Councils in the UK are facing compensation bills running into billions of pounds over equal pay claims, campaigners have warned, as they called on the government to intervene.
The GMB union is supporting more than 3,000 equal pay claims against Birmingham city council, and has disputes against councils in Coventry, Westmorland, Cumberland, Glasgow, Dundee and Fife.
They are gathering evidence in at least 20 other councils, and said “everywhere we are looking, we are finding issues”.
“It is not for other councils to think that Birmingham is the exception,” said the GMB organiser Rhea Wolfson. “Birmingham has been exceptionally bad in how they have handled equal pay in the past, but other councils need to be learning the lessons and learning them urgently. There are bad practices everywhere.
“This problem is huge and there needs to be a conversation with central government about how they’re going to deal with it, because leaving it up to local authorities is not a sustainable answer. This is going to cost billions, many billions.”
Councils aren’t the only ones affected either, with 20,000 GMB members currently suing Asda for equal pay. Asda is defending the claim.
Wolfson suggested a strike could be on the cards in Birmingham if negotiations develop in a similar way to a long-running equal pay dispute in Glasgow.
About 8,000 women working in home care, schools and nurseries, cleaning and catering services in the city went on strike before the council agreed to pay out £770m in compensation. They sold council assets, including Glasgow’s Kelvingrove Museum and Art Galleries, to fund it.
“Birmingham have not paid out any of this money yet,” said Wolfson. “They continue to withhold these wages from women workers – they are still sitting on the £750m that allegedly may bankrupt them, and it’s women workers that are being robbed every single minute of every single day that they go to their work.
“It may well take strike action for the council to take these issues seriously.”
The city council said its current estimated equal pay liability is between £650m and £760m, although council correspondence with the Department for Levelling Up, Housing and Communities suggested it could be as much as £1.15bn.
It was a central reason why the council was forced to issue a 114 notice this week, in effect declaring itself bankrupt.
The problem runs back to the 2000s when a number of equal pay claims were lodged against the council, including a case involving 4,000 female Birmingham city council workers across 49 different jobs who argued they were excluded from bonuses paid to those in traditionally male-dominated jobs such as refuse collectors and road workers.
Then, in 2012, more than 170 former city council employees, including cooks, cleaners, catering and care staff, won an equal pay compensation fight that went all the way to the supreme court.
The result was that women could have their equal pay claims heard in the county court, where there is a six-year deadline from when employment ceased, as opposed to an employment tribunal where the deadline is six months.
Over the next decade the city council paid out more than £1.1bn in equal pay compensation, but trade unions argued they failed to adequately implement a job evaluation scheme that would have rooted out the source of the inequality.
As a result, trade unions claim more equal pay claims have surfaced, and the council leader, John Cotton, said on Tuesday that plans to create a new job evaluation scheme were only submitted last week. The council aims to close off all new equal pay claims by April 2025.
Stefan Cross KC was a leading figure in the original battles for equal pay in Birmingham, including the 2010 tribunal hailed as a “major victory”, and said he has fought cases at 200 different councils.
“I thought these equal pay cases would take five years, and it’s been 20 years. And these issues are going to be around for at least another decade,” he said.
“There’s been nearly £6bn paid out by councils over the last 15 years but it’s been done drip by drip so it doesn’t get national publicity. So we go over and over and over again, one council at a time. They might all be using different tactics but it’s always the same outcome, women getting paid less than men for equivalent jobs.”
Issues that are cropping up across the UK include task and finish practices, where workers can go home early after completing all their work, not being applied fairly, and job evaluations not being maintained and implemented properly leading to inequalities in pay grades.
Cross said the situation in Birmingham has had a such a severe impact as they have “denied the problem”, where other councils have tried to manage the situation.
“They have been hit hard because of their size, and because their pay differential between the men and the women is unusually high,” he said. “But Birmingham was supposed to have sorted out their problems and they settled all of our cases. But they reinstated the discriminatory pay system and that’s why they are now in this mess.”
Birmingham city council said a judge-led inquiry would be commissioned to determine the causes of how its equal pay liability has continued to grow since 2012 and who is accountable.
