From here to equality

Equal pay claims will continue to haunt local authorities in the next two years, writes Neasa MacErlean

Equal Pay has been running as a live issue in local government for more than 30 years but it has not lost its power to sting. In Leeds 500 bin staff and street cleaners went on strike in September, ready to tough it out beyond Christmas if necessary. Strike action is on the agenda in Sheffield. Birmingham is currently at the employment tribunal, in hearings expected to last six weeks, brought by about 4,000 mainly female staff.

Many other local authorities will be wondering what 2010 will bring them. Despite the fact that about 170,000 equal pay cases have been accepted for hearing at employment tribunals since April 2006, employment lawyers think the flames have higher to go.

“I don’t think we’ve reached the peak of that yet,” says Mark Greenburgh, head of local government at Wragge & Co. And Julie Morris, employment partner at Russell Jones & Walker, explains how these claims began in Newcastle and other northern locations, adding: “It will eventually spread across the country.”

On the other hand, the Local Government Association (LGA) is trying to strike a note of some optimism. It estimates that about two-thirds of councils in England and Wales have completed equal pay reviews of their workforces or are near completion of them. The LGA does not say that the end is in sight, but it does claim that progress is being made.  

“Local authorities have pioneered the process,” says a spokesman, referring to the way that councils have gone ahead of the private sector in conducting equal pay audits. “And they are not stepping back.” The LGA estimates that equal pay will add £1.5bn to the wages bill going forward, and another £1bn going back.

The recession piles on the pressure

Since the Single Status Agreement of 1995, some councils have been very serious about getting these issues sorted out. Some – particularly those, like Surrey County Council, which were quick off the mark and those with positive industrial relations – have largely resolved the problems that dogged this area of pay discrimination.  

But those that put it on the long finger have now been overtaken by the recession and a string of difficult court judgements. “The Court of Appeal decision in Wilson v Health and Safety Executive has just poured a large bucket of cold water over incremental pay policies,” says Greenburgh. “All the usual routes making up workforce relations in local authorities have been kicked away by the courts.”

Now that the credit crunch and recession have arrived and the financial prospects going forward are even worse, money for settlements and negotiations is in short supply. Even if they wanted to, few councils could settle equal pay claims by “levelling up”, bringing the pay of the lower-paid up to match the higher paid. Leeds has got into trouble with the unions because it is trying to level down.

The GMB union’s Leeds organiser Desiree Risebury believes that other councils which follow the Leeds levelling down route will “definitely” get the same response of industrial action. Her main point is a moral, not legal, one. She says: “The most moral way to do that [equalise pay] is to raise the wages of the women, not to lower the wages of the men.”

A question of balance

In this almost impossible climate, Greenburgh gives councils the only advice he can: “Councils have to go through a balancing exercise”. They have to weigh up the rights of taxpayers and employees and try to find a compromise between them. Some kinds of modernisation are highly advisable – going onto seven-day weeks, for instance, so that staff no longer get double pay for Sundays. And it is absolutely essential, he says, that top management is involved in undertaking and making these negotiations and compromises.

But councils do get through even the worst situations. Newcastle City Council was one of the first to be targeted by “no-win no-fee” solicitors bringing employment tribunal claims. When it implemented Single Status for half its staff (about 5,500 of its total of 11,000) in 2004, it ended up paying out £17 million in tribunal settlements to 2,300 workers. It is just about to implement Single Status for the remaining 5,500 staff – quite likely  before Christmas.  Michael Hopwood, Assistant Head of Organisational Development, will not rule out tribunal claims – “Anything is possible” – but thinks they are much less likely this time.

For a start, the demographics of these employees is different. He says: “Because we are dealing with a single structure workforce that is quite well populated with men and women, the ability of individuals to say there is definitely something there tainted by gender is much less.” And this time around, unlike last time, Newcastle has done considerable equality assessment analysis – so it knows precisely the gender breakdown of all the different groups of people getting regrades or falling into any category whatsoever.

But if staff do have “open and shut” cases of discrimination, Hopwood suggests settling. In fact, equal pay cases have the highest rate of withdrawal (which often means settlement) and ACAS settlement (about 79 per cent between them since April, according to provisional tribunal figures) and the lowest rate of success (2 per cent) in front of the tribunal, of all types of tribunal cases.

Due south

Newcastle-based Shirley Wright, Eversheds partner in charge of equal pay issues, is seeing employment tribunal claims spreading south. Many of these claims are being brought by unions, she says. They have been stung into action by members who were angry that they initially did so little in this area.  

But a problem in the south, says Wright, could be a lack of supporting evidence for councils. “Particularly in the south, they have had a lot of turnover [of human resources staff] so they don’t have many people with a lot of historical knowledge.” And if they have no evidence as to why they have particular pay structures, they start off in a very weak position on an equal pay claim.

Graham White was HR head at Surrey when it sorted out its equal pay issues, and he is now completing the process at Westminster City Council.  He has three bits of advice for councils with difficulties: “Start fixing it now. Engage with the unions. Stop banking problems.”  

Neasa McErlean is a freelance journalist