective from 13 September 2021, and updated in April 2024, changes to the NHS Terms and Conditions Handbook have been agreed which form part of your employment contract and mean that: 

• all employees have the right to request flexible working from day one of employment
• there is no limit on the number of requests you can make
• you have the right to make requests and have them considered regardless of the reason
• Your employer should keep a central overview of how requests in the organisation are being handled so they can check everyone is being treated fairly
• Your employer should explore all options including possible alternatives within the organisation and consult with you before rejecting a request.

These contractual rights are inline with or exceed the statutory requirements for considering a flexible working request. 

If you and your line manager cannot find a solution, there is a further stage to check for other suitable options that could be considered (perhaps in another team or setting). This is so that you and your line manager are supported to explore all other options. 

Employers should provide regular information to staff about flexible working opportunities and encourage regular discussions between managers and staff about flexible working without waiting for staff to make a formal request. This should be done during one-to-one discussions and conversations with teams.

If I am already working flexibly, can I put in another request?  

Yes, in accordance with the NHS Terms and Conditions of Service Handbook, employees covered by these provisions can make more than two flexible working request per year and can do so regardless of the reason. It may be that you need to request a temporary change to your working arrangements which can be discussed informally with your manager. However, if your new flexible working request is for a more formal and permanent change, it will be considered by your manager in accordance with local policy.

In cases where it is not possible to accommodate your request within the immediate team, a further process will be followed if you wish to explore further options within the organisation.

Do day one rights apply to me if I am in a probationary period?  

Yes. The contractual and statutory right to request flexible working is from day one of employment.  It applies to all NHS staff whose terms and conditions of service are covered by the NHS Terms and Conditions of Service Handbook.    

Is flexible working open to staff not covered by the NHS terms and conditions?  

In legislation, all employees have a right to request flexible working from day one and can make up to two flexible working requests a year. 

If you are employed by a private contractor and work on NHS premises, you will need to check your employer’s flexible working provisions.  

The ambitions in the people plan highlight the desire to make flexible working available to all, regardless of role, grade or organisation, and organisations should look to support working flexibility for all staff.

I put in a request to work flexibly earlier this year, which was denied, can I put in another one? 

Yes, if your terms and conditions of service are covered by the NHS Terms and Conditions of Service Handbook, you can make more than two flexible working request in a year. Your needs and the needs of the service can change over time, and you have a right to make a formal flexible working request for any reason.  Following full exploration of your request, if it is not possible to accommodate your request within your immediate team an escalation process will be followed if you wish to explore any further options that may be possible within the organisation.

I don’t see the point in asking my manager as I feel that they will say no, what should I do?

All NHS staff have a right to ask for flexible working, and for formal request for flexible working to be properly considered including rights of appeal. You should also have the chance to discuss your work/life balance through your health and wellbeing conversations.

We encourage you to think about the work life balance that you would like to achieve and the potential flexible working arrangements that could help you do this. It’s also worth thinking about what some of the benefits might be to your team and wider organisation of your proposed pattern. By preparing for some of the questions your line manager may ask you, it will help you to have a better conversation. If you are nervous or uncomfortable about submitting a formal request to your manager, you should consider asking to first discuss possibilities and options informally with your manager and/or seeking support from a trade union representative or work colleague. It is worth noting that your manager has to consider your request properly and, if they are not able to agree to the arrangements you request, there is a further escalation stage in place to check for other suitable options.

It may be that in your current work context, your manager might not be able to agree your request but there are alternatives available to explore. For example, there may be other teams within your organisation that would consider and agree your request. New arrangements mean that managers should be open to considering this.

Should I talk informally to my manager to request flexible working or go straight to a formal request?

We encourage staff to talk informally with their line managers initially. Having conversations as a line manager within your teams are also valuable to help find solutions and accommodate team needs. Significant changes (for instance those with contractual impacts, e.g. moving to annualise hours or going part time) are expected to go through the proper formal process to ensure all the details are agreed and captured.

How do I apply to work flexibly, and does it have to be in writing?

The NHS Staff Council has created a flexible working request flowchart which details the steps line managers and staff in the NHS should take when making a request for a flexible working arrangement. It is also important to look at your organisation’s local policy on flexible working, which should set out a process on how to make flexible working requests. If you are not sure or have any questions, speak to your local HR team or trade union representative to seek advice and guidance.

How long does my flexible working request take to be decided? 

The legislation allows a two-month timescale from a formal request being received to the end of process including appeal, unless an extension is mutually agreed by the employee and their line manager.

What is the deadline for managers to respond to a flexible working request?

This depends on local policies. Make sure you are familiar with the local policies, managers should advise on this and explain next steps.

Does my line manager need to meet with me to discuss my flexible working request?

Unless your employer decides to agree to your request in full, there is a statutory requirement to consult with you before making a decision. The contractual provisions include an exploratory meeting with your manager and, if a solution isn’t reached at this stage, an escalation stage where your line manager can get support to consider alternatives and discuss these with you in further meetings as required. When meeting with your manager you should be able to discuss the request, have any relevant information considered including if the request relates to a reasonable adjustment for a disability. The flexible working request flowchart  details the steps line managers and staff in the NHS should take when making a request for a flexible working arrangement. 

Consultation with you should be conducted in a fair and respectful manner, allowing you to express your needs and concerns. Your employer should actively listen to your views and consider possible options that could meet both your needs and the needs of the service.

If it is not possible for my request to be accepted in my current role, what are my options?

If your request cannot initially be agreed in your current role, ask your manager if there are other opportunities in the organisation where your request might be agreed.

You might also consider if there are any other alternative patterns that will enable you to achieve flexible working, or whether there are parts of your request that could be agreed. Speak to your manager to consider areas you would be interested to work in on a flexible basis.

If after the escalation phase (where your manager refers your request for wider consideration within the organisation and ensures a consultation meeting has been held), your request gets declined, written reasons must be provided and you can consider whether you would like to make an appeal.

My flexible working request has been denied, what can I do?

Before turning down a request, you and your manager should have had a consultation meeting and explored the escalation stage. Your manager should keep you updated on your request and discuss your potential options and opportunities elsewhere.

If your manager has not initially been able to agree your request, your employer should communicate this to you and discuss other alternatives including any opportunities for you to work flexibly elsewhere in your organisation.

If the escalation phase has not led to a solution and your request is declined, you can consider whether you would like to make an appeal.

I have a disability and need flexible working as a reasonable adjustment, what’s the best way to ask for this?

Flexible working can be a reasonable adjustment under the Equality Act 2010, so it is a good idea to make sure your employer is aware that this is the reason you are making a request as it is an additional statutory right on top of the contractual right set out in the NHS Terms and Conditions of Service (TCS) Handbook. Your organisation’s flexible working policy should encourage you to identify if your request is to facilitate a reasonable adjustment (para 33.13 of the TCS). Follow your local organisation’s procedure for flexible working applications. The application will normally include a question such as ‘Are you making your request as a reasonable adjustment for a disability?’ It will also normally involve setting out:

• some background to your request
• your current work pattern and your ideas for how your proposed work pattern could be accommodated.

I am coming back from maternity leave and would like to work flexibly – what should I do?

Section 15 of the NHS Terms and Conditions Handbook covers flexible working on return from maternity leave:

15.79 If, at the end of maternity, adoption, or shared parental leave, the employee wishes to return to work on different hours, the NHS employer has a duty to facilitate this, wherever possible.

15.80 If it is agreed that the employee will return to work on a flexible basis, including changed or reduced hours, for an agreed temporary period, this will not affect the employee’s right to return to their job under their original contract, at the end of the agreed period.

If you want to start working flexibly on your return to work from maternity leave, it is worth thinking about the time frames set out in your local policy. It is advisable to submit your request three or four months before you want the new arrangements to come into effect, particularly if you need to dovetail in with other arrangements such as childcare.

How do the new policies and request forms support those with disabilities?

The new NHS Terms and Conditions of Service Handbook provisions promote flexible working as key to improved health and wellbeing through achieving a more positive work/life balance. There is a section on encouraging flexible working, including through promoting the right to request, including through job adverts, encouraging open conversations about flexible working at one-to-ones, wellbeing conversations, appraisals etc.

As part of the development of your local flexible working policy an equality assessment should have looked to see if any groups of staff (including disabled staff) may be (even inadvertently) excluded. Policies will then be designed to be inclusive and supportive of disabled staff right from their development. The policy will then be monitored and reviewed considering protected characteristics including disability.

The request form should be accessible for all staff to use, and it should make provision for staff to identify that they consider their request is a reasonable adjustment in respect of a disability. It may even cross reference and link to other relevant policies such as the disability policy.

Can I request to work from home as a form of flexible working? 

Yes, homeworking can be a form of flexible working. See Section 35: home and agile/hybrid working of the NHS TCS Handbook and supporting guidance further information. Before making a formal request to work flexibly from home, you may want to consider initially having an informal conversation with your manager about this.

If you already have an informal agreement, you may want to discuss with your employer whether you could do this on a more regular or permanent basis. 

You and your manager may want to discuss your working from home on a full-time basis or a hybrid basis - for example for a number of days a week, or on an ad hoc basis.

If it is agreed for you to work from home, you may need to complete a work-station assessment, check your local policy for more information. 

It is the individual’s responsibility to notify the employer / organisation of any changes to their home office environment or personal health that may affect their health and safety. You may also like to consider the advantages and disadvantages to a more permanent arrangement in terms of the equipment you will need, and the financial implications, for example a reduction in commuting costs, but an increase in heat or lighting costs. You will need to be clear about the requirement to come into the office and other places of work for regular meetings etc.

Could working flexibly affect my pay and annual leave?

Basic pay and annual leave entitlements are based on whether or not an individual works ‘full time’ for instance 37.5 hours a week. Take a look at the contractual implications of your new working pattern once your request has been processed. 

If you are working less than 37.5 hours, your basic pay, annual leave and public holiday entitlement will be reduced proportionately. Your overall pay may change if your new flexible working pattern changes the number of unsocial hours you are undertaking. In addition, if your contractual hours are fewer than 37.5 hours, any overtime you work is paid at plain time up to 37.5 hours. Any overtime hours worked by full-time employees will be paid at the relevant premium rate as detailed in the NHS Terms and Conditions of Service Handbook.

You can seek further help and advice from your trade union rep and/or HR team.

If I work flexibly, could it impact my learning and development opportunities?

This should not be the case. As an employee, you will still have access to learning and development (L&D) opportunities. If you are working flexibly or less than 37.5 hours and an L&D opportunity occurs on a day/time that you do not work, there should be a discussion with you as to how this can be accommodated. This should be the same for stretch and promotion opportunities.

Part-time working (PTW) refers to individuals who work less than full-time hours and can take many forms for instance: reduced hours or reduced days per week, including job shares and term-time only working.

Key considerations

A PTW has protection against less favourable treatment, as compared to full-time workers employed under the same type of contract on a pro-rata basis and should not receive less than the proportion of that pay or other benefit when comparing their hours to those of a full-time worker.

In looking at part-time working generally and its use within organisations, employers should note that it has been reported that there is a part-time penalty, generally in workforces, with PTWs being much slower to progress within organisations to senior positions than full-time colleagues. This is something for organisations to be mindful of when they consider progression within their organisation and whether opportunities are open for all employees.

As the majority of PTWs in the UK are women, a female PTW who is treated less favourably than a full-time worker by her employer may be able to bring a claim for indirect sex discrimination under the Equality Act 2010.

Holiday entitlement calculations

PTWs will receive the same holiday entitlements on a pro-rata basis as full-time colleagues and will get the pro-rata entitlement ensuring the statutory minimum of 5.6 weeks per year as set out in the Working Time Regulations is met.

Public holiday entitlements

The NHS Terms and Conditions set out that a part-time employee is entitled to paid public holidays no less than pro-rata to the number of public holidays for a full-time employee, rounded up to the nearest half day. See paragraph 15.6, section 13, England. This entitlement should be added to their annual leave entitlement, and they should take public holidays that they would normally work as annual leave.

Employers may need to recalculate the annual leave entitlement for a part-time employee each year if there are additional or amended public holidays.

Part-time contracts, overtime and holiday pay 

The handbook sets out that where part-time staff work additional hours, but their total hours do not exceed 37.5, this is treated as 'additional (standard) hours' and paid at plain time. Where regular additional hours are worked this must be factored into holiday pay calculations. 

Where someone on a part-time contract regularly works additional hours, employers may want to consider offering staff an amendment to their contract to incorporate these. 

Part year and term-time only (TTO) working can take several forms for instance: working only during set periods e.g. school term times; working during term times and half terms but not during Easter, Christmas, and summer school holidays; working for an agreed proportion of all the school holidays in addition to term time or any other pattern where an employee is employed for the whole year but only works some weeks and not others.

Key considerations

Part year/TTO contracts are a common form of flexible working and where these are requested employers will need to work through issues including:

• whether all paid annual leave entitlement is required to be taken in set periods e.g. school holidays
• the precise number of working weeks the contract will cover
• if dates for working weeks will need to be adjusted from year to year e.g. in line with the school calendar
• designating which days are being taken as annual leave. This is important as it is relevant for leave entitlement/accrual during periods of sick leave, maternity/adoption leave etc. The easiest way to do this is by spreading leave proportionately across non-working days. Alternatively set days can be allocated in discussion with the employee
• any exceptional circumstances where the employee may be required to work during holiday periods (if applicable).

Holiday entitlement calculations

Calculation of holiday entitlement is an area requiring particular attention in the light of recent legal developments (see Appendix A).

For holiday years beginning on or after 1 April 2024 employees who have part year/TTO contracts which cover periods when they are not working, should receive an appropriate proportion of the paid leave entitlement for an employee working all year round – this includes all annual leave and public holidays. For holiday years that began before April 2024, employees are entitled to the statutory minimum of 5.6 weeks’ holiday per year as set out in the Working Time Regulations or the pro-rata contractual entitlement, whichever is the greater.

Calculations of holiday entitlement must meet equal pay considerations and must also comply with regulations covering PTWs and working time. Part year/TTO workers should receive no less favourable terms regarding holiday entitlement than full-time employees.

Appendix A outlines a method and a number of worked examples for calculating pay and annual leave. These are based on guidance from the National Joint Council for Local Government Services national agreement on pay and conditions (Green Book) - whilst there may be other calculation methods, the NHS Staff Council believes these examples reflect a fair and equitable approach when calculating pay.

Hours-based holiday entitlement calculations

In some cases, it will be appropriate to use an hours-based calculation when calculating annual leave entitlement for a part year/TTO employee and the rate that should be paid. This will be more appropriate where an employee works an unequal number of hours in a week or an unequal number of hours on each working day (see appendix for a worked example).

Pay and overtime considerations

Pay for part year/TTO employees is usually calculated annually pro-rata. It is based on the number of hours the employee is contracted to work each week, the weeks worked over the year, and usually including the proportional annual leave and bank holiday entitlement averaged over the whole year and paid in 12 equal monthly payments.

Where a part year/term-time employee works more than the standard 37.5 hours in a working week, they are entitled to overtime payments in line with section 3 of the Terms and Conditions of Service Handbook and any local enhancements. Where regular additional hours are worked – either as overtime (above 37.5 hours) or as additional standard time (above contractual hours but less than 37.5) – this should be factored into holiday pay calculations. For those working variable rotas, hours worked above 37.5 hours may be calculated over a set period, for example a four week roster.

Job sharing is when two or more PTWs share the duties of a single job. The job sharers work at different times, although there may be periods of overlap to pass on work-related information. The terms and conditions for staff who are undertaking a job share will mirror those put in place for other PTWs (and should therefore incorporate the pro rata principle) however there are some additional points to consider.

Key considerations

Other details that should be covered in contracts of employment for job-share partners include:

• regular reviews of the job share arrangements 
• how frequently job-share partners need to communicate and how they deal with the handover of work to ensure an effective partnership
• how appraisals will be managed and whether the partners will input into each other’s appraisal
• liaising with each other about annual leave to ensure that, where required, cover is provided throughout the year 
• what happens in the event that one of them leaves the organisation
• what happens in organisational change scenarios.

Whilst job-share partners may input into each other’s appraisals, pay-step reviews will need to be conducted for each individual using the pay progression standards in Annex 23 para 19.

Holiday/pay considerations

The usual pro-rata principles for part-time employees should be applied subject to the principle that all workers are entitled to a minimum of 5.6 weeks annual leave under the Working Time Regulations.

An annualised hours contract may be appropriate where an employer and employee agree that the employee will work a total number of hours over the course of the year but their actual hours from week to week will vary. Many industries make use of annualised hours contracts where there is fluctuating demand for staff throughout the year, but annualised hours may also be requested by those with childcare responsibilities or other reasons to enable more hours to be worked during term time and fewer during the school holidays.

Key considerations

With contracts where hours are averaged over a set period – for example annualised, bi-annualised or quarterly – some hours may be fixed in a set schedule while some hours might be held ‘in reserve’.

Where the rostered/reserve model is used, employers will need to carefully ensure that contracted hours are not exceeded but also that the employee has the opportunity to work their reserve hours.

Hours worked should be regularly discussed and monitored in one-to-one meetings over the course of the averaging period to ensure the employee is on track to fulfil the required number of hours by the end of the period. Where it is identified that the employee risks being in deficit at the end of the period they should be given the opportunity to make up their hours. Where this is not possible options should be discussed. These could include carrying over a deficit into the next averaging period with an agreement on when these additional hours will be worked, or taking the deficit hours as unpaid leave

If by the end of the averaging period used – for example at the end of the year, half-year or quarter – contracted hours have been exceeded, these should be paid for as overtime where hours, when averaged, have exceeded 37.5 hours a week – or as additional standard time in line with section 3 of the Terms and Conditions of Service (TCS) Handbook.

Where unsocial hours are worked as part of an annualised pattern, payments can be applied prospectively in respect of rostered periods but may need to be applied retrospectively for reserve hours, as per:

• section 2: Maintaining round the clock services (England), and
• annex 5: Provisions for unsocial hours payments for ambulance staff’ in the TCS handbook.

Formula for calculating holiday entitlement, and pay schedule

The contract usually sets out the number of hours the employee is required to work as a figure for the full year (this could be based on full-time hours or part-time hours). Annual leave is then also usually expressed in hours and is deducted from the first figure to leave a final number of hours to be worked throughout the year. Holiday can be scheduled at the start of the leave year or more flexibility may be incorporated into the arrangements. 

The salary for annualised hours workers is usually paid in equal instalments throughout the year regardless of the hours worked in a particular month. 

The sections above have outlined more common types of flexible working however there may be other non-standard patterns that may be put forward for consideration and it is important that new ideas are given fair and reasonable consideration.

Key considerations

Employers may receive requests from staff to change their working hours or days to a pattern which includes working in the evening or a weekend day – for example a request to work 1pm-9pm or Tuesday to Saturday with Mondays off.

Unsocial hours premiums are defined in section 2.1 of the TCS handbook as payable “where staff are required to work to cover services in the evening, at night, over weekends and on general public holidays.”

If the flexible working request leads to an employee working during hours that attract unsocial hours premiums – and the work is of a type that the organisation requires to be done during those hours – the employee will be entitled to receive unsocial hours premiums in their pay. This could for example arise where the employee moves to a different role/setting following the escalation stage set out in section 33 of the TCS handbook.

However, if there is no requirement for the employee’s work to be done during a period attracting unsocial hours period – and it is simply the employee’s choice to work during those hours – the employer should ensure that this is explored as part of the conversation around their request and captured in written confirmation so that they are clear why unsocial hours premium pay is not applicable. HR and trade union advice should be sought if there is ambiguity.

Holiday entitlement/pay considerations

Dependent on the nature of the request, the usual pro-rata principles for part-time employees should be applied subject to the principle that all workers are entitled to a minimum of 5.6 weeks annual leave under the Working Time Regulations.

TTO pay and holiday entitlement calculations 

The formula below seeks to ensure that the payment system for TTO employees is fair and secure on equal-pay grounds in comparison with all-year-round employees in the same organisation. The ratio of annual leave entitlement accrued per working day therefore needs to be the same for both groups.

NB the calculations and worked examples below refer to TTO working but can be applied to any part year working arrangement.

The example below is based on employee working a full-time pattern (37.5-hour) with 5-10 years’ service.

Year-round employee

The number of days available annually is 260.71 (365 ÷ 7 x 5). The annual leave comprises:

Basic annual leave       29 days

Public holidays              8 days

Total leave                     37 days

Year-round employees with this leave entitlement work 223.71 days a year (260.71 minus 37) in order to produce a paid leave entitlement of 37 days.

Each working day therefore accrues 0.1654 days of paid annual leave (37 divided by 223.71).

Term-time employee

The TTO employee works 39 weeks, which is 195 working days.

Paid leave accrues 0.1654 days of leave for every day worked so the paid leave entitlement should be 195 x 0.1654 = 32.253 days.

The number of paid days (working days plus paid leave) per year should therefore be 195 + 32.253 = 227.253 total paid days per year, compared with 260.71 paid days for a year-round employee.

This can be expressed as a percentage of the all-year-round contract: 227.253 divided by 260.71 = 87.167% of the FTE.

The TTO employee should therefore receive 87.167% of the full-time equivalent pay.

(227.253 days is equivalent to 45.45 weeks (i.e. 227.253 / 5 = 45.45 weeks) consisting of 39 working weeks and 6.45 weeks’ holiday).

Summary look-up table – 39-week contract

The table below shows a summary of the calculations for a 39-week TTO employee for the three levels of leave entitlement in the NHS Terms and Conditions.

The Brazel case and minimum leave calculation under the Working Time Regulations

The Supreme Court’s July 2022 decision in the ‘Brazel’ case (which upheld the Court of Appeal’s 2019 decision) means that where the calculation of a TTO employee’s annual leave entitlement results in an entitlement of less than 5.6 of their weeks, the Working Time Regulations require the annual leave entitlement to be increased to 5.6 weeks.

For example, a TTO employee working 35 weeks of the year (175 days) a year and with less than five years’ service would have the following calculation:

0.1551 x 175 = 27.14 days’ holiday.

If they worked five days a week 27.14 days = 5.4 weeks. They would need an additional 0.86 days’ leave to make their holiday entitlement up to 5.6 weeks i.e. 28 days.

In 2022, the government released a consultation on the calculation of holiday entitlement for part-year and irregular-hours workers, as part of wider EU legislative reforms. The outcome of this consultation was announced in November 2023 and the government introduced changes to the Working Time Regulations on 1 January 2024 which now overrule the “Brazel” case outcome.

These changes set out that for holiday years beginning on or after 1 April 2024 employees who have part year/TTO contracts which cover periods when they are not working, should receive an appropriate proportion of the paid leave entitlement for an employee working all year round – this includes all annual leave and public holidays. -For holiday years that began before April 2024, employees are entitled to the statutory minimum of 5.6 weeks’ holiday per year as set out in the Working Time Regulations or the pro-rata contractual entitlement, whichever is the greater (in line with the decision from the “Brazel” case).

Term-time and part-time contracts

Where the term-time employee also works a part-time pattern i.e. fewer than 37.5 hours a working week, a two-element pro-rata calculation will apply in the pay calculation. 

NB if the employee works non-standard hours or the working hours vary per day please use the hours-based calculation outlined below).

An additional check will be needed for the public holiday entitlement as the Handbook says the pro-rata calculation is rounded up to the nearest half day for part-time staff*

Worked example – 39 weeks per year, 15 hours week, 5-10 years’ service

Accrual per day = 0.1654 days (see look-up table above) (*but check public holiday rounding)

Total paid days = 227.253

(195 working days + 32.253 days’ holiday – see look-up table above)

37.5 ÷ 5 = 7.5 hours per day for full-time hours work pattern. 

227.253 paid days x 7.5 hours = 1,704.4 paid hours per year for a 39-week TTO employee working full-time hours work pattern.

1,704.4 / 37.5 hours x 15 hours = 681.76 paid hours per year for a TTO employee working 15 hours a week.

For a year-round full-time employee total paid time = 260.71 days x 7.5 hours = 1,955.325 hours.

Combined pro-rata calculation = 681.76 ÷ 1955.325 = 34.87%

The employee should receive 34.87% of the salary of a full-time year-round employee.

Hours-based calculations

If a term-time employee was contracted to work 7 hours on a Tuesday and 3 hours on a Thursday (10 hours a week) for 39 weeks a year, it would be more appropriate to calculate their pay and leave entitlement based on hours rather than days.

Again, hours should be compared to those worked by an all-year-round equivalent (FTE) employee to calculate the proportion of leave and pay they are entitled to.

For a year-round full-time employee with 5-10 years’ service total working days are 223.71 (see table above).

Total working hours per year are 223.71 x 7.5 = 1,677.825 hours.

Total hours of leave are 37 days x 7.5 = 277.5 hours.

For the TTO (39 weeks) employee with 5-10 years’ service total working hours per year are 390 (10 hours a week x 39 weeks).

This equates to 23.24% of the hours of an all-year-round equivalent employee (390 ÷ 1677.825).

Therefore, the term-time employee should be entitled to 23.24% of the basic pay and leave entitlement of the all-year-round equivalent employee i.e. 64.49 hours of leave (23.24% of 277.5).

It should be noted that where workers undertake irregular hours, so that their pay changes from week to week, it will be necessary for employers to calculate pay for annual leave each time that leave is taken.

• Flexible working guides for line managers and staff.
• Guide to making flexible working requests flowchart.
• Flexible working common myths.
• What NHS organisations are doing to support staff to work flexibly.
• Flexible working – enablers for change.

A MARS is a scheme under which organisations may offer a severance payment to an employee to leave their employment voluntarily. A MARS helps to increase flexibility for an employer to be able to address periods of rapid change and service redesign. 

The scheme has been developed to assist employers in addressing some of the financial challenges facing the NHS in the years ahead. Its key purpose is to create job vacancies which can be filled by redeployment of staff from other jobs or as a suitable alternative for staff facing redundancy. 

It would be for employers working in partnership with local staff side to determine the eligibility criteria for the MARS. Section 4.2 in the national MARS sets out the required exclusions to the eligibility criteria. 

Registering an interest does not commit employees to proceeding with voluntary severance. Employees can withdraw their application at any time up to the point that they sign a compromise agreement.

Yes, if they satisfy the eligibility criteria. This should include staff on maternity leave, long term sick leave, secondment or unpaid leave. The nature of their absence may mean communications are difficult or sensitive, but it is important that their attention is drawn to the existence of the scheme. It is the responsibility of employers to identify and contact these employees to inform them about the scheme.

It is for employers to ensure that all employees are alerted to the scheme but employers should not target anyone specifically. This could be misinterpreted and may leave the organisation open to potential litigation on a number of grounds including discrimination. 

Explain that there is a process and you will have an opportunity to provide your feedback if they apply. You cannot advise them personally on whether or not they should apply.

If an employee has already submitted their resignation or given some other kind of clear indication that they intend to leave the organisation, they are not eligible for a voluntary severance payment.  If an employee asks to rescind their notice in order to apply for the scheme this should not be agreed to regardless of whether a termination notice has been completed.

The MAR scheme is not a redundancy or a voluntary redundancy. Entitlements to redundancy are set out in Section 16 of the NHS terms and conditions of service handbook.  

Employees are not being made redundant under MARS as they are leaving voluntarily. The national benefit rules are very complex and depend upon personal circumstances. If employees feel that they may have to rely on benefits, then they should seek advice before submitting an application. They could contact the national benefits helpline for advice: Tel:  0800 055 6688, or visit the Directgov website , or alternatively contact Citizens Advice on 0844 8487979 for further information. 

Basic pay is defined as the pay employees receive based on pay scale/band and as stated on their pay slip.  It does not include any additional payment such as: 

• Overtime/emergency work done/waiting lists
• Additional programmed activities 
• On call 
• Emergency Commitment payments 
• Acting Up 
• Special Duty/Enhancement payments 
• Recruitment and retention Premia (Long & Short) 
• Discretionary points 
• Distinction awards 
• Band Supplements 
• Intensity Supplements 
• CD Responsibility  
• Clinical Excellence Awards

Yes, this is classed as part of basic pay. 

Basic pay will be confirmed to employees if their application is accepted. The payment will be based on the basic pay which they are entitled to on their last day of service.

Additional questions to consider: 

Employees may also ask about the selection criteria or local approval process. These are matters for local discretion. Employers should prepare appropriate local FAQs to address these: 

• What is the decision making process for receiving expressions of interest? 
• What criteria should be considered by the Organisational/ Divisional/Directorate panel?  
• I may have exceeded my annual leave entitlement by the leaving date, what happens?  
• What happens if you do not get enough applications, will redundancies be compulsory after this offer has ended? 

Employees can choose to: 

• leave their pension contributions in the scheme 
• transfer their  pension to another scheme 
• take their contributions out of the scheme if they have less than two years service 
• apply for their Pension 
  • take voluntary early retirement subject to eligibility criteria
  • claim their  pension - subject to eligibility criteria 

If employees leave their pension contributions in the scheme, it will be index linked. This means it will grow in line with inflation, with the annual uplift being applied each April. 

If employees do re-join the scheme within 12 months, their membership will link up and all the membership will count when their retirement benefits are worked out. 

If employees have less than 2 years membership and choose not to return to the NHS within 12 months then they can apply for a refund. They do not have to wait until they have been out of the NHS employment for 12 months to exercise this option.

If employees do not return to NHS employment within 12 months and have not applied for a refund, the pension agency will contact them at their last known address and advise them that they have insufficient membership to retain an NHS pension and the contributions will be refunded. 

Employees can apply to have their pension paid when they reach normal pension age, provided they have qualified for benefits. Those employees with a pension under the 1995 Scheme who leave under MARS and then return to the NHS within 5 years will be eligible to rejoin the 2015 Scheme so long as they have not already taken their pension. 

If employees decide to transfer their benefits, they should contact their new provider. They will explain how much pension their transfer value will buy in their scheme and employees can decide if they want this transfer to happen. Transfer can only take place if their new scheme is registered with HMRC. 

Those with at least two years’ membership can apply for a transfer at any time before they reach normal retirement age. Those with less than two years’ membership would need to register with a new registered pension scheme within 12 months of leaving NHS pensionable employment. In addition they would need to apply for a transfer within 12 months of joining a new scheme or before they reach normal retirement age, whichever is earlier. 

Employees can only do this if they have less than 2 years service. Employees will not receive the full amount of pension contributions they have paid. The amount paid will be subject to Tax and National Insurance deductions. Employees can download a form to request a refund of contributions from the pension website. 

This may be possible - to qualify for early retirement when leaving the NHS under this voluntary scheme, staff in the NHS Pension scheme must have at least two years’ pensionable service. If the member of staff has been an active pension scheme member since 5 April 2006 or earlier, early retirement may be possible from age 50. If the member of staff joined the NHS pension scheme after this date, early retirement may be possible from age 55. 

However, unless employees are over age 60, their accrued benefits will be reduced by an actuarial sum, based on the cost to the scheme of them accessing their pension benefits early.

Employees in the NHS Pension scheme who qualify for early retirement may also choose not to access their pension benefits at all immediately on leaving, in which case their accrued pension benefits will remain in the pension scheme and may be either taken as a deferred pension at normal retirement age or may be transferred to another pension scheme in the future.

Organisations would not be able to consider this whilst an ill health application is being considered by NHS Pensions.  However, if employees are told that it is not successful and they are not appealing against the decision, they may submit an application for voluntary severance.

Under the voluntary severance scheme, there is no provision for organisations to make a payment which would give employees an enhanced early retirement pension payment. Therefore, should employees leave their organisation under voluntary severance terms over the age of 50, they will not be eligible for an enhanced retirement package.  If they wish to leave the organisation in these circumstances, they should be advised to seek further guidance prior to opting for voluntary severance so that they are aware of all the implications.

Not directly; your benefits from the NHS Scheme must be reduced because they are being paid before your normal retirement age.   But you can if you wish, ask your employer to use some or all of your MAR lump sum to buy "Additional Pension" (AP).  AP is paid at the same time as your early retirement benefits and could help offset the actuarial reduction.  Remember though that AP increases only your early retirement pension, not your lump sum.  It is important to note that, as a consequence of the employer buying the "additional pension", any amount over £30,000 would not normally be subject to tax as it would if the additional pension were purchased by the individual.  Generally where a contribution is made into a tax exempt pension scheme (such as the NHSPS) then the amount will not be subject to tax.  The rules are, however, complex and individuals may wish to visit the HMRC guidance below for a comprehensive explanation of whether an amount paid in "additional pension" will be subject to taxation. http://www.hmrc.gov.uk/manuals/eimanual/EIM13735.htm 

Your employer can apply to buy AP at any time up to the date of your MAR. AP cannot be bought after you have left the NHS.

NHS Scheme early retirement benefits are reduced according to how early you take them.  The reduction is biggest at age 50 and much smaller at age 59.  AP can be bought in units of £250, up to a maximum of £5,000.  The cost depends on the amount of AP you buy and your age at the time of purchase.  Remember though that the charges for AP assume scheme members will retire at normal retirement age.  This means that the AP will be reduced, according to the age at which you take MAR.  Your employer will be able to help you work out how much AP your MAR lump sum would buy.

For example: 

An employee who is a member of the 1995 Section with 20 years scheme membership and pensionable pay of £40,000 would receive a pension of £10,000 if they retired at 60. Their MAR payment would be 10 months pay: £33,330. If they chose to take the MAR scheme at the age of 58 their payment would be actuarially reduced (due to early retirement) by 11%. Their pension would therefore be reduced to £8,900. 

If the employee requested that their employer buy them AP of £1,500, this AP would also be subject to the actuarial reduction for early retirement of 11% and would therefore be reduced to £1,335. 

However, when added to their total pension of £8,900. this would offset the actuarial reduction and provide a total pension of £10,235. It would therefore give them a greater pension amount than the £10,000 they would receive if they did not take early retirement. The cost of buying £1500 of additional pension is £28,980 for a 58 year old. Their employer could buy £1,500 additional pension for the employee and pay a net MAR payment of £4,350. 

The NHS Pensions Scheme Guide should allow employees to calculate the impact of the actuarial reduction for early retirement on their pension amount. The NHS Pensions website has a section on buying additional pension which will be useful for employees to reference - it includes an additional pension calculator.

In light of complexity around using MAR to offset the loss of benefits due to Early Retirement, anyone considering this option may want to take independent financial advice before proceeding. 

Please note: Outside of MARS it is open to employers to offer employees "Retirement in the Interest of the Efficiency of the Service". This is covered under section 16 of Agenda for Change. 

Employees should be asked to use any outstanding leave during their notice period. If this is not possible due to operational requirements they should be paid in lieu for any outstanding annual leave due at the last day of service, provided this has been agreed with their line manager prior to their resignation date being finalised. 

It would be for local determination regarding the period that the employer wished to restrict an employee, leaving under MARS, from returning to work for the employer. This would be subject to the repayment requirements as set out below. 

The purpose of the MARS payment is to compensate employees for loss of employment. Employees who leave the NHS under MARS would not be re-employed under normal circumstances by the NHS in England, in the same or a different post, before a period of 1 month has elapsed. If an individual does return to the NHS within a month they would be required to repay any MARS payment in full.

Where an employee returns to work for the NHS in England within 6 months and before the expiry date of the period for which they have been compensated (as measured in equivalent months/part-months salary), then an employee would be required to repay any un-expired element of their compensation. This would be reduced to take account of any appointment to a lower grade and reflect net salary. The compromise agreement should specify the requirement to repay monies in such circumstances and may provide for a period of repayment.

These are as follows: 

Mutually agreed Resignation - National scheme with Repayment 

Mutually agreed Resignation - Local scheme with Repayment 

Organisations will need to select the appropriate field when recording the reason for leaving related to a MARS payment accordingly.

Staff who are made redundant should receive one month’s pay per year of reckonable service, with a maximum of 24 months’ pay (only full years of reckonable service can be counted when calculating redundancy pay as employment for part of a year should be disregarded).

A month’s pay, subject to a total annual earnings floor of £23,000 and cap of £80,000, will be either an amount equal to 1/12th of the annual salary at the date of termination or 4.35 times a week’s pay whichever is more beneficial to the employee (the average month has 4.35 weeks). The calculation of 4.35 times a week’s pay should be made in accordance with the Employment Rights Act 1996.

Redundancy entitlements are, in the main, determined by service criteria. In redundancy compensation, there are two concepts of service - continuous service which employers need to consider first and reckonable service which then determines the period(s) of service to be counted in paying redundancy.

Continuous service

Employees must first have sufficient continuity of service to be eligible for an NHS contractual redundancy payment:

• a minimum of two years NHS service with one or more NHS employer (See Annex A, NHS terms and conditions of service handbook) with a break of no more than one statutory week
• where an employee has had a break in NHS service of more than one statutory week, the prior service is not counted for the purposes of accruing the necessary minimum period of two years continuous service.

Reckonable service

Once an entitlement to redundancy has been determined, NHS reckonable service will then be used as the basis for determining the eligible service to be used in calculating the amount of the contractual redundancy payment.

All continuous NHS employment with one (or several) NHS employers counts as reckonable service for redundancy compensation, unless it has been taken into account in a previous redundancy – or loss of office payment (paragraph 16.6, Section 16 (England) of the NHS terms and conditions of service handbook) or Mutually Agreed Resignation Scheme (MARS) severance payment (paragraph 20.18 of the NHS terms and conditions of service handbook).

Providing the employee has not had a break in NHS service of over twelve months the period of NHS employment prior to any break counts as reckonable service and therefore previous service can be included when calculating contractual redundancy.

Exclusions - when reckonable service is not counted

Reckonable service is not counted when:

• service is counted previously in respect of a redundancy by an NHS employer
• any previous employment for which an employee has received NHS pension benefits
• loss of office payment
• MARS severance payment (which is offset against any subsequent redundancy payment).

Redundant employees who have reached the minimum pension age and are members of the NHS pension scheme can, if they wish, take their pension early.

The payment will be met from the lump sum redundancy payment that the employee would have received but in cases where the cost to the employer of paying the single payment is less than the value of the redundancy payment, the employee will also receive any balance due. However if the cost of early retirement is more than the redundancy payment due, the employee will have the one-off option to make up all or part of the difference out of their own personal funds.

More details about early retirement provisions and redundancy can be found in paragraphs 16.12 - 16.15 of Section 16 (England) of the NHS terms and conditions of service handbook.

Suitable alternative employment is a concept of the Employment Rights Act 1996 and an important part of a robust redundancy process. It is an employer’s responsibility to seek suitable alternative employment for staff before making redundancies. Paragraphs 16.21 -16.23 of Section 16 (England) of the NHS terms and conditions of service handbook provides information for employers on the issue.

In general terms, whether a job is 'suitable' will depend on a number of key factors including:

• how similar the work is to the employee’s current job
• the terms of the job being offered
• skills, abilities and circumstances in relation to the job
• the pay (including benefits), status, hours and location.

The question of suitable alternative employment should be determined on a case by case basis. See the findings of the Employment Appeal Tribunal - Readman v Devon Primary Care Trust.

ACAS has produced guidance on redundancy.

A factsheet on Premature Retirement has been produced by NHS Pensions.

What changes have been made to the NHS redundancy pay provisions (1 April 2015)?

Under the old provisions there was no limit on the salary used to calculate a redundancy payment. The changes will see the introduction of a salary cap of £80k and a floor of £23k for lower paid staff. For staff with total earnings of more than £80K, the figure used for calculating a redundancy payment will be £80K. For staff with total earnings of less than £23k the redundancy pay will be calculated using the £23k figure.

Changes have also been made that remove the employer ‘top-up’ provisions for those who are made redundant over the age of 50 and chose to retire early. Under the old provisions an employee could choose to use their redundancy payment to fund the actuarial shortfall in their pension of taking it early and the employer was liable for any shortfall. This employer liability has now been removed but an employee can still choose to use their own funds to cover any shortfall at the time of the redundancy.

What happens if the formal redundancy consultation starts before 31 March 2015?

For employees subject to formal redundancy consultation which commenced prior to 1 April 2015, the old redundancy provisions in force prior to 1 April 2015 will apply.

What happens if the formal redundancy consultation starts after 31 March 2015?

For employees subject to formal redundancy consultation which commences after 31 March 2015, the new redundancy provisions will apply.

How does continuous service and reckonable service interact?

An employee is required to have two years (104 weeks) of continuous service in order to qualify for an NHS redundancy payment. This is service where there has not been a break of more than one week (measured Sunday to Saturday). Once the employee has earned the two years continuous service, they then qualify for an NHS redundancy payment. Any service over these two years will then count towards reckonable service, as long as they have not had a break of more than 12 months.

Does employment outside of the NHS count towards reckonable service?

It is at the employers discretion as to whether periods of employment outside of the NHS are counted as reckonable service. We suggest that where employment is outside of the NHS, but relevant to NHS employment, it would be reasonable to include this in the NHS redundancy calculation. However, this should be agreed with the employee when they join the NHS and with any subsequent NHS employer.

What if an employee has several breaks in service but when the breaks are added together they are for less than 12 months?

Providing the employee satisfies the qualification/continuity of service criteria for redundancy, then the period(s) between the breaks count as reckonable service for redundancy purposes, although the period of the break itself will not count.

If an employee has over 2 years reckonable service but falls short of 3 years’ service, what period of reckonable will be used in the redundancy calculation?

The NHS terms and conditions of service state that fractions of a years’ reckonable service are not counted when calculating redundancy pay, so therefore if the employee had 2 years and an amount of days below a further complete year, then they would not be entitled to have that third year of reckonable service counted as it would only be a part year.

Are bank staff eligible for NHS redundancy?

The NHS terms and conditions of service handbook does not cover contractual redundancy arrangements for bank staff so entitlement to redundancy will be a matter for individual employers and will largely depend on the detail in the local contract of employment of the individual concerned.

What about employees on fixed term contracts?

If the reason for termination of the fixed term contract is redundancy and they have 2 years continuous service, then the employee should be treated in the same way as an employee on a permanent contract.

What about service in a GP practice? Could this count for NHS redundancy?

Service with a GP practice does not automatically count for an NHS redundancy payment as it is not NHS service which has to be with an NHS employer (see Annex A of the NHS terms and conditions of service handbook). However, employers do have the discretion to recognise service outside the NHS. Section 16.5 (third bullet) states that employers do have the discretion to take into account “any period of employment with employers outside the NHS where these are judged relevant to NHS employment”.

What is included in a month’s pay?

As set out in Section 16 (England): 16.7 of the NHS terms and conditions of service handbook, a month’s pay is defined as whichever is more beneficial from the 2 calculation as follows:

• 4.35 times a week’s pay, calculated in accordance with the provisions of Section 221 to 224 of the Employment Rights Act 1996
• an amount equal to 1/12th of the annual salary in payment at the date of termination of employment.

Payment should be calculated on the basis of the employee’s "normal working hours" so would include unsocial hours but would not normally include overtime unless the employee is entitled to it under their contract of employment i.e. if the employer must provide overtime and the employee must work it. This would include any contractual payments for that period.

How will a redundancy payment be calculated for staff earning less than £23,000 per year?

The redundancy payment will be calculated as if the earnings were £23,000, subject to the minimum two-year qualifying period and a maximum of 24 years of reckonable service.

How will a redundancy payment be calculated for staff earning more than £80,000 per year?

The redundancy payment will be calculated as if the earnings were £80,000, subject to the minimum two-year qualifying period and a maximum of 24 years of reckonable service.

How will a redundancy payment be calculated for staff earning more than £23,000 per year but less than £80,000 per year?

The calculation of the redundancy payment will remain unchanged.

An employee is working part time 18.75 hours per week (0.5 FTE) and earns £50,000 pa. They have more than 24 years’ continuous service. What would their redundancy payment be?

The full time equivalent (FTE) earnings is £100,000 and therefore for the purposes of the calculation the cap of £80,000 will be used:

(Annual Earnings/12 months x Number of years’ reckonable service) x Full time equivalent = Redundancy payment.

(£80,000/12 x 24 years’ reckonable service) x 0.5 FTE = £80,000.

Is the redundancy lump sum tax free?

The first £30,000 is tax free. Anything above this is taxable.

Is there a redundancy calculator for employers?

Employers can calculate redundancy payments on Pensions Online (POL), via the NHS Pensions website. POL was upgraded to process estimates of redundancy benefits.

How do employers calculate capitalised costs?

Employers are able to run the redundancy quotes through the Pensions On-line (POL) programme that can be accessed via NHS Pensions. This will produce the member's pension and lump sum figures, which are required to calculate the capitalised cost, however pensions on-line will calculate all three.

Scenario 1 - Concurrent part time roles

An employee has two concurrent posts with the same employer (or two different employers):
1. Post A is a 0.5 wte (whole time equivalent 37.5 hours per week) band 7 role and the individual has been in the post for 10 years.

2. Post B is 0.5 wte band 8a role and the individual has been in this post for 1 year.

The employee has over 24 year’s continuous unbroken service with the NHS.

If the individual was made redundant from the first post what would their entitlement be?

24 years’ service x 0.5 wte month’s pay for Post A.

The second concurrent post is then subsequently made redundant two years later. What would the employee’s redundancy entitlement be?

24 years’ service x 0.5 wte month’s pay for Post B.

A year after the first redundancy the employee increases their wte hours to 1 wte (37.5 hours). A year after this, they are then subsequently made redundant. What would the employee’s redundancy entitlement be?

Post A resulted in 24 years’ service x 0.5 wte month’s pay. Therefore for Post B the payment would be 23 years’ service x 0.5 wte month’s pay + 1 year years’ service x 1.0 wte month’s pay.

Scenario 2 - Sequential concurrent roles

An employee with 30 years unbroken NHS service has a series of concurrent NHS posts with the same employer (or different employers):

1. Post A is a 0.5 wte (whole time equivalent 37.5 hours per week) band 7 role and the individual has been in the post for 10 years at the time of being made redundant.

2. Post B is 0.5 wte band 8a role and the individual has been in this post for 1 year prior to Post A being made redundant and 2 years after before Post B is made redundant.

3. Post C is 0.6 wte Band 7 role which the individual starts shortly after Post A is made redundant and holds this post for 5 and half years before Post C is made redundant.

What would the employee’s entitlement to redundancy be for Post C?

Whilst Post B and Post C are concurrent, Post C was never concurrent with Post A and therefore the reckonable service for the purpose of Post C would start from the date it was concurrent with Post B and include any unused eligible aggregated reckonable service. The redundancy payment for Post C would be:

11 years’ service (6 years eligible unused aggregated service + 5 years’ service since Post A being made redundant) x 0.6 wte month’s pay.

Scenario 3 - Concurrent part time roles greater than 1.0 wte

An employee has two concurrent posts with the same employer (or two different employers):

1. Post A is 1 wte (37.5 hours per week) Band 7 role

2. Post B is 0.27 wte (10 hours per week) Band 2 role

The employee has over 17 year’s continuous unbroken service with the NHS.

If the individual was made redundant from the first post what would their entitlement be?

17 years’ service x 1 wte month’s pay.

The second concurrent post is then subsequently made redundant two years later. What would the employee’s redundancy entitlement be?

19 years’ service x 0.27 wte month’s pay.

Scenario 4 - Non concurrent part time roles

A part time employee is employed on a 0.6 wte basis and has 24 years’ service. They are made redundant and are paid 24 years’ service x 0.6 wte month’s pay. Three months later they a re-employed in the NHS on a 0.8 wte basis. 5 years later they are made redundant again. 

What would their redundancy entitlement be in the second role?

5 years’ service x 0.8 wte month’s pay.

How is suitable alternative employment defined?

Section 141 of the Employment Rights Act 1996 governs the rules on suitable alternative offers of employment in relation to redundancies. The legal framework establishes the duty on employers to take reasonable steps to find, where possible, suitable alternative employment for affected staff. Whether a job is 'suitable alternative employment' depends on several things including:

• how close the work is to current job
• the terms of the job being offered
• skills, abilities and circumstances in relation to the job
• pay (including benefits), status, hours and location of the job.

The question of suitable alternative employment should be determined on a case-by-case basis. See the findings of the Employment Appeal Tribunal - Readman v Devon Primary Care Trust.

How long should employees wait before they can obtain another post within the NHS?

Section 16 (England): 16.20 of the NHS terms and conditions of service handbook states that employees are not entitled to a redundancy payment if, at the date of the termination of their contract, they have obtained without a break or with a break not exceeding four weeks, suitable alternative employment in the NHS. We therefore advise that if employees obtain suitable alternative employment within four weeks of the termination of their contract, they would not be entitled to their redundancy payment.

Suitable alternative employment is a concept in the Employment Rights Act 1996 and invariably there is a degree of interpretation involved. Suitable alternative employment would normally include duties of the post, salary, earnings protection, location of post, qualifications, and aptitude and need for training.

If the employee is made redundant again in the future, they would only be entitled to NHS redundancy for the period post re-employment, as described in Section 16 (England): 16.6 of the NHS Terms and Conditions of Service Handbook.

What about a pregnant employee on maternity leave? Can they be made redundant?

A pregnant employee or one on maternity leave can initially be treated the same as other employees in the pool for selection for redundancy. However, an employee must not be selected for redundancy for a reason connected to her pregnancy, the birth of her child or maternity leave. If you do not establish a fair reason for the employee’s dismissal, you may face an unfair dismissal and sex discrimination claim, irrespective of the employee’s length of service. However, if employees on maternity leave are selected, special provisions concerning offering alternative employment apply to protect them.

What are special provisions?

An employee on maternity leave is entitled to priority over those not on maternity leave as far as suitable alternative employment is concerned. If a vacancy exists, she must be offered the alternative employment under a new contract immediately following the day on which her previous contract comes to an end. The new work must be suitable and appropriate for her to do and must not be substantially less favourable than that of her previous contract. Where a suitable vacancy exists and the employer fails to offer it, an employee’s dismissal will be deemed automatically unfair.

What is the position for staff who are made redundant but who are over the minimum pension age?

Employees who have reached minimum pension age and have two years' membership to the NHS pension scheme can opt to take their pension early. In effect, the employee buys out the reduction with their redundancy payment. If the redundancy payment is not sufficient to buy-out the full reduction then the employee can choose to make an additional payment at the time of the redundancy to make up the full or partial difference. (Section 16 (England): 16.14).

What about employees who have retired, returned to work in the NHS and subsequently made redundant? Does their previous NHS service count for redundancy?

Section 16.6 of the NHS terms and conditions of service handbook states that reckonable service does not count for employment where the member has taken pension benefits.

16.6 The following employment will not count as reckonable service:

• employment that has been taken into account for the purposes of a previous redundancy, or loss of office payment by an NHS employer
• where the employee has previously been given pension benefits, any employment that has been taken into account for the purposes of those pension benefits.

However, if the employee has a break of less than one week after they have retired, they would be entitled to statutory redundancy. In order to prevent this situation arising, employers may require a break of 14 days between retirement and re-engagement to ensure that there has been a ‘statutory’ break in service.

How should career breaks be treated in a redundancy situation?

We believe that if the post of an employee on a career break becomes at risk of being declared redundant, the employee should be afforded all the rights they would have, where they attending work. Being on a career break will not, however, afford any special protection against redundancy; neither will it be used as a reason for identifying the post as redundant.

The NHS terms and conditions of service handbook is not explicit on the issue of pay to be used to calculate redundancy whilst on a career break and you may wish to seek your own legal advice on the matter before proceeding. However, as there is a requirement to return the employee to full pay during a notice period prior to a contract of employment coming to an end we would assume that using zero pay is not appropriate when calculating a redundancy entitlement.

Section 34 of the NHS terms and conditions handbook contains information relating to the employment break scheme. With regards to suspending redundancy provisions as outlined in section 34, you should count service before the break but not the break itself.

If an employee had taken advantage of the salary sacrifice arrangements but is later made redundant, how would you calculate their redundancy payment?

This is not covered in the NHS terms and conditions of service handbook. Salary sacrifice is covered by employment and contract law and describes a legally binding change in the contractual arrangements between an employer and an employee - whereby an employee gives up the right to receive part of their cash salary, under their contract of employment, usually in return for some form of non-cash benefit. As salary sacrifice is about varying the employee’s terms and conditions, it is a matter for agreement between the employer and the employee concerned and you may wish to seek legal advice on the implications of a salary sacrifice scheme before proceeding.

In implementing salary sacrifice arrangements we are aware that employers adopt different contractual approaches in relation to the terms of their local schemes. In a redundancy situation, providing employees have been made fully aware of the implications on their terms and conditions of service, it would be appropriate to calculate redundancy pay on the reduced salary, after taking away the salary sacrifice element, where the individual had not opted to end their salary sacrifice arrangement prior to the end of their employment contract. Further guidance on salary sacrifice is also available from HM Revenue and Customs (HMRC).

Is an employee entitled to a redundancy payment if they have previously been made redundant?

Yes, but they must start again to build up their service before they would qualify again for redundancy. So in effect the clock starts again on return to work. Therefore, if the employee meets all qualifying criteria, they would be entitled to a redundancy payment for their service in the new post but remember that service can only be counted once for the purpose of redundancy.

Who do the arrangements apply to?

All staff covered by the NHS Terms and Conditions of Service Handbook. The arrangements do not apply to staff within the remit of the Doctors' and Dentists' Review Body and very senior managers, with the exception of those employed on the Terms and Conditions of Service for NHS Doctors and Dentists in Training (England) 2016. For these doctors, their terms and conditions make clear that the rates of reimbursement can be found in Section 17 of the NHS Terms and Conditions of Service Handbook.

Other doctors and dentists not on the 2016 contract will be paid at the mileage rates set out in their terms and conditions, and in the latest Medical and Dental Pay and Conditions Circular.

For very senior managers, they will be paid according to their local policies and contracts of employment.

How does the system work?

The same reimbursement rates apply to all staff. There is no distinction between staff who travel often on NHS business (regular users) and those who travel less often (standard users). The size of engine does not count. The NHS Staff Council will set the rates in partnership, and will review them twice a year, moving them up or down to ensure they are in line with current fuel rates.

Why does the rate of reimbursement drop after 3,500 miles?

This is the point at which employers and staff need to discuss the possibility of lease, pool or hire cars. We also believe that this is the level at which the standing costs for running a vehicle for business purposes have been met. To continue to pay a full rate of reimbursement for all miles travelled would run the risk of putting some staff into profit when using their vehicle for work.

What if an employee starts doing more business miles at work?

These rates of reimbursement will be paid for each business mile travelled. That is at 59 pence per mile before 3,500 miles in a year and at 24 pence per mile thereafter. Subject to this threshold each additional business mile travelled is reimbursed at the appropriate rate, subject to the qualifying rules.

What if an employee changes his/her car?

This will not affect the reimbursement staff receive for the costs of the business miles they travel for work.

When does the 3,500 miles per annum run from - April to April or July to July?

The agreement does not specify. The ESR is set up to start counting from July (when the agreement came into effect) to July.

How often are business motoring costs reviewed?

The NHS Staff Council reviews the costs of fuel twice a year in April/May and November/December, If these reviews show that reimbursement rates need to change, in line with the Staff Council agreement, new rates will apply from 1 January and 1 July respectively.

Will any changes in motoring costs trigger a change in the rates of reimbursement?

If the review produces a change in the rates of reimbursement of less than five per cent, up or down, rates will not change. If the change in rates produced by the change in motoring costs is more than five per cent, rates will change on 1 July or 1 January.

What mileage is included in claims for reimbursement?

The system uses the principle of eligible miles and requires that normal, daily home to base return mileage is deducted from claims for reimbursement i.e. the system provides for only additional out of pocket expenses to be claimed. It is not necessary to use triangles to calculate reimbursable mileage.

What happens if the employee normally starts his/her NHS business journeys from home?

The agreement requires the employer and employee to agree the normal work base and the normal home to base return mileage. When the line manager and employee agree that the employee is based at home for the purposes of mileage claims the employee is reimbursed for all business miles travelled from his/her home to the places visited and back to home.

What is the reserve rate?

The reserve rate is for use:

• if an employee unreasonably declines the employers offer of a lease car
• when employees are required to return to work or when they work overtime on any day
• when an employee is moved to a new base and they incur additional travel to work expenses
• and in a limited number of other circumstances as detailed in the agreement (paragraph 17.17).

What about costs for motorcycle users?

The system contains rates of reimbursement for motorcycle users which will be linked to rates for car users.

What about rates of reimbursement for lease car users?

Arrangements for the provision of lease cars to NHS staff are the responsibility of local partnerships, and informed by HMRC recommended rates.

Do NHS organisations have to use this system?

Where there are already locally agreed alternative arrangements in place, for example approved mileage allowance payments (AMAP) rates, then it will be for the local parties to decide if they wish to maintain the local agreement or implement the national system (paragraph 17.4).

Employers are free to seek to negotiate a local alternative for mileage reimbursement, but this would be dependent upon agreeing this in partnership.

What makes the system compatible with the responsibilities on the NHS to reduce its carbon footprint?

The system discourages excessive travel when this is not in the best interests of patients. Rates of reimbursement are not linked to engine size. The system supports motorcycle users and travel by pedal cycle whenever this is consistent with efficient use of time and resources.

The first important element of a JD is the job title, which should have the following qualities: 

• It accurately reflects the nature of the job and the duties performed. 
• It reflects its ranking order with other jobs. 
• It is free of gender or age implications. 
• It is self-explanatory for recruitment purposes (in most online job searches, the job title is the main key word searched). 

Never write a job description with a person in mind. The most important aspect of a JD is that it reflects what the service needs. 

This should be the essence of the role, for example to provide HR advice to managers. Just concentrate on the main reason for the job existing, you will be able to add specific tasks and responsibilities in the next section. 

The job description should contain a list of duties and responsibilities associated with the role. You could indicate the amount of time expected to be dedicated to each task, which should be represented as a percentage, for example: 

• filing 20% 
• data entry 40%. 

Descriptions of duties should be no more than two or three sentences in length and should be outcome-based, containing an action, an object and a purpose. For example: ‘Compiles monthly reports to allow monitoring of the department’s budget’. 

• Use examples to illustrate where possible. Make sure responsibilities are relevant. 
• The list of duties and responsibilities will vary in length, but as a rule, should be as short as possible, otherwise the document becomes an operational manual rather than a job description. 
• Keep it factual and do not repeat tasks/responsibilities. Avoid gender specific or discriminatory language. 

As well as being helpful for a job evaluation panel to understand how departments are structured and how roles are interfaced, it also confirms to prospective candidates where their job will sit in the service/department. 

Asking for many years of experience may fall foul of both age discrimination and gender discrimination law, as it could prevent younger people and women from applying for certain jobs. 

Instead of specifying years of experience or service, which is time-based so potentially indirectly age discriminatory, employers should specify the type, breadth or level of experience needed for the particular job and the skills and competencies required. 

Remember to use straightforward, phrases and sentences, avoid abbreviations and always explain what you mean by your terminology.