In a decision that could potentially cost unions over £100 million, the Court of Appeal last week ruled that the GMB union discriminated against its women members while negotiating a pay deal with their employer.
The landmark case will have ramifications for thousands of local authority workers involved in the dispute over the single status pay deals, which were supposed to ensure equal pay for work of equal value, while compensating those who had not received this.
Twenty six women workers at Middlesbrough council, who said they had been “sold down the river” by their union, are now entitled to compensation that will be assessed at a separate hearing at an employment tribunal.
The case centres on the failure of the GMB to strike a tough enough bargain with the council, which meant the workers missed out on their share of around £1 million compensation.
The Appeal Court restored an employment tribunal ruling that the GMB had “rushed headlong” into an “ill?considered deal”.
The deal with Middlesbrough council meant that manual workers involved only received roughly 25 percent of the compensation they could have expected for past inequalities in their pay. Workers disadvantaged by the council’s previous pay policies but employed at higher grades received nothing.
Lord Justice Maurice Kay said, “There had been not only a failure to provide full information, but also positive manipulation of relatively unsophisticated claimants by suggesting that the offer from the council was acceptable and placing them in a position where they were in fear that, if they pressed for more, it might lead to job losses and to their being seen as traitors to their colleagues.”
Officials from the GMB say they are disappointed and now plan to take the decision to the House of Lords.
GMB national secretary Brian Strutton said, “The Court of Appeal has found that the way the union went about getting the balance right between conflicting collective needs and individual rights was not correct.”
The court’s decision follows two earlier verdicts on the controversial case, known as GMB v Allen.
An employment tribunal originally ruled that the GMB had discriminated against the women. That decision was later overturned at appeal.
The Middlesbrough single status deal indirectly discriminated against women because, although it was negotiated on behalf of all workers, women were more likely to have suffered lower pay in the past and so were most affected by the decision not to push for full historic compensation.
Although the women did receive some compensation, the court criticised the GMB for “deliberately omitting” advice to its own members that they were not getting the best deal.
A rough estimate of the cases outstanding suggests the GMB may have to compensate around 4,000 women as a result of this decision, while the Unison union has at least 7,000 claims outstanding against it.
The background to the case is the single status agreement signed in 1997 by local government employers and national trade unions. It followed a series of successful employment tribunals over equal pay.
Typically, women had for many years been on the same pay grade as male manual workers doing jobs of equal value to male manual workers. However, they were not eligible for bonus payments that the men received, and in some cases were getting 40 percent less.
Single status deals were supposed to deliver a common pay scale for all jobs and the harmonisation of conditions. It was a pretty rotten deal and was based on what the councils could afford, not on justice.
The government refused to give local authorities the extra funds to pay for the deal.
The union’s lack of a national strategy and their initial support for the deal left many local branches to negotiate their own deal.
Cutting pay protection for existing workers, bargaining over the back pay that workers are legally entitled to, and negotiating over how many union members will see their pay cut has become the norm.
This has left many workers isolated, and some feel they have no choice but to resort to the courts. In cases where single status agreements have gone through, and it is too late to sue the council, some workers are suing their unions.
Lawyers have been quick to get in on the chaos, with their Action 4 Equality group taking up claims across Britain.
Its frontman Mark Irvine, formerly of Scottish Unison, signed single status deals on the union’s behalf.
The main lawyer taking on the cases is Stefan Cross, a former Labour councillor in Newcastle.
The union leaderships have used legal cases as an excuse to prevent members from even discussing single status. They may use the latest judgement to continue this.
The potential cost to the unions is estimated at over £120 million. However, for claims to be successful, they will have to prove that the unions didn’t represent their members’ interests.
That should be the lesson – standing up for the membership is the way to get more for workers. Not to do so leads to demoralisation and a weakening of union organisation.
If there isn’t a national fight over equal pay this may prove be an expensive lesson.