Employers primed for pay battle after £300m payout

Employers have been warned they are sitting on a potential equal pay ‘timebomb’ following a landmark decision, which could result in £300m compensation for female NHS workers.

A test case, brought by public service union Unison against North Cumbria Acute NHS Trust, will see payouts to workers estimated to be worth between 35,000 and 250,000 each, it emerged last week.

Andrew Foster, NHS director of HR, denied that discrimination was rife in the service. He told Personnel Today that the Agenda for Change pay system that is being implemented would be pay discrimination-proof.

But Pam Loch, head of the employment team at Fladgate Fielder law firm, said the NHS case would reinforce employer concerns that they may be exposed to equal pay claims.

“Employers could be sitting on a timebomb so they need to be aware of the situation and put in place measures to defend themselves,” she said. “Companies will be in a stronger position if they have conducted an equal pay audit and are confident that any differences in pay are for non-gender specific reasons.”

Duncan Brown, assistant director general of the Chartered Institute of Personnel and Development (CIPD), agreed that employers needed to “sit up and take notice”, particularly as the government is implementing reforms to speed up the passage of such cases in the future.

“It demonstrates the costs of not implementing the kind of root-and-branch reform the NHS has already undertaken to eliminate discrimination in pay structures,” he said.

The latest CIPD research shows that half of the UK’s employers have no intention of carrying out an audit. But both the CIPD and the CBI are against the introduction of mandatory assessments.

For a copy of Personnel Today Management Resources’ One-Stop Guide to Equal Pay Reviews, GO TO www.personneltoday.com/resources 

Road to equality

Equal value claims at the trust were lodged in August 1997 for 14 different jobs, using five different male comparators. The women ranged from nurses to catering assistants, domestics, clerical officers, sewing machine assistants, porters and telephonists. They compared their pay with that of craftsmen/joiners, building labourers/wall washers, works officers, craftsmen supervisors and maintenance assistants.

Under the law, women can claim back-pay for up to six years from the date of lodging a claim, so some of the women will receive up to 14 years worth of compensation. Unison said interest of 50% to 60% will also be paid.

Pay rates, hours, pensions, weekend working rates and sick pay were all included in the comparisons to determine that women were treated unfairly by the old pay system.

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