NHS braces itself as number of equal pay claims spirals out of control

The government’s equal pay programme for public sector bodies is at risk of being overwhelmed by discrimination claims.

Local authorities have been forced to mortgage property to fund legal defences and the NHS equal pay deal could be ruled to be discriminatory. It is a sorry mess that has given trade unions the opportunity to do some old-fashioned lawyer-bashing.

Despite discrimination laws dating back to 1970, there is still a 17 per cent wage gap between men and women working full time. The Government’s answer in 1997 was to strike a deal with local authorities aimed at giving equal pay to employees whether they qualified for it through the law or not.

In 2004 an EU directive required local authorities to compensate female employees by awarding them six years of back pay rather than the two years they had agreed with the Government.

The problem was compounded further when the unions agreeed with local authorities that the equal pay review should be completed by March 2007. Less than half of councils (44 per cent) have achieved the target.

In the NHS a similar equal pay deal was reached under the ‘Agenda for Change’ (AfC), although the responsibility for back pay lay with the Government. Female employees wanting compensation for the years they were paid less than their male counterparts looked to no-win, no-fee lawyers for help.

Stefan Cross of Newcastle-based Stefan Cross Solicitors has become synonymous with equal pay claims. He is thought to have the largest number of claims, with around 30,000 equal pay cases on his books, and is leading the test case against the NHS.

The number of claims being heard in the Newcastle employment tribunal, the only UK court to hear equal pay claims, rocketed by 155 per cent from 2006 to 2007.

“It’s overwhelming and we’re very concerned about the amount of resources being used on these cases,” one NHS defendant lawyer says. “The cost of fighting each claim is about £20,000, and that doesn’t include the cost of appearing at the tribunal. It’s an amazing burden on the taxpayer.”

Many of the trade unions are also fighting alongside Cross in an effort to win back pay for their members. “This is where we’re in agreement,” Cross told The Lawyer.

Tensions are running high over a separate discrimination claim that Cross is bringing on behalf of 1,200 women, which will challenge the AfC principle.

Cross explains: “The unions argue that AfC was the solution to the equal pay issue, but we’re saying that there was historic pay discrimination and that it was reflected in AfC.”

The case aims to prove that the implementation of AfC was flawed on a regional level. If successful it could pave the way for the 800,000 NHS employees whose salaries were affected by the scheme to bring back pay claims against the Department of Health (DoH).

It also means that Unison, the Royal College of Nursing (RCN) and the Royal College of Midwives (RCM) face discrimination claims from their own members, for whom they negotiated the AfC deal.

Furthermore, the Government would be forced to revisit AfC and the principle could be abandoned altogether.

Inevitably, with approximately 75,000 equal pay claims lodged against the NHS and local authorities, there is much tut-tutting about the potential cost to the taxpayer.

Before factoring in Cross’s cases, town halls already have to pay back £5bn over six years under the EU deal. Following AfC, the NHS also has a payback bill of £5bn.

If the AfC scheme is ruled to be based on discriminatory principals it is not clear how the NHS would cope.

No-win, no-fee lawyers are being accused of undermining the unions’ equal pay drive by bringing thousands of individual cases rather than negotiating wholesale with the DoH. Cross himself has been accused of sending out ex-union officials to drum up business from disgruntled union members - an accusation he vehemently denies.

“It’s total tosh,” he says. “Never in any other field would an employer get away with saying it won’t pay because it can’t afford to. Defendant lawyers are charging the NHS £300 an hour to defend these claims - I’m doing it on a no-win, no-fee basis.”

He adds: “We’re not actively marketing NHS equal pay claims.”

Originally the precedent-setting case was due to be heard in April. Now it has been delayed until October. This is to allow the defending parties - Northumbria Care, represented by Eversheds associate Guy Bredenkamp, the DoH, represented by the Treasury Solicitor, and the unions, represented by Thompsons Solicitors head of equal pay Caroline Underhill - to assess the levels of disclosure required.

Meanwhile, the fight to recover back pay from the NHS and town halls continues. Plans to introduce a series of test cases were later abandoned because no individual wanted to be first. Then the claims were grouped in accordance with their job description. But because of the way the NHS is structured, the alignment between job descriptions in different primary care trust regions is varied and it was not possible to bring representative cases.

Last week the campaign waged against local authorities suffered a blow when the Equality and Human Rights Commission withdrew its financial backing for a key case. This case was supposed to decide whether local authorities have the right to delay paying women the same as men in order to prevent men’s wages being cut.

The commission’s chairman Trevor Phillips said the sudden rise in the number of no-win, no-fee lawyers filing equal pay claims had prompted the watchdog to withdraw its support.

The solution to the equal pay dilemma is some way off. Morally, is it right that in the 21st century women are still discriminated against in their pay packets? The answer is no.

In order to right the wrongs of the past each taxpayer will have to dig deep into their pockets. And the only people to be making profits from these drawn-out cases are the lawyers - on both sides.

#who is stefan cross?

Stefan Cross cut his teeth with Thompsons Solicitors, which has a long list of trade union clients.

He quit the firm in 2002 to set up his own practice in Newcastle and bring discrimination claims against his former clients. Many of his critics claim Cross was chasing the cash. But he says he suffered a stress-related breakdown after working seven-day weeks and was advised by a doctor to take it easy.

Stefan Cross Solicitors was established in 2002 and today is home to 10 paralegals, two trainees and three qualified staff. Cross is the only partner.

In 2004 he established Action for Equality, which campaigns on a local level for equal pay. It has offices in Edinburgh and Newcastle and refers work to the firm on a regular basis.