03 August 2007
The Local Government Employers organisation has issued an urgent notice warning councils to resume meaningful negotiations with unions or risk expensive litigation over a potential £5bn gender pay gap.
The LGE's move follows the Employment Appeal Tribunal ruling on July 31, overturning a June 2006 judgment that put progress on equal pay on hold for more than a year.
The EAT ruled that, contrary to the 2006 judgment, the GMB union acted fairly in balancing the rights of its underpaid female members at Middlesbrough council against its desire to also protect male staff who would otherwise suffer a pay cut under a new, equal pay scale.
But the LGE advisory note, issued on August 2, warns: 'It is apparent that if authorities either stall in beginning discussions with the trade unions, or if the discussions are not considered by the unions to be meaningful or have no real prospect of leading to an acceptable settlement, then the unions will have no option but to begin legal proceedings and submit multiple equal pay claims on behalf of their members.'
The note went on to say: 'Meaningful negotiations must begin in earnest at the earliest opportunity and progress towards a negotiated settlement should be given priority.'
Brian Strutton, the GMB's national secretary, told Public Finance that local authorities had used the initial 2006 judgment to 'stall' negotiations on implementing the single status pay agreement, under which female council workers would be entitled to the same pay and conditions as men.
The agreed deadline for implementation passed in April this year and was missed by two-thirds of councils. But Strutton said: 'We hope the appeal judgment will change the attitude of the employers, who will hopefully now be less reluctant to reach agreements with us and more inclined to introduce proper equal pay on a collective footing without worrying about litigation.'
But John Sutcliffe, principal strategy adviser at the LGE, denied that councils were responsible for stalling progress. He claimed that the unions had adopted an 'overly risk-averse' approach, which meant a number of deals had been on the table for up to a year and not yet signed off.
Sutcliffe warned that some authorities were now 'threatening to pull the plug' on those deals, as they urgently needed to sign them off in order to settle their budgets. He added that a number of them might now have to be reviewed and adjusted anyway, as the year's delay had meant extra pay costs for the councils that were not factored into the original offers.
'They will now have to find ways to dip into their contingencies or find other ways of balancing that extra cost before introducing new structures,' he said. 'It won't be drastic changes… the spirit of the agreements will be adhered to, but there may be some further awkward moments.'
He said that a number of councils had earmarked October for implementation of offers already put to the unions.
The LGE is also set to call for the new Commission for Equalities and Human Rights to draw up a code of practice for dealing with equal pay claims across the public sector and for balancing the competing demands of those who have been ostensibly overpaid with those who have been underpaid
'We need a shared idea of what the best way forward on this is,' Sutcliffe said.
But unions and employers are agreed that councils do not have sufficient funds to implement equal pay properly. If female council workers claimed their full entitlement to six years' back pay the cost could be as high as £5bn, said Sutcliffe. Yet councils had only had 'modest success' in convincing the Treasury to lift last year's £200m cap on the amount councils can borrow to fund equal pay.
That did not mean there would be no cap, said Sutcliffe, just that the Treasury would set the cap after all the bids for borrowing had been submitted.
PFaug2007
