UUK appears to be acting in breach of their duty of good faith
UCU’s suggestion that employers pay 23.7% of salary from April — an increase of 2.3% and over £200 million more a year — rising to 25.2% next year, is far beyond the mandate employers have given Universities UK. No employer has agreed to pay such high costs… The union’s proposal does not appear to be a serious attempt to reach agreement as it doesn’t reflect the views employers have expressed in consultations.
However, in making our proposals, UCU took the following seriously, which we assumed to be sincere, when UUK wrote that:
the scheme’s members can make their voices heard through the current consultation, which could result in changes to the employers’ proposal. We want to hear from the silent majority and are encouraging them to respond before the deadline on 17 January 2022.
…[UCU] are calling for another valuation and want scheme members to pay in 11% of salary while this takes place, up from 9.8%. To our understanding they have not consulted their members, or the wider scheme membership, on their appetite for increased contributions, so this is a significant and untested assumption.
Both because employers had informed UCU that they would refuse to negotiate with us until after the close of the consultation, and because we wanted our proposals to be informed by member responses to the consultation, we waited until after the consultation had closed on the 17th of January, and we had received a report on the responses, before we issued our proposals. UUK and UCU received these reports from USS on the 21st and the 24th of January. In the light of them, we swiftly issued our proposals on the 26th.
Members were consulted on whether they would prefer an increase in contributions to retain their current benefits to the pension cuts that UUK had proposed. They were asked to rank their preference for the former or the latter. Members expressed a clear and strong preference for the former over the latter. As UCU’s General Secretary Jo Grady has written [UPDATE: see this new blog post for confirmation of UCU’s understanding of the consultation responses ]:
UCU understands that USS’s consultation on UUK’s proposed benefit changes
provides clear evidence that scheme members want to see their benefits protected and by a significant margin would support increases in contributions to help achieve that.
UCU’s proposals outlined above would deliver on the wishes of a majority of
scheme members who responded to USS’s consultation. For a short time,
employers and scheme members would see a relatively small uplift to their
contributions, which would protect benefits until a new, moderately prudent and evidence-based valuation could be implemented.
We now learn that even such limited travel up the contribution steps — with mitigation measures in place — of an option on which we thought members were being consulted in good faith, is deemed unacceptable to UUK.
Why did UUK bother to consult members on their preference for higher contributions versus cuts to benefits if they had already come to the predetermined conclusion that they would reject, as contrary to the views they had expressed in consultations, any such call to retain current benefits, no matter if by a clear majority and by a large margin?
We now learn that UUK’s encouragement of members to respond to the consultation — combined with their claims that they wanted to learn of member appetite for higher contributions, as their responses might make a difference — were not advanced in good faith.
It is improper to prejudge the outcome of the consultation. Otherwise the consultation becomes meaningless and in breach of the employer’s implied duty of mutual trust and confidence. See final bullet point of para 430 of IBM v Dalgleish, which refers to the Occupational Pension Schemes’ Consultation Regulations to which UUK and USS are also bound: