Pensions and Equal Pay
Here are two posts from the blog site archive which explain the significance of the battle waged by Action 4 Equality Scotland to have people's equal pay settlements paid on a pensionable basis.
As I've explained before the unions originally advised their members that this could not be done, and were not part of the dispute which went all the way to Scottish Ministers before being resolved in the claimants' favour.
As usual the unions are trying to claim credit for something when all the real work and 'heavy lifting' has been done by A4ES.
NLC Update (12/06/16)
Here's great article by Tom Gordon in today's Sunday Herald which explains the fight over pensions and equal pay that is being waged between Action 4 Equality Scotland and Labour-run North Lanarkshire Council.
The trade unions have stayed out of this battle for some reason, even though the payment of equal pay settlements on a pensionable basis results in huge benefits for the lowest paid council workers.
I plan to circulate the Sunday Herald piece around all North Lanarkshire MSPs and MPs with the aim of encouraging local politicians to join the campaign to knock some much needed sense into Scotland's fourth largest council.
http://www.heraldscotland.com/news/14551814.Council_ordered_to_pay_pension_costs_of_hundreds_of_women_it_underpaid/
Council ordered to pay pension costs of hundreds of women it underpaid
North Lanarkshire Council HQ, Motherwell
By Tom Gordon - Scottish Political Editor, The Sunday Herald
A LABOUR council is facing a £1million bill after trying to duck its pension duties to hundreds of female staff it previously tried to squeeze out of equal pay.
North Lanarkshire Council has been ordered to cough up after the Scottish Public Pensions Agency (SPPA) found it tried to “obstruct” a fair deal for almost 700 women.
The 681 women were systematically underpaid for years by the council, earning lower wages than male colleagues doing jobs of equivalent worth.
Last year, after initially forcing the authority to give them back-pay through a tribunal, they reached a second negotiated settlement worth a further £7.1m, after being represented by equal pay experts Action 4 Equality Scotland.
However, their final salary pension deals remained below those of male counterparts, as their contributions were lower while they were underpaid.
According to recent local government pension regulations, all back-pay must be treated as “pensionable”, meaning bigger pensions and bigger lump sums for those affected.
It also means errant councils must top up their employer contributions to pension funds.
However in February North Lanarkshire tried to sidestep its duties to the Strathclyde Pension Fund, which covers the female staff, by claiming the women’s second round of back-pay was actually a form of negotiated “compensation” and therefore not pensionable.
The women’s lawyers appealed to the SPPA in March, pointing out the potential differences would be profound if the back-pay was not made pensionable.
Some of the North Lanarkshire women would be denied a pension rise of £1500 a year and lump sums of more than £4000, a lifetime difference of around £50,000.
The SPPA has now ruled the council “misconstrued” the law, and criticised its arguments as “confused and an obstruction to finding an equitable solution to the disagreement”.
It said the council must pay the income tax and national insurance on the second wave of back-pay as well as employer contributions, an estimated total of £1m.
Although the women would also need to make contributions of around £360,000, this should ultimately bring them £10m in higher pensions benefits.
The council now has until August 20 to decide whether to fight the decision by launching a costly judicial review at the Court of Session.
Elizabeth Cross, 67, from Gartcosh, who retired four years ago after a decade as a home support worker in North Lanarkshire, would be £28,000 better off under the SPPA ruling.
She told the Sunday Herald the council’s refusal to pay up was “terrible”.
She said: “It’s ridiculous. This is the second time down the road. They discriminated against the women that worked for them over equal pay and now they’re doing it again over pensions.
“We should get exactly the same pensions as the men. All the girls are raging.
“The council are lucky they still have any women working for them, the way they have treated us all. It’s disgusting what they’ve done.
"Everyone in North Lanarkshire should be kicking up about the money the council are wasting trying to get out of paying us what we’re owed.”
Lawyer Sarah Gilzean of HBJ Gateley, who represented the women’s case to the SPPA, said: “We think the SPPA decision is unequivocally in our favour.”
Stefan Cross QC, of Action 4 Equality Scotland, said: “I find it incredible that a Labour-run council has been fighting tooth and nail to deny low-paid women workers the right to equal treatment under the Local Government Pension Scheme. If North Lanarkshire had got its way, some of the council's lowest paid workers would have been penalised for the rest of their lives.
“We welcome the landmark decision of the SPPA and we are calling on North Lanarkshire to face up to its obligations, accept this decision and do everything they can to ensure the lowest paid council workers are able to maximise their pension benefits."
A spokesman for North Lanarkshire Council said: “We note the decision of the Scottish Ministers in this case. We are examining the decision and will reach a view on our next steps in due course. However, the council remains committed to equality and has settled more than £100m of claims. We will continue to do so where these are justified.”
North Lanarkshire Update (14/06/16)
I've written to all MSPs and MPs in North Lanarkshire regarding the ongoing dispute over pensions and equal pay.
Because this a really big deal for the people involved and if you ask me, it's a disgrace that low paid workers are having to fight so hard to achieve equal treatment under the Local Government Pension Scheme.
North Lanarkshire's 'male comparator' jobs don't have this problem and nor do the Council's senior officials.
Dear MSP/MP
NLC, Pensions and Equal Pay
Here's a post from my blog site about the ongoing dispute over Pensions and Equal Pay in North Lanarkshire Council.
I also attach a briefing note I supplied to Tom Gordon at the Sunday Herald which explains that there are, in fact, two categories of claimant, i.e. 1st and 2nd Wave.
North Lanarkshire Council has been dragging its feet over the 1st Wave claimants for more than a year and while the Council has until August 2016 to decide to appeal the 2nd Wave judgment, via a judicial review to the Court of Session, the right thing to do surely is to accept the SPPA decision and the principle of equal access to the Local Government Pension Scheme.
I will be encouraging A4ES clients to contact their MSPs and MPs for support and if you require any further information on these issues, please drop me a note at: markirvine@compuserve.com
Kind regards
Mark Irvine
Briefing note for the Sunday Herald
1 Two categories of claimants exist - 1st Wave and 2nd Wave
2 The 1st Wave claims relate to the period prior to the introduction of new job evaluation based pay arrangements in 2007 - the 2nd Wave claims related to the period after the introduction of JES in 2007.
3 The 1st Wave claims have been adjudicated by a formal decision of the Glasgow Employment Tribunal in May 2015 - North Lanarkshire Council accepts that these claims can and should be made pensionable if the claimants wish so, but over a year after the ET decision the Council has still not actioned people's requests, having deducted employee NI contributions from claimants' awards.
4 The 2nd Wave claims have been achieved by a negotiated settlement (rather than an ET award) and this is the issue that was tested by the Scottish Public Pensions Agency (SPPA). NLC's position is that although the settlement represented 'arrears of pay' they should not count for pension purposes - and that position was rejected by the SPPA on behalf of Scottish Ministers.
5 A total of £218,000 in NI contributions was deducted from A4ES clients as part of the 1st Wave award, but only 35 of these clients would benefit from having their awards paid on a pensionable basis because of the final salary year pension rules and the fact that NI deductions are mandatory, even if the individual benefit derives no direct benefit from their NI contributions.
6 The 35 A4ES clients who would benefit from their awards being made pensionable have already had £27,000 deducted from their settlement awards but have gained no benefit from these payments even though some have been retired for years - NLC is required to pay an additional £65,000 but over a year later people are still waiting on the Council getting its finger out and pass both employees and employer contributions (£92K) to the Strathclyde Pension Fund.
7 Of the total number of 2nd Wave claimants 681 would benefit from their settlements being made on a pensionable basis - the total cost of this to the claimants would be £360,000 and to NLC £915,555 - by way of additional NI employee and employer costs.
8 The total lifetime benefit to the claimants (collectively) would be in excess of £10 million because of the increased lump sum and annual pension benefits - and these benefits are already enjoyed by equivalent NLC male workers, of course. The additional lump sum (tax free payments) to 2nd Wave claims, for example, is worth around £800,000.
9 I have spoken with two A4ES clients who are willing to be interviewed and have their photos taken - W who is a 1st Wave claimant and C who is a 2nd Wave claimant, both are retired.
10 Action 4 Equality Scotland has been pursing this issue on its own up until now, i.e.. without any support from the trade unions, although hundreds of union members stand to benefit from the recent SPPA ruling as well.
I'll give you a ring later today to discuss how you want to proceed and I can provide further comments via Stefan Cross QC and Sarah Gilzean at HBJ Gateley, the solicitors acting for A4ES clients.
Regards
Mark
