Picken/Swanson: The price of equality

Published on Wednesday 11 March 2009 08:58

CITY taxpayers are facing a bill of up to £20 million for a fresh batch of claims by council workers in the long-running equal pay saga.

Thousands of female staff have already made claims against the local authority because they did not receive the same bonuses as male staff in similar jobs.

Now officials are warning there may be further claims worth up to 20m from these workers if they are kept on the previously discriminatory rate while a new council-wide pay system is introduced over the next few years.

It is the latest twist in the drive to put female employees on the same footing as their male counterparts.

After the Equal Pay Act was passed in 1970, some progress was made in giving women a fair deal and in the 1980s there was a major job evaluation scheme in local government which boosted pay for some female-dominated jobs.

The exercise, though, did not take into account the hidden bonuses in some predominantly male jobs, which could add an extra 50 per cent to their basic pay.

However, in 1999 a "single status" agreement was signed in Scotland to end the traditional divide between blue and white-collar workers and move council employees on to a harmonised set of terms and conditions and "equality-proofed" pay systems based on a fresh job evaluation scheme.

Before local authorities were able to implement new structures, they were forced to make compensation deals with employees for back-dated pay of up to five years.

Councils failed to meet the 2004 target for implementation of single status – and Edinburgh is among a small group of authorities which still has not implemented it.

The NHS has been going through a similar exercise, known as Agenda for Change, but unlike local authorities, health boards have been promised extra funding from central government to foot the bill.

Councils say financial pressures are one reason why they have not yet been able to put the new pay equality arrangements into effect.

The issue was being discussed today at the Scottish Parliament's local government committee, where Unison will appeal for someone to "get a grip" on the situation.

The union's Glyn Hawker says: "I don't believe anyone in local authorities or the Scottish Government has a full understanding of how big an issue this is."

It has been estimated the introduction of single status could cost councils as much as 500m across Scotland, and possibly as much again.

This is a result of a court ruling that schemes offering transitional pay protection to higher-paid, often male, workers were unlawful, opening the door to thousands of low-paid women working in the public sector pursuing claims for extra money.

In Edinburgh, single status will see the maze of different pay scales at the council replaced with a fairer scheme, which will cost taxpayers an additional 10m a year in wages.

City leaders want to freeze current pay levels while the new scheme is introduced and offer compensation to those who will temporarily stay on the discriminatory rates.

Officials have warned, however, that many workers will take further legal action instead of accepting the compensation offers.

Around half of the 34m set aside by city leaders for equal pay claims has been spent.

Union leaders say the council has not put aside enough money to pay for the equal pay claims and changes to its wage structure.

John Stevenson, Unison branch president at the city council, says: "They have come up with quite a few things recently but we have still to see the final offer and be convinced that it has been equality-proofed.

"We need to make sure it can be a legally binding offer before we even think about putting it to our members.

"One thing for sure is that they are not putting enough money aside for this. Other local authorities in Scotland are putting aside five or seven per cent of the wage bill, but Edinburgh is trying to do it on the cheap with three per cent.

"This won't be sufficient and there is still a long way to go – which is something the council could have avoided if it had addressed this years ago, as it was supposed to."

Council chiefs claim a new pay structure for the authority's 17,000 staff will see around 90 per cent of workers have their pay increased.

The other ten per cent of staff will lose pay, following the three-year pay protection period.

City Tory finance spokesman Cameron Rose says: "Some money has been set aside but we still have some uncertainty over how much will be claimed through the courts.

"What we have here is a legal quagmire and the underlying factor in all of this is the mess of employment legislation.

"This is what small businesses are telling me in my ward and it equally applies to the public sector.

"This situation taps into the wider problem that equal pay laws are past their sell-by date and a simplification is well overdue."

In Edinburgh there have been both private and union legal actions against the council over equal pay, as well as protracted negotiations for those not going through the courts.

Unison was today urging MSPs to press Finance Secretary John Swinney to reconsider the funding needed to close the pay gap and allow councils to offset their equal pay costs against the efficiency savings demanded by the Scottish Government.

City finance convener Councillor Gordon Mackenzie defends the council's proposed package of freezing pay as part of the transition.

He says: "We have made provision for the costs as we know them; any additional costs will have to be met through further efficiency savings.

"Central to our approach is the issue of affordability.

"That has been recognised, in earlier cases, as part of what should determine the level of settlement."