10 June 2013

Why the Brighton & Hove Council Pay Cuts Are Not About "Equal Pay"

First off, a bit of background to the current pay dispute that has led to B&H Cityclean staff being balloted by it's union GMB, and voting 95.6% for a strike (on a 86% turnout). A 7 day strike has been set for Friday 14th June followed by indefinite "work to rule" (more strike dates could follow).

Since writing this previous post - http://neilharding.blogspot.co.uk/2013/05/pay-strike-why-jason-kitcat-numbers-don.html?m=0 - (which despite limited publicly available information turned out more accurate than I thought possible) a few more nuggets of information have been released by BHCC. So I thought it was time for an update. In particular I want to destroy the myth that this dispute is about "equal pay" or "bringing poorly paid women's pay UP to men's pay level".

If I was going to summarise this dispute in one phrase it would be "delineating pay differentials".

What I mean by that is, a change to overall pay so that at each pay scale, allowances are proportionate to the basic hourly rate paid.

Because allowances are generally a higher proportion of the pay of lower paid workers (both in percentage terms & because the low paid tend to do more shiftwork & anti-social hours), and because allowances have to suit the current arbitrary basic pay evaluations, this is resulting in proposals to cut allowances to the lowest pay grades and increase them to higher pay grades. So generally, if you are on higher pay you get a rise, lower pay you see a cut of varying amounts. Cityclean staff are in the lower pay grades who are seeing cuts of up to £4,000pa.

As you can imagine, explaining this in a 5 second soundbite (which is most people's level of interest) is nigh on impossible. So it is easy to see why people might just prefer to think it is about bringing women's pay UP to men's levels, when what is actually happening is completely different.

This is most visibly demonstrated when we consider why the new proposals mean some females on less than £16,000pa (gross pay including allowances) are seeing a pay cut while some men on over £21,000pa are seeing an increase in pay, despite working similar hours and shifts. (I have gleaned this information from comments Penny Thompson (Chief Executive) said on Friday during the #BHopendoor. She stated that allowance changes (cuts & increases) were mostly hitting the lowest paid hardest, i.e. scales 1-5 but most gainers were care & support workers who are on scales 4 & 5. So therefore most cuts must be scales 1/2 & 3).

So if your understanding of "equal pay" or "single status" laws are that women and men doing jobs of "similar" status are "paid the same" then you might be confused as to why these pay differentials matter at all?

My understanding is that because of the way that "basic pay" gradings were set in 2009, (when the Tory administration attempted to tackle the "single status" issue), there is a potential legal requirement to bring a whole "historical hotchpotch" of allowances "into conformity" (allowances were the part of pay that were left unresolved in the single status talks last time) which is bound to lead to unfair cuts to the lowest paid or a significant increase to the wage bill because increases go right up the pay scale increasing the pay differentials. My guess (and I'm being kind here) is that the Greens didn't initially realise this.

The main problem seems to lie in how the "job families" were decided, not just those "similar" jobs but also those jobs deemed higher up the pay scale.

The "potential" risk of single status lawsuits depends on how many claims are viable. I suspect since several thousand staff (& ex staff) have already signed "compromise agreements" in 2009 when the council paid out £35m in compensation to those deemed underpaid, this potential has been greatly reduced. Compromise agreements take away the right to sue the council on employment grounds. (I am told only for historical employment, but I was under the impression it was future cases as well).

However since a ruling in Birmingham late last year that ex employees were entitled to 6 years backpay even if they had left employment longer than the previous 6 month employment tribunal time limit, the potential to sue in the civil courts was increased and costs are higher there than in tribunals therefore increasing legal costs for the council.

However to be worth a "no win no fee" case, the backpay would have to be substantial and the pay issues are tiny now compared to the 1980s and 1990s. Still I can understand the council wanting to eliminate future risks completely now as this will set the clock running down in terms of the 6 year period. Although I fail to see how change now would eliminate all past claims (as some have claimed). It is nonsensical to think historical claims would become invalid. I think it will reduce not eliminate historical claims.

So what is the solution to all this?

Well, the Greens truly had an opportunity here to show they were a radically different type of political party. They failed! And the Greens as a party need to ask difficult questions as to how their internal democratic structures went completely awry.

I believe that had Caroline Lucas been leader of the council instead of Jason Kitcat, we would not be in this dire situation. Caroline would have immediately realised that cuts to some of the lowest paid staff were off the agenda whatever the advice of senior officers.

The radical answer is politically challenging. Rather than just doing the bare minimum in terms of reducing pay ratios and providing a "living wage". To solve this without pay cuts to the low paid requires radical restructuring of basic pay scales.

Instead of tinkering with a couple of salaries at the top, the Greens could have demonstrated how a council can be run efficiently with no-one paid more than £50,000pa.

And instead of £7.45ph being deemed a "living wage" in high cost Brighton (when even northern Labour councils pay this). They could have moved nearer to the London living wage of £8.55ph as the bare minimum. With a guarantee that any drop in allowances are made up by increased basic pay.

With pay scale differentials squeezed much closer together the savings are estimated at around £13m. Should be easily enough to solve a dispute where the current proposals change no more than £1m of the wage bill. The fact that Penny Thompson & Jason Kitcat ignore questions asking how much saving a £50,000pa cap would reap speaks volumes.

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