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Future-proofing independent schools | Increased TPS costs and changing teachers’ contracts
Written by Jane Hallas on 13 February 2024
2024 is now well underway, and the independent school sector is facing real challenges. One of the most pressing of these is the forthcoming increase in pension contribution costs for teachers in the Teachers’ Pension Scheme (TPS).
Alongside this, many independent schools are also very concerned about the potential for VAT to be added to school fees if there is a change to a Labour government. For those that are reliant on middle-income earners to send their children to them (as opposed to the very wealthy, largely recession-proof families), there is the added risk that such families may decide they cannot afford to pay for their child’s education.
As a consequence, many governing bodies in the independent sector are wondering what to do next to future-proof their schools. Should they come out of TPS altogether? Look at a hybrid arrangement whereby they close entry to all new teachers but retain it for existing teachers, which could run the risk of indirect age discrimination claims? Allow staff to stay in the TPS but with the proviso that they cannot pay any further pay rises or a reduced rate?
Whichever option you are considering, it’s important to consider the risks as well as the benefits of each approach, as these decisions will undoubtedly impact your strategy for the next few years.
Changing contractual terms
From a purely legal perspective, any change to contractual terms will necessitate agreement with individual employees. It’s highly unlikely that staff will readily accept a change to what many consider the most valuable ‘perk’ of being a teacher, aside from holidays. As such, schools must carefully consider how best to approach such a situation and be forewarned about the likely scenarios that may play out.
If it looks likely that you will have to dismiss and re-engage on new terms 20 or more employees, collective consultation will apply. Collective consultation is with elected representatives if there is no recognised trade union. Such consultation has to be “meaningful” and start at the earliest opportunity before plans are finalised and decisions made.
The law also lays down quite prescriptive requirements relating to the election process, provision of information, and consultation with representatives. Failure to do so can lead to claims for protective awards for up to 90 days of full pay for each affected employee.
If agreement cannot be reached, then individual consultation will need to take place before an employee is then dismissed with notice and offered re-engagement on the new terms. As many teachers’ contracts require notice to be given before the start of the next term, expiring at the end of the next term, the time pressures on schools can be immense.
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Union involvement
All of this can present real difficulties to those in the independent sector who have traditionally worked in a collegiate and collaborative way with staff, without the need for trade unions. However, the very act of proposing to change terms is likely to have staff contacting their unions about their concerns or the unions sensing fertile recruiting grounds and trying to increase their numbers by promising to help staff fight such proposals. Even without union involvement, staff will naturally feel dispirited and demotivated about such proposals.
We are seeing increasing union activity in the independent sector, with unions attempting to get involved even though there is no recognition agreement in place. We hear on the grapevine that union activity typically will involve:
- Promises of free or discounted membership if staff join them;
- Promises from some unions to cover any loss of earnings if they take part in industrial action;
- Approaches to the school to see if they will enter into voluntary recognition agreements and threats that they will apply for compulsory recognition if not; and
- An indicative vote from staff regarding industrial action if the school is looking to change terms around the TPS.
This is then normally followed with a sample ballot paper and a vote for industrial action. Any industrial action is then delayed whilst the union tries to get around the negotiating table with the school but with the threat of industrial action hanging over the school.
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Specialist support for schools
Should your school be contemplating making such changes, WorkNest’s Employment Law experts can advise and assist you, ensuring your school is well-equipped to navigate the legal complexities involved and make informed decisions that align with your long-term strategy.
For support from our specialist Education Team, call us on 0345 226 8393 or request your free consultation using the button below.
