Tuesday, November 13, 2012

How Equal Pay has driven Birmingham City Council to the edge of bankruptcy..... and who is to blame?

How Equal Pay has driven Birmingham City Council to the edge of bankruptcy..... and who is to blame?

Followers of the local news will, I am sure, be horrified and mystified by headlines claiming that Birmingham is on the verge of going bankrupt. How is it that only 12 months ago, Birmingham was given a top class AAA credit rating by the worlds banks, but is now on the verge of closing.....and yes, bankruptcy of a local Council does mean wide scale redundancies and closure of libraries and leisure pools. 

The threat of bankruptcy is due to the Council losing the following case: Birmingham City Council (Appellant) v Abdulla and others(Respondents) [2012] UKSC 47 I don’t wish to go through the nitty gritty details of this case, since Paul Dale has already done an excellent piece on the Chamberlain Files at http://www.thechamberlainfiles.com/birmingham-council-reveals-horrendous-757-million-equal-pay-bombshell/5175
As a result of losing this case Birmingham City Council will now have to find £757million to pay present and past Council workers 6 years back pay due to the Council breaching the ‘equality clause’ of Equal Pay Act 1970. 

There has been alot of finger pointing at who is to blame for this mess, but I will summarise them as follows:

  • The 1997 Single Status Agreement for local Councils agreed between the Tony Blair government and the trade unions. This agreement set out the process for re-evaluating all jobs within Council so as to remove any pay discrepancies between mainly male and female jobs. Once any discrepancies in pay were discovered, the Equal Pay Act 1970 allowed for 6 years back pay. 
  • The 2004 pay implementation agreement between the Tony Blair government and the trade unions which insisted that all local Councils had to implement the 1997 Single Status Agreement by 1st April 2007 
  • The 1999 to 2004 Birmingham Labour administration, led by Councillor Sir Albert Bore. This administration did absolutely nothing to even start the process of introducing Single Status. It meant the new Conservative-Liberal Democrat administration had 3 years to introduce Single Status from scratch. The Council was such a shambles in June 2004 – when the new administration took over – that the Council did not have complete list of its employees or what exactly they did. 
  • The Trade Unions who allowed the male dominated areas of Birmingham refuse collections to have ridiculously exorbitant bonus schemes that allowed refuse workers in Birmingham City Council to easily earn in excess of £40k. At the same time these trade unions did not make their female members aware of these bonus schemes in other parts of the Council 
  • ‘No Win, No Fee’ solicitors that have successfully sued both trade unions and local Councils for breaching the Equal Pay Act 1970, leaving Birmingham City Council now on the verge of bankruptcy and thousands of Council employees out of a job. Whereas the original 1997 Single Status Agreement hoped that trade unions and councils could negotiate away the pay discrepancies, the ‘No Win, No Fee’ have gone for the jugular, with the sole aim of maximising any compensation so they can earn their own 10% cut of the compensation. As a result, Birmingham City Council has a huge waiting list of workers who all want 6 years back pay of the ‘refuse workers’ luxurious bonus scheme that they never knew about. 

Whilst commentators of a left-wing bent have congratulated the women workers for their court success last week. Nobody mentions that the women will have access to the same luxurious bonus scheme that ensured Birmingham refuse workers were massively overpaid....and therefore these women workers will also be massively overpaid.

So who is the loser in all of this? Well it is you and me, who will have to pick up the bill through our Council tax to award these claimants 6 years back pay for an inflated bonus that most of us only dream of. The other losers will be the Council workers who will now have lose their jobs to fund this 6 year back pay.


At 9:27 PM, Blogger hugo1978 said...

senior management is to blame and they have long gone deserted the scene and its employees. they should be dragged back, their homes reposessed and bank accounts frozen. seems harsh but why should they get away with causing so much sadness...


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