Equal pay in Birmingham - a mixed blessing?

Birmingham City Council is found guilty of gender pay discrimination. But who's going to foot the bill?

by
Last Updated: 31 Aug 2010

On the face of it, this week's tribunal ruling against Birmingham City Council - in a case brought by the unions, it was found guilty of systematically under-paying its female staff by depriving them of certain bonuses - is a triumph both for gender equality in the workplace, and for pay restraint in the public sector. As local authorities prepare to wield the budgetary axe, it's a timely reminder that there’s no excuse for corner-cutting: men and women doing the same job should be paid the same salary, end of story. And some of the stories about the council's bonus schemes really do beggar belief. On the other hand, if women can now claim up to £600m in compensation, as lawyers suggest, where’s this money going to come from?

The tribunal ruled that some of the council's female workers (e.g. cleaners and care assistants) were excluded from bonus schemes open to male workers - which in some cases allowed them to massively inflate their basic salaries. According to the Times, one electrician was able to claim more than £90,000 in overtime, back-pay and allowances on top of his £30k+ salary, while there were binmen earning the best part of £50k a year. Not only were these salaries ridiculous in themselves, they also applied almost exclusively to traditionally male jobs. The tribunal decided this was unfair – which means, according to the unions, that the women concerned may now be able to claim up to £30m in back-pay (or £600m, if you ask the lawyers).

For its part, the council argued that it changed its policy back in 2007, and is now acting in accordance with discrimination rules. But the tribunal wasn't buying it; the council didn’t just lose the case, it was also accused of acting unreasonably by contesting it (and wasting millions of pounds of taxpayers' money in the process). Naturally, the unions are cock-a-hoop – though some critics argue that they should have been fighting for gender pay equality a whole lot sooner than they did…

This case isn't without its difficulties. It basically rests on the tribunal's view that certain types of manual work mostly done by women (e.g. teaching assistants) are equivalent to jobs mostly done by men (e.g. binmen) and so should receive precisely the same pay, at a level set by the council (as opposed to the market). Not everyone will necessarily agree with that. Equally, there's an argument that no public sector workers should be getting pay deals like this - we should be talking about cutting men's pay and meeting somewhere in the middle, rather than just raising women's pay to the same level.

But the biggest problem, in practical terms, is that the council can’t afford £30m, let alone £600m – certainly not without painful cuts to staffing and front-line services. So they’ll fight this tooth and nail; and if they have to pay up, local residents and female workers will inevitably suffer. This may be the right outcome in principle, but the result is likely to be a great deal of pain all round.


In today's bulletin:

Will 10% house price jump boost Gordon Brown in leaders' debate?
Argos vulnerable after 11% dive in profits?
John Vincent: Does the 'bigot' comment matter?
Private sector will prop up the job market, says CIPD
Equal pay in Birmingham - a mixed blessing?

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events

Subscribe

Get your essential reading delivered. Subscribe to Management Today