Decades spent underpaying women workers could cost Birmingham City Council at least £1 billion in compensation, it has been claimed.
Lawyers acting for thousands of female staff have lodged a new case at an employment tribunal, alleging that the council is continuing to break the law by paying men far more than women carrying out the same type of work.
The case is being brought by Action4Equality, the law firm that won a landmark ruling on behalf of 4,000 cleaners, dinner ladies and carers. A tribunal found earlier this year that the council had breached the Equal Pay Act by denying female staff cash bonuses routinely handed to male road workers, binmen and street sweepers.
Compensation for the women is estimated at £600 million, but that is the “tip of the iceberg” according to Action4Equality owner Stefan Cross.
Although the bonus system was scrapped in 2008, Mr Cross alleges that a new pay grading system is just as biased in favour of men.
He added: “The council says it implemented equal pay in 2008, we don’t accept that. They are still paying the men more but calling it a hardship fund instead of a bonus.”
Mr Cross is accusing council bosses of manipulating grades by “adding bits to job descriptions” in order to inflate male manual workers pay.
The council has lodged an appeal against aspects of the tribunal ruling, a course of action described as “time wasting” by Mr Cross.
If the new tribunal hearing finds against the council, the 4,000 women will be entitled to an additional three years back pay in addition to compensation they have already received.
On top of that a further 30,000 council staff could be entitled to lodge equal pay claims, Mr Cross believes. He added: “If you look at what the women are legally entitled to over the past ten years it’s a heck of a lot more than £1 billion.”
The council is likely to be landed with a massive financial headache and will have to borrow money to meet a huge back-pay bill, but Mr Cross said he had little sympathy.
“It’s a scary headline figure but when you look at it in the round it is a relatively modest amount.
“It’s over £1 billion, but not all of it goes to the women. A lot of that goes back to the government in tax and national insurance.
“Let’s not feel too sorry for the council, don’t forget they have saved millions of pounds over the years by under-paying women workers.”
A council spokesman said: “It is correct there is continuing litigation, which we are contesting.
“The matter is sub-judice and we cannot make any further comment.”