Councils face a fresh wave of potential equal pay claims after a legal ruling exposed problems with the application of the national pay scheme, a high-profile lawyer has warned.
Stefan Cross KC, who made his name as the no win, no fee nemesis of town halls more than a decade ago, said that while the sector’s attention has been on Birmingham's equal pay issues - which this week forced the city council to issue a section 114 notice - a tribunal ruling against Fife Council was potentially more significant.
In July, tribunal judge Ian McFatridge ruled Fife’s job evaluation scheme did not meet the requirements of the Equality Act 2010 - rendering it unreliable.
Fife’s evaluation regime was based on the national pay scheme, but the 1,200 staff involved effectively challenged the council’s use of the scoring system used to determine pay for specific roles.
The tribunal concluded it could not rule out manipulation of the results and that Fife’s failure to keep written records was an ‘institutional failure’.
Fife now faces a potential multi-million-pound bill to settle claims, although The MJ understands the authority intends to appeal the tribunal decision.
The council has already paid out £82m to settle equal pay claims since 2004.
Mr Cross said: ‘The decision of the tribunal in Fife is probably the most significant precedent because it is the [legal] strategy that could apply to all authorities.
'In Fife, it was established essentially that they had incorrectly applied the [national] scheme they had used.’
Lawyers primarily representing female cleaners, home carers and catering staff successfully claimed Fife’s scheme led to them being paid less than others - often men - performing similar or equivalent roles.
The Fife case differs from equal pay cases at Birmingham and Glasow city councils, which were primarily based on challenges to bespoke local pay schemes.
Mr Cross warned there may be ‘two dozen’ or more potential legal cases ‘and this may escalate’.
A GMB trade union spokesperson said its senior officials were now considering legal challenges at other UK councils.
They added: ‘We believe equal pay remains a systemic problem.
'Where successful challenges have been made, the rulings indicate there could well be other claims.’
One local government expert added: ‘Birmingham is an extreme example and most councils do not face similar bills, but it seems evident that accrued liabilities for equal pay have, in extreme circumstances, the ability to effectively bankrupt local authorities.
'There needs to be a sector-wide response.’
A spokesperson for public sector HR association PPMA said: 'Local authorities evaluate and grade roles using reputable equal pay job evaluation schemes - and undertake regular equal pay audits.
'From a PPMA perspective - Birmingham aside - we don't consider equal pay risk as being a major issue in local government.'
