About 2,300 employees at Neath Port Talbot Council are attending “signing days” to receive equal pay payouts at a total cost of £8.8m.
Catering, cleaning and care staff are set to receive up to £7,500 each and are the first local government employees in Wales to be offered equal pay compensation.
The Welsh Assembly Government has given permission for the council to borrow all of this sum to enable it to meet its equal pay liability, with all payments to be made by 31 March 2007.
Graham Jones, the council’s head of strategic personnel, said: “The council has been working for some time with Unsion and the GMB [unions] to reach a negotiated settlement. While excellent progress has been made, the Allan v GMB case has been a major barrier for us to collectively overcome.
“Reluctantly, in the light of the trade unions being unable to recommend acceptance of the negotiated settlement to its members, the council decided to make a settlement offer direct to 2,300 employees”.
Jones said about 95% of staff had accepted an offer of “full and final settlement”.
Council leader Derek Vaughan said: “Neath Port Talbot is one of only two councils in Wales that are making such speedy payments to employees.
“This reflects the very strong relationship locally between the council and the trade unions and also the wishes of both parties to make these payments now rather than the council seeking to defend claims in an employment tribunal over a lengthy period of time.”