Pay Supplement Policy

Pay Supplement Policy

23 October 2023

Graeme Stephen, Job Evaluation Manager

Jennifer Russell, Head of People, Recruitment and Reward

Not applicable

To agree and implement a policy to permit pay supplements to be applied for hard to recruit and to retain roles across SEPA. Such a pay supplement policy would provide clear guidance and consistency of application underpinned by clearly evidenced business cases. The policy considers two potential levels of pay supplement that could be applied:

Level 1 - A total up to £5,000 or 20% of the basic pay if greater, payable for up to 3 years and subject to regular review.

Level 2 – An amount equivalent to up to the maximum of the next highest pay band from the evaluated substantive grade, payable for up to 3 years and subject to regular review. 

The expectation is that most posts will not attract a pay supplement. Supplementary payments are only made in exceptional circumstances. Where: 

• There is a clear requirement to recruit and retain individuals with particular skills, knowledge, and experience in posts.
• The requisite skills, knowledge and experience are core to the post.
• Problems with recruitment and retention would cause material operational difficulties and put at risk the delivery of key objectives. 
• It is the responsibility of the relevant portfolio Chief Officer (the Responsible Person) to consider, in the first instance, whether payment of a supplement may be an appropriate means of addressing the recruitment and retention difficulties being faced. However, a decision about whether a pay supplement should be paid rests with the ‘Pay Supplement Panel’ (‘PSP’). The panel will sit within the remit of SEPA’s ‘Coordination and Resources Group’ or ‘CRG’. This will be subject to review as required. The Panel’s decision will be informed by a business case and evidence gathered and submitted by the Responsible Person. 

Summary of key points within the policy:

• Pay supplements are payable only with strong, supporting, up-to-date evidence.
• Pay supplements are post specific, i.e., individuals do not take the supplement with them on moving to another non-qualifying post.
• Pay supplements are linked directly to recruitment and retention difficulties associated with market pressures and maybe paid to current employees in posts identified.

SEPA's Equality Outcomes 2022-2026

·   Outcome 1:  We have increased the number of people from currently underrepresented groups in our applicants, our staff and those who progress within the organisation.

·   Outcome 2:  People with lived experience of inequality, related to a protected characteristic or socioeconomic status, access and use SEPA’s services without barriers.

·   Outcome 3:  Staff with lived experience of inequality and barriers, and with a wide variety of needs, feel listened to and respected as SEPA meets those needs.

·   Outcome 4:  We have decreased our gender pay gap and occupational segregation related to gender, disability, and ethnicity.

Outcome 4 – the ability to permit pay supplements in hard to recruit and retain roles will be aligned with our goals to reduce our gender pay gap and occupational segregation related to protected characteristics.

Revised policy

SEPA staff through the mechanism of the Joint Negotiation and Consultation Committee (JNCC) in partnership with UNISON.

Scottish Government Sponsor.

Market evidence (external) – up to date evidence about the pay and terms and conditions for comparable jobs in the external labour market. Market evidence should focus primarily on Scotland but can extend beyond the border if the relevant job market is UK or International-wide.

Market evidence (public) – up to date evidence about the pay and terms and conditions for comparable jobs elsewhere in the public sector, e.g.., NDPBs, and other Government Departments (particularly those located in Scotland), local authorities and Environment Agencies.

• Eliminate unlawful conduct.
• Advance equality of opportunity.
• Foster good relations.

The impact of the proposal is designed to ensure that SEPA can recruit and retain against difficult to recruit posts as evidenced under the policy. By ensuring that we deliver our statutory purpose, we ensure there are not undue workload pressures on remaining or, other staff internally and externally provide critical services that benefit the community as a whole. In having the tools to attract and retain key and critical skills we require, there is a clear benefit to everyone in Scottish society to recruit to specialist posts, which in turn protect and serve communities. Failure to address this issue maintains the opposite position whereby we create challenges for remaining staff in teams in which we run vacancies, and do not address the challenges our communities demand.

In relation to the introduction of the pay supplement process, the numbers of staff affected are initially limited to the team of 20 in the Radioactive Substances Unit. Our inability to recruit and retain staff within this unit has been identified as a recorded risk within the corporate risk register. From the data we have, we can analyse the impact that the proposal has on gender. Numbers for remaining protected characteristics are not statistically significant for meaningful analysis to be made.

Within the process, it is proposed to offer what is termed a ‘Level 2’ supplement to the 20 members of staff. Under the SEPA job evaluation scheme, all roles are assessed and placed in the appropriate pay band. With a ‘Level 2’ pay supplement, the pay individuals receive is increased via a pay allowance, to a value equivalent to the top scale point of the next higher grade to address the recruitment and retention challenges. This allowance is applied via a time limited payment for up to a three-year period and subject to regular review. This allowance is in addition, but separate to, the roles core basic pay and is shown separately in employee pay slips. Should any pay supplement recipient leave the qualifying role, the enhancement will cease.

Sex

SEPA staff through the mechanism of the Joint Negotiation and Consultation Committee (JNCC) in partnership with UNISON.

Scottish Government Sponsor.

The current gender profile of staff within the Radioactive Substances Unit would result in the pay supplement applying to a slightly greater proportion of male employees, in comparison to the roles rated as equivalent within each affected pay band for SEPA as a whole. However, it should be noted that several female employees within the Rad Subs Unit are currently paid lower than male colleagues (due to length of service) and therefore the increase proposed in salary will be of greater benefit to those female employees. 

Equal Pay Impact 

Whilst a ‘level 2’ payment increases the overall salary package for qualifying recipients for a period of up to three years and regularly reviewed. The proposed difference in pay is presented as a genuine material factor, which is not related to the sex of the jobholders in reference to the Equal Pay legislation. There is a gender mix internally within the team and this is presented in comparison to the overall gender mix within each pay band. 

There are minor gender pay impacts with the one notable movement in favour of male employees at Band B, where a cautionary pay gap is created by the application of a Level 3 payment to Band A equivalence for one male employee. However, it should be noted that for Band C and D roles the impact is negligible.    

Whilst the data indicates a minor negative movement in the overall pay gap position in favour of the male profile at pay band B level, the genuine material factors as presented in the business case and expanded further in the internal business case are of great significance.  Clearly equal pay risks in such situations cannot be reduced to zero.  

The Pay Supplement Policy requires a detailed business case to be submitted by what is termed the ‘Responsible Officer’ (RP) related to the case. This would normally be the Chief Officer of the portfolio in which the role is placed. As part of this business case, considerations of Equal Pay are central. Each case for the introduction or review of a pay supplement is required to include an assurance that so far as possible, any possible equal pay issues have been considered. Within the policy the ‘Responsible Person’ must keep a detailed record with robust evidence in support the justification of introducing a pay supplement. SEPA as a public sector body monitors and reports gender pay gap statistics as part of our Public Sector Equality duties and the impact of any pay supplements will be considered in this context.

The Pay Supplement Policy contains detailed guidance for the submission of evidence in support of the case and includes the following statements in relation to Equal Pay considerations:

Equal Pay

In order to protect SEPA against equal pay claims it is important that there is robust and up to date evidence to support any pay supplements being applied to qualifying posts.

The Equal Pay Act 1970 gives men and women the right to equal pay for equal work (including work of equal value). Equal pay claims are considered by an employment tribunal. In SEPA, posts which sit within the same pay band are rated as equivalent under the SEPA job evaluation scheme.

An employer can only pay a man more than a woman (or vice versa) for doing equal work where there is a genuine and material reason for doing so that is unrelated to sex. In the case of pay supplements, the difference in remuneration levels have to be justified by demonstrating that ‘market forces’ have created a need to pay an individual or, one group of staff more than others to recruit staff to or retain staff in that post. An employment tribunal would, however, expect such an argument to be supported by detailed documented evidence which demonstrates the state of the market during the period the pay supplement was being paid. The RP is therefore encouraged to make periodic checks of the relevant market during the period which the pay supplement is paid and keep a record of said checks. An employment tribunal will not accept anecdotal or unsubstantiated evidence.

Paying supplements to recruit or retain staff may serve to undermine the principles of equal pay (because it may perpetuate any inherent discrimination in the labour market). Employment tribunals tend to adopt a critical approach to such cases. The RP must, therefore, keep a detailed record with robust evidence in support of such a practice. In the event of an equal pay challenge, the RP may be required to appear as a witness at an employment tribunal to defend the case for awarding pay supplements to qualifying roles.

The consequences for an employer of losing an equal pay challenge are considerable. In addition to the negative publicity which such a case would attract there can be significant cost implications. An individual who succeeds in a claim for equal pay is entitled to equalisation of their terms and conditions and compensation consisting of arrears of pay (up to a maximum of 5 years). Furthermore, losing an equal pay case could impact on the pay of other staff in the same pay band throughout the whole of SEPA. Further, a successful case may also prompt additional equal pay claims.

In support of SEPAs commitment to equal pay, it is a requirement that those involved in making decisions about pay and benefits are provided with training and guidance.

All awarded pay supplements are applied for a period of up to three years and subject to review as required but at least annually. There are notice periods within the pay supplement policy for an increase, decrease or removal of pay supplement allowance subject to the maximum amount available to be awarded.

Pay data from the corporate Agresso system as at March 2023.

Option 1: No major change

Your assessment demonstrates that the policy or practice is robust. The evidence shows no potential for:

• Less favourable treatment of particular groups, indirect discrimination, victimisation, harassment, and that you have taken all opportunities to advance equality of opportunity and foster good relations; nor
• Restriction of Convention rights or freedoms.

The policy or practice builds in reasonable adjustments where these may be needed. In reaching this conclusion, you should document the reasons why and the evidence used to support your decision.

Option 2: Adjust the policy / practice

This involves taking steps to:

• Remove barriers, to better advance equality or to foster good relations; and
• To minimise any restriction of Convention rights or freedoms.

It may be possible to remove or change the aspect of the policy that creates any negative or unwanted impact. You should describe additional measures which could be taken to reduce or mitigate any potential negative impact.

Option 3: Continue the policy / practice

This means that you adopt or continue with the policy, despite the potential for adverse impact. You should clearly set out the justifications for doing this, and how you believe that decision is compatible with SEPA's obligations under:

• The Public Sector Equality Duty; and
• The Human Rights Act.

Where you believe indirect discrimination is not unlawful because it is "objectively justified" please record what the objective justification is for continuing the policy / practice, and how you reached this decision.

Option 4: Stop and remove the policy / practice

If there are adverse effects that are not justified and cannot be mitigated, you should consider stopping the policy altogether. If a policy leads to: (a) unlawful discrimination or (b) a significant restriction of Convention rights or freedoms it should be removed or changed.

Option 1: No major change

Your assessment demonstrates that the policy or practice is robust. The evidence shows no potential for:

• Less favourable treatment of particular groups, indirect discrimination, victimisation, harassment, and that you have taken all opportunities to advance equality of opportunity and foster good relations; nor
• Restriction of Convention rights or freedoms.

The policy or practice builds in reasonable adjustments where these may be needed. In reaching this conclusion, you should document the reasons why and the evidence used to support your decision.

The Equality and Human Rights Impact Assessment is a living document and should be reviewed and updated to ensure you have captured the changes that have been made because of the implementation of your policy or practice. Set a realistic goal for you to check back in with your assessment, to see if things are going the way you expected.

31 March 2026

05 March 2024

Yes