Birmingham City Council may have to pay compensation running into tens of millions of pounds after losing a groundbreaking equal pay case.
Britain’s biggest local authority is staring at a financial nightmare and faces the prospect of being sued by thousands of women who for years were denied hefty bonuses paid to male workers.
The Court of Appeal on Tuesday came down on the side of 174 former council cleaners, cooks, caterers and care staff, and agreed that they can take their compensation battle to the High Court.
Council leaders are now considering a last attempt to defeat the women by lodging a final appeal at the Supreme Court – the highest legal body in the land.
The Court of Appeal decision breaks with English legal tradition which has always seen equal pay claims contested at employment tribunals, where cases must be brought within six months of a person leaving their employment.
In the High Court, cases can be heard up to six years after a person loses their job – opening up the likelihood of an avalanche of claims from ex-council workers who thought they had left it far too late to challenge the council.
Law firm Leigh & Day represents the 174 women who were excluded from cash bonuses which were handed out to employees in male-dominated jobs such as refuse collection, street cleaning, road maintenance and grave digging.
The firm took breach of contract claims to the High Court, but council lawyers tried to get the case struck out.
They argued that the matter could only be heard at an employment tribunal, where the six month time limit had long since passed.
When the High Court in London agreed a year ago to hear the case, the council lodged an immediate appeal which it has now lost.
Former school lunchtime supervisor Linda Manders, aged 59, worked for the council for 10 years at Northfield Manor Junior and Infant School, is typical of the type of former employee who stands to win substantial back-pay.
When she left the school in 2008 she believed she would receive compensation, but lost out because her claim was lodged more than six months after leaving her job.
Ms Manders, from Selly Oak, said: “I was disgusted but there was nothing I could do.
“The lunchtime supervisor role was the only job that fitted round my needs, although the pay was low and much lower than men on the same pay grade.
“Not being able to claim the pay I was entitled to is simply not right and this judgment helps me and others like me who may now be able to recover what they should have been paid over many years.”
Leigh Day & Co partner Chris Benson said: “Every judge that has considered this case in both the High Court and Court of Appeal has expressed the view quite clearly that these claims on behalf of our clients would be successful.
“Birmingham City Council is trying through legal technicalities to avoid paying what they owe to our clients and in doing so are continuing to waste taxpayer’s money, ramping up the legal costs unnecessarily by fighting a hopeless battle.”
Mr Day said the council’s legal costs would hit £500,000 if it went ahead with the Supreme Court appeal.
The council has already set aside more than £200 million to settle equal pay claims brought since 2007, and will now have to find even more money at a time when public spending is under the cosh.
The back-pay claim by the 174 women, which stands at about £3 million, has been described as “the tip of the iceberg” by lawyers, who expect hundreds of fresh claims to be lodged.
A council spokesman said the city was still considering taking the matter to the Supreme Court.