The GMB union indirectly discriminated against female public-sector workers at Middlesbrough Borough Council when it prioritised pay protection for male union members, the Court of Appeal has ruled.
The female workers at Middlesbrough Borough Council sued the union for negotiating an equal-pay deal with the council, which they felt was discriminatory.
An Employment Appeals Tribunal had originally overturned the tribunal’s decisions that the treatment was discriminatory, saying that the union had a legitimate aim. This was over-ruled by the Court of Appeal, which ruled that while the aim was legitimate, the way the union went about achieving the aim was wrong, as female workers were forced into a deal that they may not have otherwise agreed to.
It ruled that the union had failed to properly advise its members about not being compensated for back-pay and had focused only on equalising future pay.
The GMB union is now likely to compensate its members. Ranjit Dhindsa, employment partner at Reed Smith, said: “That sum of money could potentially be huge – millions rather than thousands. The unions are also more likely to go to litigation in the future so that they can't be accused of just doing deals with employers.
“Indirectly, employers will pay because of this approach that unions could take in the future. Unions should be very worried now about doing any deal without giving members all the options and going on the members’ final say.”
James Baker, solicitor at City law firm Macfarlanes, added: “We can expect similar pay deals to come under the judicial microscope as a result.”
Mandy Laurie, partner at Dundas & Wilson, said that while the case related to the complex, long-running equal pay disputes, the decision is likely to have a wider impact on the workplace.
“Recent press coverage has indicated that, as a consequence of the credit crunch, there are signs of unions reverting to a 1970s style of industrial relations, with council strike action bringing much of England and Wales to a standstill yesterday and more unrest on the horizon,” she said.
“The Allen decision could prove to be a further nail in the coffin for the collaborative approach assumed by many unions and employers in the 21st century. There is a risk that, moving forward, unions will take an adversarial and polarised approach to collective negotiations, disregarding the ‘bigger picture’ as portrayed by the employer, for fear of claims from their members.”