13 November 2012
Birmingham City Council faces £757m bill over equal pay
Birmingham City Council could be set to pay around £757 million in compensation to former female staff members over employment law violations pertaining to equal pay.
An annual audit letter assessing the local authority's financial performance has revealed that this total reflects "actual and potential" equal pay settlements for cases arising between 2006 and 2012, with the total set to rise higher if more claims are brought forward.
The council has settled some of these claims, but its outstanding liabilities are currently estimated at around £541 million.
These calculations come in the aftermath of a landmark legal ruling against the UK's largest local council that was announced two weeks ago.
A group of 170 female workers, including cooks, cleaners and care staff were able to successfully bring equal pay claims against Birmingham City Council, despite the fact that many of their cases dated back beyond the typical six-month time limit associated with employment tribunals.
The plaintiffs and their legal teams were able to successful persuade judges to allow their cases to be heard in civil courts, where the deadline is six years.
In coming to this conclusion, the Supreme Court has effectively set a precedent that will allow workers to lodge complaints about unequal pay over a much longer time period, which will have extensive implications for employers and staff alike.
This emerges at a time when British businesses' continued failings in providing equal pay for male and female staff has come under the microscope.
A report from the Chartered Management Institute (CMI) released earlier this month revealed that the average female executive experiences a lifetime earnings gap of £423,390 when compared to a male worker with an identical career path.
This discrepancy extends both to basic pay rates and bonus payments, leading the CMI to call for legislative action to help address this harmful trend.
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Posted by Chris Stevenson