The union perspective on equal pay
One of the main unions involved in the public sector equal pay claims is Unison. Here, Bronwyn McKenna sets out the position on equal pay from the union’s point of view.
On this page:
Unison’s campaigning and litigation activity
Extent of the crisis
Privatisation as a root cause of today’s public sector pay inequality
To negotiate or litigate?
Deficiencies of current equal pay law
Use of collective bargaining
Single-status negotiations in local government
Agenda for Change in the NHS
Role played by no-win no-fee lawyers
No-win no-fee lawyers’ charge against unions
Legislative solutions
How should employers resolve pay inequality?
The Discrimination Law Review
Political competition on equal pay
Box 1: Flashpoints in equal pay litigation
Key points
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"Equal pay update – those of a nervous disposition may want to look away now”. Thus begins a Welsh Local Government Association briefing document on equal pay. Why should the mention of equal pay strike fear in council officials? Why does any conversation between employment lawyers so rapidly turn to equal pay? Why, after more than 30 years of the Equal Pay Act, is equal pay a hot topic?
This article outlines Unison’s campaigning, negotiating and legal activity and highlights the extent and roots of the current equal pay crisis in the public sector. It looks ahead to key flash points in the litigation (see box 1). The role of no-win no-fee lawyers is also considered. Finally, the article reflects on the private sector and outlines the practical steps that employers can take to reform pay systems without getting ensnared in litigation.
Unison’s campaigning and litigation activity
Unison, the voice of more than one million women working in town halls, schools and hospitals, as well as police and utilities, has been at the forefront of both equal pay campaigning and legal action. Last year, we joined forces with the Fawcett Society, to declare 30 October “Women’s No Pay Day” to highlight the average annual pay gap of £4,000 between men and women working full time.
Unions believe that any gender pay gap is unacceptable. Equal pay legislation was enacted following a century of campaigning from the union movement. Not only the first but the leading equal pay cases have been brought by trade unions. Unions have worked hard to improve the pay and working conditions of ordinary working women, particularly, in Unison’s case, those of low-paid women carers, cleaners and cooks often working at more than one job. Perhaps because of limited funding and the need to maximise publicity, the EOC, all too often in Unison’s view, focused on high-fliers attempting to break through the glass ceiling. Trade unions have always concentrated on the women for whom there was often no floor – glass or otherwise – to protect them from exploitation and low and unequal pay.
Extent of the crisis
Figures released in 2007 showed that equal pay claims amounted to one in five of all new employment tribunal claims. Most of these are multiple claims against public sector employers. Unison, as the largest union in public services, is supporting nearly 35,000 tribunal claims against NHS and local government employers; the GMB recently announced that it had lodged its 25,000th claim. A casual observer (or even Court of Appeal judge) might be forgiven for believing that pay inequality resides only in the public sector. The reality is that all pay systems – public or private – reflect the mores of the time in which they were developed. The reward systems including bonuses operating in the NHS and local government by the late 1970s and early 1980s reflected outdated assumptions on the respective roles of male and female workers. These assumptions were further underpinned and ossified by privatisation as outlined below.
Private sector employers with weaker union organisation and therefore less outside scrutiny are arguably even more likely to perpetuate inequality. The opaque nature of private sector pay means that it will be much harder for women there to challenge unequal pay. In contrast, the transparency of public sector grading systems means that employers who do not act to remedy glaring pay inequalities become magnets for equal pay claims.
Privatisation as a root cause of today’s public sector pay inequality
As unions had warned in advance, low-paid women were to bear the brunt of Conservative government policies on compulsory competitive tendering (CCT). It is striking now, when one reviews the lead authorities on equal pay, how often CCT or privatisation features in the factual matrix of the cases. Two examples are highlighted below.
The Unison case of Lawrence v Regent Office Care [2002] IRLR 822 represented an unsuccessful attempt to bring equal pay claims on behalf of women employed by private cleaning and catering companies. Most of the women had originally worked for a council, at which time their work had been rated as equivalent to that of road sweepers and gardeners. The women were subsequently made redundant and re-employed by contractors. The claimants argued that they ought to be allowed to use the council’s male employees as comparators. The European Court of Justice held that the differences in pay could not be traced back to a single source and the claims failed.
The Conservative Government instructed the NHS, in circular HC(83)18, to put out to tender those support services that tended to have a female-dominated workforce, such as domestic, laundry and catering services.
The consequences for gender equality are illustrated by the Unison-supported case of Armstrong v Newcastle upon Tyne Hospitals Trust [2006] IRLR 124. This case related to the withdrawal of bonus payments from female domestic ancillary staff upon their work being contracted out. Porters with whom the women claimed equal value were also entitled to these bonus payments. The hospital tendered the domestic work and an in-house tender was accepted as a result of which the domestic staff, who were predominantly female, lost their right to bonuses. The portering work, on the other hand, was not then required to be put out to tender and as a result the porters, mostly men, retained their right to bonuses.
Armstrong was remitted to the employment tribunal from the Court of Appeal.
To negotiate or litigate?
In Unison’s view, equal pay can often be achieved more quickly and more effectively across the bargaining table than in the courtroom. Where employers are unwilling to act, unions have taken the fight for equal pay to the courts. The Armstrong case, however, demonstrates the slow and costly trajectory of such cases; six years elapsed between the ET1 being lodged in May 2001 and the 2007 ET decision. It is to be hoped that Mrs Armstrong will not remain underpaid for many more years and that the question of remedies can be resolved without further trips to the EAT and Court of Appeal.
In addition to avoiding the delay of proceedings, collective agreements to introduce new pay systems in local government and the NHS have benefited many women who would not succeed in equal pay claims for the reasons outlined below.
Deficiencies of current equal pay law
The highly artificial nature of equal pay law does not fit the reality of the workplace for many women Unison members. Equal pay claimants working in heavily gender-segregated areas, such as cleaning, catering and caring, often have difficulty in identifying a male comparator. Further problems are thrown up by the fragmentation of the public sector. Two decades of outsourcing and successive waves of NHS and local government reorganisation mean that men and women working in the same employment on unequal pay will frequently be unable to point to a “single source”. Single source arguments by an NHS trust were considered by the EAT in January 2008 (Potter v North Cumbria Acute NHS Trust), and was still awaiting a decision as we went to press.
Additionally, the EAT has ruled that female staff working in voluntary-aided schools cannot claim pay parity with men employed by the education authority (Dolphin v Hartlepool Borough Council, 9 August 2006, EAT/0559/05). Given the number of voluntary-aided schools in the UK and women employed therein, this represents a significant shortcoming in equal pay law.
Women working in social care are poorly served by equal pay law. In Joss v Cumbria County Council, a Newcastle employment tribunal held that carers’ jobs were not amenable to the productivity bonuses paid to roadmen. The decision was appealed by the GMB and Unison. (A contingency fee lawyer was involved in the earlier stages of the case, but elected not to nominate lead claimants and instead to hang on the unions’ coat-tails and rely on the EAT’s determination in relation to union claimants to cover all claimants.) The EAT in Joss (UKEAT/0463/06) eventually upheld some carers’ claims but through convoluted means, and further tribunal hearings will now take place. The President of the EAT noted the difficulties of devising bonus schemes for carers observing that “a care worker who works properly is subject to the demands and requirements of the patient and cannot sensibly dictate the speed of working; moreover, the personal nature of the service makes productivity difficult to measure.” Claims by carers are therefore likely to remain a legal battleground.
Even where all the elements necessary to institute a strong equal pay claim are in place, the benefits of a successful claim are limited to the claimants. Equal pay law therefore achieves random results. Even in those few cases that result in a judicial determination of the equality clause, the outcome can be precarious. The employer may reorganise, meaning that the claims process has to be kick-started again. Accordingly, Unison believes that the only real option to improve women’s terms and conditions for the long term is to negotiate collective agreements. The Equality and Human Rights Commission has also called for unions and employers to be given scope to reach practical negotiated solutions.
USE OF COLLECTIVE BARGAINING
Single-status negotiations in local government
The local government single-status agreement was concluded in 1997 to iron out disparities in pay and conditions between white-collar and manual workers and to meet union concerns on unequal pay. The need to conclude implementation was reinforced in 2004 with the National Joint Council Pay Agreement (commonly referred to as the three-year pay deal), whereby all authorities yet to implement equal pay had to do so by April 2007. Councils are at last picking up their pace on this. Research published by the Local Government Employers in January 2008 reported that 49% of councils had carried out pay reviews as opposed to just 36% 12 months previously.
Lack of funding has largely dictated councils’ slow speed. Until last autumn, the Government had ignored calls for funding to ease the costs of implementing single status. In September 2007, the Government announced that 46 local authorities in England had been granted capitalisation of £0.5 billion; similar provision has now been made by the Welsh Assembly Government. Both announcements followed sustained campaigning by Unison and the GMB, the largest unions organising in local government. Both unions will campaign for adequate provision in future years. Lack of funding cannot, however, insulate councils from their obligations to pay their women staff equally. Claims are being brought by both unions against upwards of a hundred local authorities and more will be taken during 2008.
It appears from recent EAT decisions that there is now greater judicial appreciation of the complexity of single-status negotiations. The President of the EAT noted in Surtees v Middlesbrough Borough Council (17 July 2007) that “the need to reach a protected pay arrangement, with the agreement of the unions, was crucial to the making of the job evaluation scheme”. In the GMB’s successful appeal to the EAT against an earlier finding of indirect discrimination, the EAT President noted that single-status negotiations are “extremely challenging” due to the limits on local authority funds (GMB v Allen). In January 2008, the Court of Appeal considered two important cases on protection and single status; Surtees and Bainbridge v Redcar and Cleveland Borough Council. It is hoped that these rulings will provide pragmatic guidance facilitating the introduction of equality-proofed pay systems. The Equality and Human Rights Commission intervened in the case arguing that employers should be permitted to cushion the pay of staff facing pay cuts provided that protection is for as short a period as possible.
Agenda for Change in the NHS
In the NHS, a mix of litigation and negotiations secured the introduction of Agenda for Change, a single pay system that applies to virtually all directly employed NHS staff. In 1998, Unison and the GMB brought claims against North Cumbria Acute Hospitals NHS Trust, claims which were eventually settled for an amount running into tens of millions of pounds.
The Agenda for Change agreement was concluded in December 2004. In two separate membership ballots, Unison members overwhelmingly supported Agenda for Change. Nine out of 10 NHS staff saw their pay rise as a result. The greatest increases were received by the lowest-paid workers – cleaners, domestics, healthcare support workers and linen room and laundry assistants – who were predominantly female. Thousands of equal pay claims have been lodged by the NHS unions to secure back pay.
A no-win no-fee lawyer has challenged Agenda for Change under s.6 of the Sex Discrimination Act 1986 and s.77 of the Sex Discrimination Act 1975. This litigation is likely to delay the resolution of these claims by years. Of even wider concern is the impact of this challenge on other employers’ attempts to reform unequal pay systems. The NHS agreement was the subject of much expert job evaluation and specialist legal advice. It is thought to be the world’s largest job evaluation exercise. If the challenge is successful, there will be little incentive for any employer to introduce measures such as job evaluation to eliminate pay discrimination.
Role played by no-win no-fee lawyers
No-win no-fee lawyers are sometimes erroneously credited with launching the explosion of equal pay claims. In fact, unions were already heavily engaged in litigation when the first no-win no-fee claims were lodged.
Jan Parkinson, managing director of the Local Government Employers organisation, has noted that the ability of local authorities to undertake equal pay reviews was being hampered by the impact of no-win no-fee lawyers.
Unison has a range of concerns about the no-win no-fee market. Our concerns relate to the lack of heavyweight equal pay litigation experience of some of these lawyers and more generally to their charging practices.
While it is true that a few no-win no-fee lawyers have a background in equal pay claims, many do not.
Of particular concern are those firms that appear to have no intention of pursuing tribunal claims, and who ride into town only when a council announces that it is willing to make back-pay offers. Such lawyers offer basic advice to low-paid women on offers already made, which the employer will generally not vary, and cream off up to 30% of the women’s settlements. They tend to focus on back pay only. Unions are concerned not only with securing back pay but also with negotiating future equality-proofed pay and grading structures.
The Compensation Act 2006 regulated fees in personal injury cases to tackle cases of abuse by claims management companies. Unfortunately, despite the Act applying to employment claims as well as personal injury claims, it appears that some of the law firms and claims companies who operated in the formerly less well regulated personal injury market have moved into employment law claims and to equal pay claims in particular.
Unison has seen a mail shot sent by “Your Claim Ltd” to personal injury lawyers. The letter invites them to fund a TV advert seeking equal pay claims from public sector workers. “Your Claim Ltd” say that they have selected equal pay claims as this is a “niche market … not yet under the cosh” (of costs).
The mail shot predicts that profits of £1,500 to £2,200 per claim can be generated for what it suggests is routine work. All fees would of course be met by the claimant who instructed the no-win no-fee lawyer.
The experience of Unison members – generally vulnerable low-paid women – has highlighted three areas of immediate concern.
First, some members tell us that, in apparently clear breach of the solicitors’ code of conduct, which obliges solicitors to advise clients “whether the client’s own costs … may be covered by a trade union”, they were not advised by their no-win no-fee lawyer that they may qualify for free legal help from their trade union. These members, who say that they would not have signed up if they had been told of free union legal help, have to pay legal costs of several thousand pounds.
We also have concern about the lack of regulation of the level of costs charged. One firm based in the West Midlands was quoted in Independent Lawyer, 1 September 2007, as saying that the size of their percentage contingency fee depends largely on “how much competition we face from other lawyers”.
While, in the absence of any contingency fee limitation, an ill-advised claimant can sign up to any fee deduction the no-win no-fee lawyer can get away with, it is not always clear that their clients are being advised of their right to challenge costs. Some lawyers operating on contingency fees turn down equal pay claims which are “uneconomic” – a judgment that unions traditionally do not make.
Second, there has been a proliferation of claims companies offering equal pay advice and offering to link people with law firms to act on their behalf. What is less clear is the relationship between those claims companies and the law firms that take on the cases.
Third, penalty clauses are a common feature of the agreements signed with no-win no-fee lawyers. Members advise us, and we have seen agreements stating, that if they end their retainer with a no-win no-fee solicitor they will be charged £500 for every six months during which their file has been open irrespective of the amount of work carried out. Unison does not see how such golden handcuff penalty clauses can be justified. The EAT in Bainbridge v Redcar and Cleveland No.1 commented that the existence of such clauses militates against the early resolution of employment disputes.
No-win no-fee lawyers’ charge against unions
No-win no-fee lawyers’ characterisation of public sector unions as male-dominated is simply not one I recognise as a Unison official of 15 years’ standing. One of the core principles of Unison’s rule book is reserved seats not just for women but also, uniquely, for low-paid women, at every level of our democracy. Women are in the majority on Unison’s Senior Management Group and National Executive. Three out of our four lead national negotiators are women. Almost 50% of Unison’s regional secretaries are women and, in the north-east itself, the cradle of no-win no-fee activity, Unison’s regional secretary and lead negotiators in Health and Local Government are all women. Overall, we have 26,339 stewards, of which 51% are women; and 1,146 branch secretaries, of which 49% are women.
Legislative solutions
The complexity and scale of the current “crisis” has led some politicians and employers to cast frantically around for legislative solutions. Any proposals that dilute women’s rights to equal pay under domestic or EC law will not carry unions’ support. A proposal to allow moratoriums on equal pay claims has been embraced not only by employers but also by the EOC. In the body’s final days of existence, its chair, Jenny Watson, called for employers to have some “breathing space” from claims in return for looking at their pay system. Unison opposes both these proposals.
How should employers resolve pay inequality?
Employers not wishing to face equal pay litigation should routinely audit their pay systems to identify where pay anomalies or inequality may lie. As even the “light touch” pay audit mooted in the Discrimination Law Review will require some degree of transparency from employers over pay, all employers should begin to review their pay systems. In order to deal with staff queries on pay anomalies, employers should identify possible reasons for their pay gap and develop action plans. Measures such as promoting training and development opportunities for part-time staff are vital in correcting pay disparities. Flexible working patterns that enable women to remain in, and progress in, work after maternity leave are critical in avoiding the salary drag that many women experience after having children. Engagement with staff and their unions is vital.
The Discrimination Law Review
The Discrimination Law Green Paper was a missed opportunity to fashion new and comprehensive discrimination laws. The sections that purport to deal with equal pay are particularly weak. In its response, Unison called for mandatory pay reviews, the right to bring representative actions, the ability for claimants to cite a hypothetical comparator, and for central government funding to meet public sector equal pay costs. All equal pay campaigners, both inside trade unions and beyond, must press the Government hard to develop an effective legislative framework. The Gender Equality Duty, which came into force on 6 April 2007, is potentially an important lever to close the pay gap. The green paper mooted weakening this duty. Measures relating to public sector procurement are essential to bridge the gender pay gap given the extent to which outsourcing can intensify pay inequality.
Political competition on equal pay
Finally, there are signs that at last equal pay is at the heart of political competition between the parties. Recent polling showed that both women and men might reward the political party that convinces voters on equal pay. Seventy-two per cent of women and 66% of men said that they were more likely to listen to a politician they considered to be committed to ensuring equal pay. Recent Conservative and Liberal Democrat party announcements have called for mandatory pay audits. The voice of Government has yet to be heard. Women’s votes will be a key battleground at the next election; the political party that stands out on the issue of equal pay has everything to gain.
Bronwyn McKenna is a solicitor and is director of organising and membership at Unison. She is a member of the Administrative Justice and Tribunals Council (AJTC). Any views expressed in this article are hers alone and are not to be attributed to the AJTC.
Box 1: Flashpoints in equal pay litigation Equal pay claims are likely to occupy the attention of the higher courts for years to come. Current flash points include grievances, changes to contracts, single source and the interplay between equal pay law and TUPE. The relationship between multiple claims and the statutory grievance procedure is not a happy one. Unison, Unite and the GMB are to appeal the decision of the EAT in Highland Council v TGWU/Unison, that an employee needs to identify her comparator in a statutory grievance. This decision conflicts with the earlier EAT decision in City of Bradford Metropolitan District Council v Pratt. It is arguable that, if sustained, the EAT’s interpretation in Highland of the 2002 Employment Act makes it “virtually impossible or excessively difficult” for a claimant to exercise her Community law rights; Preston v Wolverhampton Healthcare NHS Trust [2000] IRLR 506. The EAT decided in Cumbria County Council v Dow (No.2) that the time for bringing an equal pay claim was triggered when a woman signed a document to signify her consent to a change in hours. The document stated “this contract supersedes any previous contract of employment”, and the EAT held that although nothing else had changed, the contract had been terminated thus rendering the equal pay claim out of time. This case is being appealed to the Court of Appeal. The interplay between TUPE and equal pay law is likely to feature heavily in the current public sector litigation. Two cases in which unions successfully argued that the equality clause transfers on a TUPE transfer have been appealed to the EAT; Gutridge v Sodexho Ltd and Hughes v Aramark. Issues likely to arise in these and other cases include the transferability of pay increases to the comparators’ pay under collective agreements as part of the effect of the equality clause and the question as to whether claimants and comparators cease to be in common employment? |
