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Equal pay claim costs Birmingham City Council £3bn

Birmingham City Council is facing a bill of some £3bn after an employment tribunal ruled against it in an equal pay case.

The tribunal heard how a variety of female employees, which included lollipop ladies, care assistants, cooks and cleaners, had, up until 2007, missed out on bonuses worth up to 160% of their basic salary. They failed to receive the extra pay made up by bonuses despite being on the same pay grade as their male colleagues who worked as bin men, street sweepers and grave diggers.

The council will now have to find £615mn to settle the claims although the figure could rise to £3bn if a further 20,000 take their claims to court, which according to solicitor Paul Savage of Stefan Cross Solicitors says is not inconceivable. The firm calculated that the average payout would be in the region of £134,000.

The huge payout has caused friction in the political arena as the council looks at ways of paying the huge bill, and the parties continue to blame one another for the situation.

Labour’s Sir Albert Bore claimed the city’s ruling Conservative-Liberal Democrat coalition could have solved the equal pay row without the need for a hearing if council leaders had been prepared to negotiate with the unions.

Sir Albert said: ‘I am appalled at the atrocious waste of taxpayers’ money that the coalition has incurred by their actions in this case.

‘This has been a complete waste of public money that could have been avoided if they had listened to us from the outset when we warned against this happening.’

The GMB union agreed and its spokesman argued that: ‘we have tried to make the Tories and Liberal Democrats see sense and not waste public funds but the council insisted on pushing this to the courts.’

But the Tory equalities and human resources cabinet member Alan Rudge, laid the blame with the Labour administration who were in charge of the council from the mid 1980s to 2004. He said they were responsible for the crisis by approving ‘illegal’ bonus payments.

He insisted the situation ended in 2007 as a result of action that they took Cllr Rudge 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issue that was considered by the employment tribunal relates to the old pay and grading structure, in particular the outdated bonus systems.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 Opportunities Commission’s equality guidelines and was endorsed through an independent external audit.’

The council is considering whether it should appeal.
18/05/2010