Birmingham loses “£200m” equal pay claim

An employment tribunal has ruled in favour of 4000 female employees who claim that Birmingham City Council discriminated against them by not paying them bonuses which were available to male employees, creating a compensation bill which claimant solicitors say will be in excess of £200m.

The 4000 test claimants, who were selected from 49 different job groups within the council and included cleaners, cooks and administrative staff, argued that the council's previous bonus scheme – which was only abolished by the council's Single Status agreement in 2007 – enabled employees in male-dominated roles such as refuse-collecting to be paid an attendance allowance, which was not available to many female staff in different, but similarly-graded, roles at the council. The effect was that some men could earn as much as 160% of the amount paid to women on the same salary grade.

The claimants argued that senior managers at the council were aware of the problem in 2000 and that backdated salary and interest should be calculated from that date. Solicitor Paul Savage of Stefan Cross Solicitors, which represented 900 of the claimants, claimed that based on 4,000 claimants, the council's bill for backdated salary and interest from 2000 would be around £200 million, with the average claim being worth £50,000.  However, the tribunal's ruling potentially enables a further 20,000 female staff to being similar claims, bringing the potential bill to more than £1bn if Savage's figures are correct.

Savage said: “This is a decisive and clear victory and now the city council should start putting together plans to meet its liabilities.

In a statement, Alan Rudge, the cabinet member for equalities and human resources, said: “The issue that was considered by the employment tribunal relates to the old pay and grading structure – in particular the outdated bonus systems.

“In 2007 we took positive action to remove the inappropriate bonus schemes and implemented a revised pay and grading structure, which falls within the Equal Opportunity Commission’s equality guidelines and was endorsed through an independent external audit.

“It is too early to determine financial implications and currently, consideration is being given as to whether there are grounds for appeal on any aspects of the decision.”