Public sector unions could be forced to pay millions in compensation after the Court of Appeal ruled that the GMB discriminated against its female members in equal pay negotiations with a council.
As a result of the decision in GMB v Allen, the GMB could face another 4,000 claims for compensation while Unison is facing similar claims from about 7,000 members.
The Court of Appeal ruled that the GMB indirectly discriminated against female workers at Middlesbrough Borough Council because it prioritised pay protection for male members over obtaining favourable back pay for female members.
The decision follows two earlier verdicts on the controversial case.
An employment tribunal originally ruled that the GMB had discriminated against the women, but that decision was overturned at the Employment Appeal Tribunal.
Stephanie Dale, head of employment at law firm Stevens & Bolton, said unions were looking at a “massive” compensation bill.
“Add to the mix, the tribunal’s original criticism over the way in which the GMB had encouraged or ‘manipulated’ and ‘misled’ female members to accept the offer, and this proves to be very bad news all round for the GMB,” Dale said.
The case has also generated controversy as it pitched the GMB union against no-win, no-fee lawyer Stefan Cross – a potential competitor to the union for representing employees.
GMB national secretary Brian Strutton said: “The Court of Appeal has overturned the earlier view that the union’s actions were objectively justified and therefore did not amount to unlawful indirect discrimination. The Court of Appeal has found that the way the union went about getting the balance right between conflicting collective needs and individual rights was not correct.”
The GMB said it would appeal to the House of Lords.