Equal pay row about to explode

The mounting problem of securing equal pay for women in local government was brought into sharp focus last month with the publication of a Local Government Employers (LGE) report.

The Unblocking the Route to Equal Pay in Local Government report laid bare how complex the issue has become and revealed a looming cash crisis, running into billions of pounds, facing authorities yet to resolve the problem.

At the heart of the current predicament is the single-status agreement signed by local government employers and national trade unions almost a decade ago. This deal sought to end an unfair pay system that favoured male workers by compelling employers to implement a common pay scale for all jobs, and harmonise conditions based on equal pay and equal status for part-time staff.

Large settlement costs

But with an agreed deadline of 31 March 2007 pending, the LGE has admitted that only one-third of authorities have so far put these new structures in place. In addition, those councils yet to complete the exercise are facing much larger potential settlement costs than previously anticipated – money councils just haven’t got.

According to the LGE, new equality-proofed pay structures will mean a 5% average permanent increase in wage bills and estimated liabilities across all authorities of up to £5bn.

Stephen Moir, reward specialist at the PPMA (Public sector People Managers’ Association – formerly Socpo) said the worst case scenario would see local authorities selling off valuable assets, such as buildings and land, or increasing council tax and cutting jobs to meet the bill.

That is unless central government relaxes rules on how local authorities can spread their costs, or comes up with financial assistance, as it did when driving the Agenda for Change pay initiative through the NHS.

“Some local authorities are struggling under huge financial pressure, and central government needs to be more pragmatic in its approach,” said Moir.

The government has responded by saying local authorities are working to a timetable they themselves agreed with the unions, and there has been plenty of time to organise how to manage costs. As for potential job cuts, a spokesman for the Department for Communities and Local Government said: “Employers will have to make hard choices. Only they know what choices and priorities fall above or below any necessary pay reforms.”

Slow off the mark

At the GMB union, national secretary Brian Strutton said employers had been slow in bringing equal pay to local government for a number of reasons.

He said authorities had been waylaid by other initiatives, such as outsourcing or restructuring, while in some of the larger authorities, the task of implementing a common grading structure across all jobs had simply been too daunting.

“In some cases, equal pay has been put in the ‘too difficult’ box, but it’s now a massive problem and piling up,” said Strutton.

GMB representatives were negotiating on behalf of thousands of female staff in local government throughout the UK to secure back-pay settlements and to ensure equal pay going forward. The union was also pushing for litigation in a growing number of cases, he said.

In competition

But increasingly, the unions have found themselves competing with a handful of independent solicitors who are taking on the claims of individuals, accusing local authorities of holding back money that is due to female employees and the unions of selling these workers out.

By far the most active lawyer in this area is Stefan Cross, an ex-GMB adviser and union solicitor who has represented groups of employees in the North East and Scotland.

“Deals are being negotiated between male union reps and male employers, and female workers are being kept in the dark,” said Cross. “Women have been discriminated against for 30 years and these people are only interested in maintaining the status quo.”

However, Strutton argued that the unions were working to secure a wide-ranging package for female staff.

Both men are eagerly awaiting the results of a GMB appeal of an employment tribunal finding in June, which may have important implications for further union negotiations with local government employers in the future.

The original Allan v GMB case (see below) found the union had indirectly discriminated against a number of female staff in Middlesbrough by rushing into a deal on back pay with the local authority. The 54 women have demanded £1m compensation.

The Allan v GMB case

Allan v GMB was brought as a sex discrimination case in June by an employee of Middlesbrough council, and not as an equal pay case. The tribunal held that the GMB did indirectly discriminate against its female members by placing more attention on pay protection for men than on rightful back pay for women.

A determining factor against the GMB was the “way in which the back-pay offer has been sold to the membership”.

The tribunal listed the factors the GMB should have explained to its members:

a) that the deal on offer was substantially less than they were likely to receive if they were successful before an employment tribunal

b) that part of the reason they were being asked to accept a smaller figure was so that funds could be used to protect the pay of losers in the job evaluation scheme, including male bonus earners.

The GMB appealed against the decision.

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