My first time
01 April 2019
This article was featured in the April 2019 issue of the magazine.
Mike Nicholas, editor, outlines his first participation in a payroll software implementation project, and recalls two memorable events
Looking back, I realise my first time was an amazing experience.
I begin my account in 1967 when age 16 I started working in the Centralised Payroll Office (CPO) of the Chief Accountant’s Department, Southern Region, British Rail. The CPO was reached via steps and a pathway leading from a gate on platform 8 at Brighton station. The path meandered through the vast goods, carriage and wagon maintenance yard to the east of the station. (This yard has since been demolished and replaced by homes and businesses; and it’s also where the office of The Pensions Regulator is located.) The CPO was in a very large and high-ceilinged shed, which at one time had a track line running into it. In 1968 the CPO relocated to offices in North Street, Brighton (adjacent to the Royal Pavilion gardens), which had been vacated when the Alliance Building Society moved its head office to purpose-built premises in the neighbouring borough of Hove.
I worked on a section of fourteen dealing with the pay of 500 or so train drivers of the central division of the southern region. Much of the work was manual but there was some mechanisation of P11 deduction working sheets and payslip and P14/P60 production (if my memory does not fail me). I recall writing (and rewriting) P14/P60 carbonised sets as late as August annually.
In 1968, I transferred to the payroll section of the Traffic Manager’s Department, East Croydon, manually calculating wages for staff in the offices there plus relief staff. Manually casting and balancing large sheets of columns of amounts all in £sd (pre-decimal) is a great challenging experience: 12 pennies to the shilling, 20 shillings to the pound. (Adding machines were scarce, so my colleagues and I relied mainly on mental arithmetic.)
...the age of the mainframe computer housed in special buildings and environments
In the early 1970s I returned to the CPO office, which had been renamed as the Data Input Centre (DIC) of the Chief Finance Officer’s Department. In due course, payroll processing for all staff working in the central division of the southern region, plus head office staff, would have their pay processed from this office. There were also DICs located in Southampton and Beckenham for the west and east divisions of the region respectively.
The payroll sections in DIC Brighton were located on the fourth floor, with the data recording and verifying (R&V) section on the third floor. There were neither mini computers nor visual display units at the time, as this was still the age of the mainframe computer housed in special buildings and environments. Processing was by ‘batch’ and it was essential that scheduling of work was observed and met even at bank and public holidays including Easter, Christmas and the new year.
BR’s three mainframe computers I recall were located in Crewe, Derby and Doncaster. The data was transmitted to these via telecommunication equipment located in the DICs, using papertape created during the R&V process. The very structured source documents for the data were supplied by the payroll teams. Data input error messages were sent to DICs via teletext machines.
The vast majority of BR staff were paid weekly in cash, on Thursday or Friday. A few were paid four-weekly via automated credits transfer.
Implementation of BR’s national payroll system (NPS) meant standard long, narrow printed payslips replaced handwritten slips. For those paid weekly
a tear-off stub indicating the payment method served as a receipt when collecting their wages. Most weekly-paid employees collected their wages from their workplace, but a few could enter in their weekly timesheet a paypoint code indicating where they wanted to collect their payslip and cash wages on the next payday. Other functionality served to automatically withhold a payslip and the cash to a later payday if the employee was indicated as on holiday for the week in question. The NPS also produced detailed cash analysis requirements based on those being paid on the next payday. Rounding of cash net pay operated to bring the odd pence up to 50p. (A ‘feature’ of the NPS arose when an employee moved onto four-weekly pay frequency: rounding still occurred in the last weekly payment. It was a year or more before this programming ‘feature’ was corrected with recovery of the last rounding amount actioned.)
Initially, those paid four-weekly received a single payslip. Though this was not a problem for many employees, it was difficult to reconcile the values shown in the payslip where the employee had variable hours etc (e.g. frequent overtime, working shifts, paid higher rates for some hours). It made sense therefore to provide four-weekly staff with four adjoined payslips – one for each week.
It is remarkable looking back to think that, for a long time, payroll timesheets, notifications, and payslips were sent in tough bags sealed only with Velcro that anyone could open. These coloured coded bags were conspicuous, but there were many of them in transit between the DICs and the depots and stations every day.
Where weekly-paid staff moved to the four-weekly pay frequency, they would receive in their last weekly payment an advance (a loan) of two weeks’ net pay. This was because it was better the employee received pay for the weeks before the next payday and also because the payroll processing cut-off meant only two weekly timesheets would be included in that next four-weekly calculation. Recovery of the advance was automatically spread over the ensuing thirteen paydays.
...timesheets, notifications, and payslips were sent in tough bags sealed only with Velcro that anyone could open
There were hundreds of voluntary deductions in operation; some were national, some regional or only local in availability or relevance. With computerisation each was allocated a code and operational rules defined e.g. non-payment, accrual and collection of arrears, reducing balances etc. Ledgers that had been maintained at depots and stations for recording contributors, the amounts and frequency, were the source for identifying the weekly amount and deduction code applicable to employees to enter in the NPS record. Sometimes research was undertaken to ensure the right code etc had been used.
Several pension schemes operated. For many years these were available only to salaried staff from age 21 but the British Rail pension scheme which replaced them was open to all staff. It was a condition of employment for employees to be automatically enrolled.
Implementation of BR’s NPS was sensibly spread over many months. This is unsurprising as the implementation teams visiting depots and stations had to train staff, perform checks to ensure accuracy of data, and collect and submit year to date cumulative values for income tax, sickness absences etc. In the DICs it was important the right levels of resource were also available, particularly as some of the staff solely engaged in payroll processing at large stations and depots were scheduled to transfer to the DICs. The planning involved must have been extensive.
The first timesheets for those stations and depots moving onto NPS were subjected to close checking on receipt at the DIC. Any discrepancies would be pursued by the implementation teams, who worked closely with DIC staff.
There were stories of payroll ghosts across BR. The NPS served to exorcise fraud.
Two memorable events
Lost time
For some reason that I cannot recall I worked on the timesheets of relief signalmen. There were only seventy or so of these in the central division, but extending their timesheets took me about a day from late Monday morning. It took this long as the relief signalmen usually worked/claimed long hours and were often entitled to higher rates of pay when working in signal boxes that controlled high levels of train traffic as these required more skill and knowledge. It was also common for these relief signalmen to cover several boxes each week, claiming travel time and/or lodging allowance and expenses. Another aspect of extending these timesheets is that all the correct cost centres had to be located and used.
Over time I acquired knowledge of the relevant rates and cost centres for various boxes, but to apply the correct nationally agreed terms and conditions (e.g. spoilt food allowance, minima for Sunday working, etc) I relied on a handbook published annually by the National Union of Railworkers. There was little in the way of guidance from BR itself. (This was I think a formative first time for me in the comprehension and application of the technicalities of employment rules and law.)
Some but not all of the relief signalmen were paid four-weekly prior to being transferred onto NPS. Historically, some of them had submitted their timesheets for the four weeks together, but though this practice had not previously been an issue it was going to bring to light a ‘feature’ of the NPS that had not previously been encountered.
On receipt of three or more timesheets from a relief signalman in the week of transfer to NPS, it was necessary to extend them all and combine them into a single or multiple timesheet set. However, as part of this it was also necessary to remove from the total payable hours the basic hours for two weeks, which I did. (The NPS would advance the missing two week’s pay – in other words, payment in arrears and for current weeks.) However, inevitably there were some errors (e.g. wrong rate of pay applied), but I recall receiving five queries that substantial underpayments had occurred.
Checking initially a few of these revealed and confirmed that though all the due and payable hours were shown on the payslip, the cash amounts shown for them were considerably lower than they should have been. How could this be, as nothing like this had previously occurred in the implementation?
Using the cash amounts in the payslips I reverse-calculated the hours that had been actually ‘paid’ and established that in each of the five cases there was an underpayment of exactly 166 hours 40 minutes. This is a strange but precise amount, but there is a simple – though not obvious – explanation.
I remember my manager almost joyfully telling me and my colleagues the explanation that he’d obtained from the computer centre. The time ‘lost’ equates to 10,000 minutes (166 × 60 + 40) which is the maximum prescribed in the computer programme as payable for one week’s timesheet. The payable hours from the combined timesheets had breached this amount causing a reset to zero with only the excess actually paid. If you think about it, it would be very unlikely (and very undesirable) that anyone would work every hour of every day in a week: 7 x 24 is 168 hours – so, 10,000 is a reasonable limit.
This was my first encounter and lesson with programming ‘features’, but it served me well in later implementations. Computer ‘mistakes’ are almost always caused by programming.
... in each of the five cases there was an underpayment of exactly 166 hours 40 minutes
Features of 1971 AEOs
My second memorable event occurred when a query fell to me to resolve. An employee at one of the stations had lost a lot of his pay and there seemed no obvious explanation.
I checked his payslip for the current week and noticed a sizeable deduction for an attachment or earnings order (AEO). Searching his personal file revealed it was a priority type AEO made many months previously under the Attachment of Earnings Act 1971. At the time I had no idea what this was.
Working back through the employee’s payslips for quite a few previous weeks I saw that for many of them no deduction had been made. I located the last time a normal deduction had occurred but for several weeks after this no deduction had been made because of the employee’s low earnings due to absence through sickness.
Prompted by this I read the notes accompanying the AEO and then began calculating the effect of low pay for several weeks followed by normal earnings on the person’s return to work. During the period of low pay arrears of protected earnings and the normal deduction had built up, with the former being progressively cleared after the return to work until the point when arrears of normal deduction kicked in with a significant deduction. The deductions were accurate; and if weekly earnings stayed unchanged the arrears would be cleared within two weeks.
All I could do was contact the employee’s manager and explain what had happened. It was up to him to decide whether to make a ‘loan’ to help the employee.
Ever since this particular event I have had a fascination with AEOs whatever shape/form they take.
Your first time
The Editor would be delighted to receive an account of your first time participating in a payroll software implementation project for publication. Please email [email protected].
Some interesting years
1944 – The paper-based pay as you earn system for collecting income tax from employees’ wages begins.
1951 – (1) First sale of commercially available general-purpose computer in UK. (2) UNIVAC introduces the first magnetic tape storage device.
1954 – Lyons Tea Company starts payroll processing on LEO – Lyons Electronic Office – a computer it modelled on the Cambridge University EDSAC (electronic delay storage automatic calculator) computer. Later, LEO was offered as a payroll bureau service.
1956 – (1) Researchers at Massachusetts Institute of Technology experiment with direct keyboard input to computers. (2) IBM (International Business Machines) ships RAMAC 305 computer system based on the new technology of the hard disk drive which is capable of storing about five million characters of data allowing real-time random access to large amounts of data.
1958 – Phone companies develop digital transmission for internal uses – specifically to put more calls on each of the main lines connecting their own switching centres.
1961 – Demonstration of timesharing systems that enable many users to share a computer.
1962 – IBM 1311 disk storage drive with a removable disk pack is announced. Each pack weighed about ten pounds, held six disks, and had a capacity of two million characters.
1968 – The bank automated clearing service (BACS) commences.