Largely unknown to the broader memberships, lawyers are devouring union funds – aided and abetted by some union members...
Equal value spells an end to collectivism
WORKERS, SEPT 2006 ISSUE
An Employment Tribunal recently ordered the GMB union to pay around £1 million in compensation to some women members employed by Middlesbrough Council. How did this come about and what are the consequences?
The Equal Pay Act originated in EU law. Women could claim at a tribunal that their work was of equal value to that of a man on a higher rate, and if successful would be entitled to the same pay. In the early days, especially in the mid to late 1980s and early 1990s, many trade unionists thought that this was the answer to Thatcherism – at last we could win pay increases by paying lawyers to take up equal value claims. Experts were paid small fortunes to give evidence on relative value of work, and specialist lawyers made big killings.
But most unions decided to deal with this legislation through collective bargaining, working as a collective rather than an individual. The big agreements came in local government, the NHS and the civil service. Unions used the threat of mass claims submission to pressurise the employers into reaching agreements.
The employers knew from their lawyers and from cases that were taken that the settlements could be enormous. Their only solution was to negotiate deals with unions or get rid of the jobs through privatisation.
The first deal was for local government manual workers in 1986. A new grading structure based on equal value saw big pay increases for most women workers. But then came the legal maze: the deal was vulnerable to claims for six years' back pay, and bonus schemes had been negotiated for some jobs – skilled workers in construction, engineering and heavy manual work – that were almost exclusively male.
In 1997 came a new local government agreement for a national job evaluation framework with local negotiation, the Single Status Agreement. The problems became more obvious. For the unions, there was the threat to jobs if successful claims led to more privatisation, and there was the employers' threat to withdraw bonus schemes from potential male comparators. The legal bills would be astronomical for both sides. By 2000, the local government employers had got rid of many in-house services.
In the NHS, the agreement became known as Agenda for Change, and by now the unions had learnt how to get more control of these negotiations. Equal value claims were lodged on behalf of a large number of women workers in Carlisle transferred to a PFI contract. It was assumed that these cases would pressurise the NHS to settle through negotiations. In fact, the government put a few million pounds to one side, and negotiations were concluded on the basis of a form of job evaluation, tied to changing roles and skills, equal value and significant pay increases for the vast majority. The key to this agreement was that unions had to agree to any change and outcomes – they were in control.
When the unions, in particular Unison, tried to retake control of the Carlisle cases, they were stopped by a Counsel's Opinion obtained by their lawyers. The lawyer handling the case then set himself up as a separate law firm and with the aid of disaffected union reps solicited and lodged equal pay claims against local government employers where unions were in the process of negotiation. Accusing the unions of selling their women members short, the new law firm went on to undermine collectivism and collective bargaining in local government and the NHS by posing as the champion of underpaid women, submitting hundreds of Employment Tribunal claims on the basis of no win no fee but taking 10 or 15 per cent of any settlement.
In Carlisle itself, the individual settlements are said to be between £1,500 and £300,000 with most being less than £30,000, but the total is expected to be more than £80 million (just imagine 10 per cent of that). Many of the women have already identified the Spanish villa they will buy when they receive their settlement and hand in their notice. The management of the new merged NHS Trust (not the PFI employer) has told the three Unison branch secretaries that they will have to return to work as the new Trust does not intend to have union branch secretaries, but will organise an election of a "Workers Champion"! You might have expected the Unison membership to have vigorously and loyally defended their union reps, but because the branches had abandoned bargaining to lawyers and individuals, there is no loyalty or organisation.
In Middlesbrough, the GMB and UNISON had reached collective agreement with the council on Single Status. The unions sought to protect those members whose pay would be reduced and to avoid contracting out of jobs. The new law firm then took the GMB to an Employment Tribunal claiming the union had failed to represent its members' legal interests. The tribunal decided that "If necessary, the employer must lawfully reduce the wage of the higher earner to a level at which equality can be maintained. ....if that involves contracting out services, reducing pay or cutting hours or jobs or hours...that is a price which must be paid in order to ensure equality." It then ordered the GMB to pay around £1 million in compensation to a number of its women members.
Should the GMB lose its appeal against that decision it and other unions will be at risk to identical claims throughout the country. Collective bargaining will be out of the window with employers looking to contract out jobs as soon as possible to avoid the scale of these claims, and the lawyers will make a fortune. One local official has described the new atmosphere at union branch meetings: some women members arrive to take notes to pass on to their lawyer.
Employers say that there is no point negotiating with the union – only the lawyer. Members whose cases the lawyers reject go back to their union to be told that there is nothing they can do and so they leave the union. The men know that it is only a matter of time before their pay and conditions are attacked or they are privatised. The unions' insurers have withdrawn cover and as more lawyers join in the rich pickings frenzy, the financial threat to unions becomes unsustainable. Barristers tell the unions they must not discuss this at union conferences so it goes broadly unreported to the rest of the membership. Ironically, it was the unions who welcomed "better" EU laws to strengthen their negotiating hand...