Dinner Ladies and Equal Pay

Many local authorities are, rightly, concerned about the need for ensuring that their staff are treated fairly as between each other and that those sectors of their work force which are primarily female are not employed on lower pay and less favourable terms than their male colleagues.

Despite these concerns, the 31 March 2007 deadline (agreed 10 years ago) for equal-pay structures to be put in place has come and gone with reports that many local authorities have failed to meet the deadline for agreement. (The Times reported that less than 20 per cent of all councils had complied - some other estimates are even lower.) Anecdotal evidence suggests that larger authorities and councils in the South of England are more likely to have failed to meet the deadline; some are concerned that deals reached with unions might not protect them against claims from employees who do not accept the negotiated deal. Others are concerned that previously agreed deals have been unpicked because the agreements negotiated with the relevant union do not provide adequate compensation for years of unequal pay (such as in the Allen v GMB case where the tribunal found that the union had indirectly discriminated against some female members by failing to properly explain a deal with their council employer on back pay that protected men’s pay and bonuses more than women’s). There is also understandable concern that awards of compensation for years of unequal pay will be substantial.

Notwithstanding these concerns and despite a number of high profile cases, the flood gates of tribunal claims have not yet been opened. However, the potential costs of ensuring equality of pay might be as high as £5 billion (even conservative estimates put this at £3 billion) and the TUC is calling for central government to provide direct funding to help settle all outstanding pay claims in the public sector.

These concerns have been highlighted by the recent decision of the House of Lords in St Helens Metropolitan Borough Council v Derbyshire and others [2007] UKHL 16.

In order to protect themselves against equal-pay claims, often fuelled by no-win-no-fee funding deals by the employees’ solicitors, prudent employers have taken steps to settle potential claims by reaching a global agreement with the unions, before those claims are issued. Normally this is achieved by the payment of compensation and/or by negotiating new terms of employment and is best effected through an appropriate trade union. Unfortunately, not every employee has capitulated and this was the problem that faced St Helens after they received over 500 equal pay claims brought by female catering staff. Although the majority of the claims were settled, about 40 were not.

These claims proceeded to a tribunal hearing but, before the claims were heard, St Helens wrote to all their catering staff warning that if the hearings went ahead redundancies would be inevitable to fund the increased salaries that would be then necessary. The letter went on to urge the remaining claimants to consider settlement.

The claimants argued that the letters amounted to victimisation under section 4 of the Sex Discrimination Act 1975. Their claims succeeded before the tribunal and in the EAT but were dismissed by the Court of Appeal. Now, on a further appeal to the House of Lords, the original decision has been reinstated, the court finding that the letter, written in the course of litigation, amounted to unlawful discrimination.

All of this only serves to make the task of the public sector employer all the more difficult. Prudence suggests that negotiations through a representative body are the best way forward; however, this does not help where employees who are not represented by a union or where they chose to pursue a claim notwithstanding a settlement with their colleagues. What the St Helens decision does tell us, however, is that any communication from an employer should be neutral and the temptation to point out the potential pit falls that a tribunal victory might cause should be avoided.

If this was not enough, claims under age discrimination legislation have already been commenced against the Prison Service and some central government departments. It seems that local authorities and public sector employees may need to brace themselves against possible future discrimination claims.

Adam Swirsky