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St Helens Council could face staggering £70million equal pay bill
11:00am Thursday 15th November 2012 in News
ST HELENS Council could be forced to settle a £70 million equal pay compensation bill after an employment judge ruled in favour of unions representing more than 1,000 workers.
Many of the claimants are in line to receive considerable compensation following a reserved judgement delivered after a pre-hearing review in Liverpool.
They include local authority employees ranging from cooks and cleaners to clerical staff, classroom assistants, caretakers and technicians.
According to a senior council source the cash-strapped local authority – which is already dealing with £50m budget cuts – will mount an appeal in an effort to overturn the judgement.
However, if it is unsuccessful it may have to apply to central government for loans or sell off land or property assets to raise revenue.
Steve Fay, from the St Helens branch of Unison, said: “This is a great result for our members. The council failed to establish a defence against (accusations of) discriminatory action.
“There is also a long way to go to determine what may actually be paid to each individual (and) we understand that the council may exercise a right of appeal.”
A written judgment seen by the Star, states Unison and GMB brought the equal pay claim after Town Hall managers “protected” higher earnings of employees, such as bin men and street cleaners, between 2000 and 2008.
Workers in other roles, in jobs that were classed as being of equivalent value, were on the same salary grades but were getting paid less money.
The ‘payment protection’ effectively kept in place a bonus or additional payment that workers, such as bin men, had been receiving historically.
Documents from the tribunal stated that in 2004, the council decided to protect the earnings of the bin men rather than reduce them to the rate at which they had been assessed during a wide ranging review of pay grades.
According to the ruling, it was intended that, in the course of the “pay protection period” the bin men would not receive cost of living allowance, to erode the pay difference.
However, this did not happen and the basic pay increased in line with cost of living increases, though the “consolidated bonus” did not rise.
The council conceded that pay arrangements in place were tainted by gender but argued there was justification for its decision.
The council claimed that levelling up (increasing the claimants’ wages) would have cost £70m, arguing an “unaffordable” move would have left it unable to deliver satisfactory services.
There, were other routes available, however, one of which included finding a middle ground of earnings by increasing the wages of the lower earners and dropping pay of higher earners.
An employment judge ruled that the council, which had known about the discriminatory pay in 2000, could not justify the entire overpayment for such a lengthy period.
The judge concluded the council had not “adopted proportionate means of achieving their legitimate aim”.
Asked about the judgment and the potential liabilities it faces, St Helens Council issued a statement which read: "The council is considering its legal position in response to the judgement - and it would be inappropriate to comment in any detail at this stage.
“However we can confirm that the council received an adverse judgement in a pre-hearing review. This process however, does not award financial settlements.”