MORE than 2,000 female council workers in Northumberland are set for payouts after agreement was finally reached to settle a long-running, £50m equal pay claim.
Women county council employees such as cleaners, kitchen assistants and carers are in line for the compensation payments as a result of being underpaid for years in comparison to male colleagues who earned bonuses.
Northumberland County Council is the last local authority in the North East to settle its equal pay dispute with the GMB and Unison – and defended its case as far as an Employment Tribunal scheduled for earlier this month.
Now it has emerged there is an agreement in principle between the council and the unions to settle claims by female employees which were lodged several years ago. Details are being kept confidential but The Journal understands the deal could leave the unitary council facing a financial liability of about £35m.
It is another financial challenge for the new authority, which is already facing budget and efficiency savings of £55m over two years.
The previous Labour administration at County Hall backed senior officers’ advice the equal pay claim should be resisted and challenged in court, on the grounds the council had a strong defence. But the new Liberal Democrat administration – which took over in May last year – has been keen to settle the matter. The council will seek to fund the massive payout through capitalisation, which involves the Government allowing it to borrow more money.
A ruling by the Employment Tribunal earlier this year, on which grades of female workers could make equal pay claims, added around £10m to the potential bill, which was estimated a year ago to be up to £45m.
The issue of compensating under-paid female workers has been rumbling on since 1997, when the single status agreement was drawn up between the council employers and unions representing women employees.
The agreement was meant to be implemented by March 2007, but an estimated two-thirds of councils failed to meet the deadline, leading to massive payback liabilities with female workers able to claim for six years in back pay.
Yesterday neither senior county councillors or officials of the GMB and Unison would comment publicly on the agreement, which was struck just before the Employment Tribunal was due to sit earlier this month.
A joint statement issued by the county council said: “The parties are pleased to announce the equal pay litigation on behalf of female claimants against the council, supported by GMB and Unison, has been settled in principle.
“The details are confidential, but the agreement represents a fair and balanced settlement for both parties and a satisfactory outcome for the claimants and the taxpayer. The parties believe this provides a solid basis for concluding the single status negotiations and building for the future of the new unitary authority.”