University plans for second-class employees

The University of South Wales (USW), has announced new members of staff will not be directly employed by the institution and will receive inferior pensions. The changes will affect incoming support staff, including workers in I.T., examinations, academic registry, libraries, estates, accommodation and student support from August 2018. Academic staff will not be affected.

UNISON says employees feel angry that new colleagues will effectively be ‘second-class’ employees and the employment conditions associated with their own roles are being diminished. It has promised to resist the changes. The trade union says by targeting non-academic staff, USW has shown how little it values the role of university support workers and accused the university of pursuing outsourcing to allow lesser employment conditions in future. Female employees will be disproportionately affected as they comprise the majority of support staff.

The university claims the drastic measures are a result of increasing pension costs. UNISON disputes USW’s analysis of the current pension scheme and the need to close it to new entrants; the university put aside £5.9 million into reserves last year, in addition to paying out redundancy pay and can afford to provide decent pensions. The university will impose the changes and it refuses to formally consult with the trades unions saying the proposals do not affect current staff.

UNISON has warned existing staff could eventually be transferred to the new company which is likely to pay lower wages, offer fewer employment benefits and may not recognise trade unions.

Dan Beard, UNISON USW branch secretary said,

“This is an extremely unhelpful move by the university, undermining the pensions of the lowest paid. By establishing an arms-length company the university dodges its legal obligation to offer support staff access to the Local Government Pension Scheme.

“Support staff helped build the prestige of USW. Today they are feeling incredibly disappointed and there is no way they will accept the university’s proposals to slash pension benefits or employment conditions. The university should reflect on the Times Higher Education survey of student experience – USW is well behind other Welsh universities and demoralising the current and future workforce will worsen matters.

“Pensions are deferred wages which people have worked hard to receive. Preventing new employees from joining the current pension scheme effectively destabilises and devalues it.

“We will reflect on how we respond to this announcement and industrial action is a very real possibility. We already have support amongst local politicians and we will build on that in our campaign to resist these changes.”

Notes to editors

  • USW, as a post-92 Higher Education Institution offers the Teaching Pension (TPS) to academic staff and the Local Government Pension (LGPS) to all support, professional and technical staff, both schemes are defined benefit schemes and the rational for changing the LGPS seems to be based on unnecessary ‘prudent assumptions’ and growth of the scheme linked to ‘gilts’ instead of the actual asset base of the scheme.
  • The University has also claimed the deficits are increasing; UNISON argues that the problem is with how the liabilities are valued; too prudent assumptions means that even healthy growth of the funds will be outstripped by the costs of the liabilities (i.e. the costs of paying the benefits both now and in the future), it is wrong to suggest that closing the scheme will reduce the existing deficit, it will only affect future pension rights for the lowest paid staff.
  • So far the University has claimed it sees no need to consult with the trade unions on these changes and will impose the new pension scheme by the 1st of August 2018.
  • This approach is being replicated in some other universities across the UK such as Staffordshire, Lincoln, Northumbria and University of West London.
  • UNISON has serious reservations on this plan as it will deny staff a decent pension, represents an erosion of terms and conditions and ultimately is outsourcing via the backdoor with the introduction of a limited company to employ staff. The union has long term concerns on the plan to transfer existing staff into this company and impose additional changes as the private company will be outside the national bargaining structures – the National Framework agreement which covers issues across most UK universities such as common pay rates, annual leave entitlements and sick leave arrangements.
  • We also are concerned on why academics will continue to enjoy decent employment conditions and those that are the lowest paid in the university will be subject to a worse pension.
  • UNISON believes if this is successful then we will see this replicated in other Welsh post 92 Institutions as a domino effect.  This could also have a significant effect on the student experience with the majority of experienced Higher Education professional, technical and support staff opting to be employed by institutions that value the role they play in the university.
  • UNISON believes if other post-92 Universities do follow suit then this will have a significant destabilising effect on the LGPS scheme which also covers workers in local authorities, schools and colleges.



Alastair Gittins, UNISON Press Officer on 07816 538397