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Birmingham’s huge equal pay bill

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Birmingham council faced with huge bill after pay discriminationThey could have settled with the workers they underpaid.

Instead, they paid London lawyers ‘to defend the indefensible’.

Many former cooks, cleaners and carers are now eligible for up to £100,000 after proving unfair discrimination.

Up to 5,000 women may benefit from the UK Supreme Court’s decision in 2010 to award equal pay compensation after the Employment Tribunal decided that bonus payments made to large numbers of men, mostly employed as refuse collectors, street cleaners and road workers, were discriminatory.

Judges were told that women employed as cooks, cleaners and care assistants were routinely denied bonuses similar to those given to employees in male-dominated areas of work; one refuse collector took home nearly £51,000 in a year when a woman on the same pay grade earned less than £12,000.

And Birmingham City Council, England’s largest local authority, now faces a legal and compensatory bill of more than £1 billion.

It has also been criticised for not settling its pay discrimination case earlier.

Chris Benson, one of the lawyers representing more than 5000 thousand women making equal pay claims, said: “There are a number of ways Birmingham could have avoided owing these huge sums of money.

“They could have settled with the workers they underpaid instead of paying London lawyers to defend the indefensible for two years.

“They could, of course, have paid the women fairly at the time, as other councils did.

“Instead they are now left with so much to pay as they owe these women many years of wages, with interest on top.

“They could have also stopped paying the men bonuses sooner. We showed that, even when they knew they had a problem, they still tried new pay systems that contrived to pay the men more.”

The Council’s bill has not surprisingly become increasingly political. Gisela Stuart, Labour MP for Birmingham Edgbaston told BBC Radio 4 that: ‘The previous Tory-led council could have settled. They kept challenging the court decisions time and time again.’

Previously, the government had loaned Birmingham City Council £530 million at low cost to help fund the settlements.

Months of speculation about the Council’s ability to pay its costs then followed a Department for Communities and Local Government (DCLG) announcement that it would not allow the local authority to take out any more loans.

After an extensive review of its property portfolio, the Council announced that it would sell the city’s National Exhibition Centre (NEC).

The NEC is considered by many to be one of the Council’s crown jewels, and contributes approximately £2 billion to the local economy. Property experts estimate that sale of the centre could raise upwards of £300 million.

Trade unions acting on behalf of the women have agreed a schedule of payments, with £120 million due this year and £154 million due in 2015.

The Council has already made £450 million of settlement payments.

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