3 October 2006 NOT EXEMPT EQUAL PAY UPDATE

Transcription

1 STIRLING COUNCIL THIS REPORT RELATES TO ITEM ON THE AGENDA EXECUTIVE CORPORATE SERVICES 3 October 2006 NOT EXEMPT EQUAL PAY UPDATE 1. PURPOSE 1.1 The purpose of this report is to update the Executive on the ongoing work to discharge the Council s responsibility in relation to Equal Pay claims. 2 SUMMARY 2.1 Following his success in gaining significant compensation for clients in some high profile Equal Pay cases in North East England a no win, no fee lawyer, in association with an organisation called Action 4 Equality, began to operate in Scotland to canvass for business to take on individual Equal Pay claims. 2.2 To date 111 individuals within the Council have lodged statutory grievances in relation to Equal Pay claims, 85 of which have escalated to Employment Tribunal stage. In addition, the GMB has lodged a collective grievance on behalf of their female members whom they believe have an Equal Pay grievance. 2.3 Stirling Council, along with all other Councils in Scotland, took the decision to offer an Equal Pay compensation payment to the remainder of the female manual workforce (the highest risk group) in order to stem the lodging of grievances and enable us to refocus on the implementation of and the National Single Status Agreement. This involves offering a compensation payment to 801 female manual workers. 2.4 Working in partnership with the Trades Unions a formula was agreed for calculating the compensation payment. This was based on an estimate of what could be achieved through an Employment Tribunal taking account of statutory and other deductions. The Trades Unions have demonstrated their appreciation of the considered approach taken by Stirling Council to reach a fair settlement figure. 2.5 A series of information roadshows were held in June/July 2006, supported by Senior Management and the affected Trades Unions. Some 425 female employees attended these sessions.

2 2.6 Following this Signing Sessions have been arranged for September/October 2006 at which compensation payments will be offered upon the signing of a Compromise Agreement. This process will be supported by two firms of independent solicitors who have experience of similar events with other Local Authorities. 3 RECOMMENDATION 3.1 The Executive is asked to note the contents of the report. 4 CONSIDERATIONS The Legal Position 4.1 The Equal Pay Act 1970 (EPA) gives an individual a right to the same contractual pay and benefits as a person of the opposite sex in the same employment, where the man and the woman are doing: like work; or work rated as equivalent under an analytical job evaluation study; or work that is proved to be of equal value. 4.2 The employer is not required to provide the same pay and benefits if it can prove that the difference in pay or benefits is genuinely due to a reason other than one related to sex. 4.3 If a claim is successful, the complainant will be entitled to: the same level of pay or benefits as his or her comparator for the future (if the complainant is still in the same job) and backpay representing the difference in pay (subject to a limit) with interest. 4.4 In July 2003 the EPA was amended, replacing the previous 2 year limit on backpay with a 5 year limit in Scotland. Background 4.5 A no win, no fee lawyer, Stefan Cross, won some high profile Equal Pay claims against Councils in the North East of England. He then began to operate north of the border and linked up with an organisation called Action 4 Equality. 4.6 Through newspaper articles and leaflet distribution within schools across Scotland, including Stirling, Stefan Cross attempted to generate business by offering to take up individual Equal Pay claims on a no win, no fee basis. 4.7 The literature distributed included a template contract that is open to interpretation with respect to the level of fees payable by the client. Because of this, the Management Team issued a joint core brief with the Trades Unions setting out our interpretation and encouraging individuals to seek independent advice before signing up.

3 We also indicated in that briefing that we were confident that we could reach a negotiated settlement, which would be satisfactory to both employees and the Council. 4.8 At a national level, CoSLA established a number of task groups to co-ordinate information on current developments, including PR and liaison with the Executive on how to address the potential cost implications of equal pay claims and implementing Single Status. CoSLA also engaged a Queens Counsel to assist Councils in making their defences against any claims under Equal Pay legislation. 4.9 To date 111 individuals within the Council have lodged statutory grievances in relation to Equal Pay claims, through the no win no fee route. These have all progressed to Employment Tribunal stage. In addition, the GMB has lodged a collective grievance on behalf of their female members whom they believe have an Equal Pay grievance To assist with this complex area of employment law we employed the services of Dundas & Wilson to assist with our immediate needs in defending these claims Stirling Council, along with all other Councils in Scotland, took the decision to offer an Equal Pay compensation payment to 801 female manual workforce (the highest risk group) in order to stem the lodging of grievances and enable us to refocus on the implementation of Job Evaluation and Single Status. The Process 4.12 Working in partnership with the Trades Unions we agreed a formula for calculating the compensation payment. This was based on an estimate of what could be achieved through an Employment Tribunal, taking account of statutory and other deductions. The Trades Unions offered their appreciation of the considered approach taken by Stirling Council to reach a fair settlement figure The options available to manage the process included offering compromise agreements on an individual basis or engaging ACAS to support the process through individual COT3 agreements. The former was chosen as this was deemed to be a more pragmatic and efficient way of managing the process An Equal Pay short life working group was established with representatives from across the Council to help manage the process. Thereafter, a series of roadshows was set up during June and July 2006 to explain the background as to why the Council was making the offer and the process to be adopted. These Roadshows were introduced by the Chief Executive or a Head of Service and were supported by full time officials of the affected Trades Unions. In total 425 female employees attended these Roadshows The final stage in the process is the Signing Sessions. These will be run over two weeks until 6 October Two firms of independent solicitors have been appointed to support the process; both have experience of running similar events with other Local Authorities.

4 4.16 It is hoped that those individuals who have submitted individual grievances will also accept the Council s compensation offer and withdraw their Employment Tribunal applications. Where this is not the case we will continue to defend the cases through our external solicitors until Employment Tribunal stage. 5 POLICY IMPLICATIONS 5.1 The payment of compensation payments to female manual workers affirms the Council s commitment to being an Equal Opportunities employer. 6 CONSULTATIONS 6.1 Council Management Team, Trades Unions through monthly Bi-partite, Job Evaluation sub-group meetings and Equal Pay Short Life Working Groups. Elected Members through GRPG and Corporate Tripartite Working Group, Policy Executive. 7 RESOURCE IMPLICATIONS 7.1 The cost of Equal Pay compensation payments to 801 female manual workers is calculated at approximately 4.5m. Financial provision has already been made in the 2005/6 financial accounts. The provision has been subject to external audit and has been deemed to be satisfactory. 7.2 The cost of independent legal support required for the 16 Signing Sessions equates to 1000 per day ( 8,000). The cost to date of advice and support from Dundas & Wilson is 58,000, to be met from Corporate Services budget. 8 BACKGROUND PAPERS 8.1 SCMT, 14 November, 2005 and 24 April 2006, Job Evaluation, Single Status and Equal Pay, GRPG, 28 September 2005 and 13 April 2006; Job Evaluation, Single Status and Equal Pay Update, CTWG, November 2005.

5 Author(s) Name Designation Tel No/Extension Lorraine Eivers Corporate HR Manager Ext 2554 Approved by Name Designation Signature Bob Jack Director of Corporate Services Date 14 September 2006 Reference