Local authorities and National Health Service trusts may face thousands of equal pay claims by low-paid female workers after a landmark ruling on Tuesday by the Court of Appeal.
Women at two separate councils in the north-east – among them cleaners and lollipop ladies – have waged a four-year battle over claims that they missed out on years of bonuses paid to male staff doing work of equivalent value.
The appeal court ruled that schemes introduced in the 1990s and intended to bring their pay in line with male colleagues were discriminatory.
So-called “pay protection” schemes topped up wages of male workers who would have faced a drop in pay as the result of the introduction of equal pay across equivalent job categories.
Lawyers said the ruling could pave the way for a flood of claims against local councils, which are trying to resolve tens of thousands of equal pay complaints.
Rachel Crasnow, a barrister at the Cloisters chambers, said: “The ruling, that discriminatory pay protection is unlawful unless it can be objectively justified, could pave the way for thousands of new equal pay claims against local authorities and the NHS.”
According to the most recent figures from Acas, the conciliation and mediation service, claims for equal pay for local authority and NHS staff have surged by almost a quarter in the 12 months to the end of March, and the potential bill runs to billions of pounds.
Some councils last year warned of an equal pay time-bomb. The government let them increase borrowing or use receipts from asset sales to pay for backdated claims, expected to total £3bn ($6bn).
According to separate data published this month by the tribunals service, part of the Ministry of Justice, claims lodged with employment tribunals were 42 per cent higher than expected during the year to March.
The women involved in Tuesday’s case all worked in low-paid jobs for Redcar & Cleveland and Middlesbrough councils. Lawyers for the two local authorities said they would seek to appeal to the Lords, given the importance of the issues involved.