Council faces legal action over equal pay pension delay
ONE of Scotland’s largest local authorities has been warned it will be hit with a legal claim unless it immediately honours pensions promises made to female employees as part of an equal-pay settlement.
In 2016 North Lanarkshire Council was ordered by government body the Scottish Public Pensions Agency to give all women the option of having their settlements treated as pensionable pay, leaving it liable for millions of pounds in back pension contributions.
About 2,000 women chose to have their pensions recalculated, but despite paying their own additional contributions to North Lanarkshire in 2016 and 2017 are yet to have the value of their individual pensions readjusted.
For those still in work this means they do not currently know what their retirement income will be, while for those already retired it means they are continuing to be underpaid.
Thompsons Solicitors lawyer Peter O’donnell, who is representing 200 members of the GMB union who settled with North Lanarkshire, said the delay is unacceptable and if the pensions deal is not finalised by the end of this month he will be taking action on their behalf.
“If we have heard nothing by the end of March then we are looking at further action,” Mr O’donnell said.
While the council is responsible for recalculating the women’s pension benefits, those calculations must then be approved by the Strathclyde Pension Fund, which is the relevant section of the Local Government Pension Scheme.
Mr O’donnell said he would take action against one or the other “depending on where the fault lies”.
“If it’s with the council then we will sue for breach of contract,” he said. “If it lies with the pension fund then we will refer it to the Pensions Ombudsman.”
A spokeswoman for North Lanarkshire confirmed that the local authority is still working on its recalculations and has not yet passed any information or money onto the Strathclyde Pension Fund.
“The council is fully committed to meeting its equal-pay obligations,” she said.
“The volume of claims in this case, and the complexity of the information requiring to be exchanged with Strathclyde Pension Fund, means the process has taken longer than we had hoped.
“However, we are working hard to resolve any outstanding issues and expect to be able to complete the process shortly.”
At £130 million North Lanarkshire – Scotland’s largest local authority after Glasgow City Council and the City Of Edinburgh Council – has so far paid out more than any other Scottish council to settle equal-pay claims.
The pensions issue relates to the so-called second wave of claims, which came after a 2006 pay deal designed to iron out historical discrepancies between what men and women were paid for work of equal value was itself found to be discriminatory.
The amount paid out by North Lanarkshire will be dwarfed by what Glasgow is likely to have to pay to settle its own secondwave disputes.
Earlier this year Glasgow agreed to negotiate a settlement with 11,500 current and former female workers rather than continue to fight them in the courts.
It has been estimated that settling the claims could cost the council up to £500m, but that figure is likely to rise significantly because those representing the women are demanding that all back payments qualify as pensionable pay.
Stefan Cross, QC, of Action 4 Equality Scotland, which is acting for 7,500 women, said that pensions “would be the red line”, adding that if settlements are “not pensionable then we won’t have an agreement”.
Trade unions the GMB and Unison, which are each representing in the region of 2,000 Glasgow claimants, are taking the same stance.
GMB Scotland organiser Hazel Nolan said that pensions are “a huge part of our claim” because “what the women get back in pensions could be larger than their payout”.
Unison regional manager Peter Hunter added that the union would be insisting in negotiations “that the claimants get information about their rights to get it treated as pensionable pay”.