16-July-2008

HR e-briefing 370: Court of Appeal rules that union discriminated against female members

In June 2006, the Tribunal delivered a judgment that was critical of the GMB. It upheld claims brought by five test claimants that the union was guilty of indirect sex discrimination in pushing the claimants to settle their equal pay claims against Middlesbrough Borough Council on terms it had negotiated with the local authority, without telling the claimants how much compensation they were likely to recover if they were to pursue their claims through an employment tribunal.

Twelve months ago the EAT reversed that ruling. The EAT was of the view that, even if the union did mislead its female members, its actions were justified.

Court of Appeal

The Court of Appeal held that the EAT was wrong to allow the Union's appeal.

In reinstating the tribunal's ruling, the appeal court noted that the union did have a legitimate aim in mind when addressing the equal pay claims, ie protecting the existing pay of other (mostly male) members of staff and pay levels for all staff for the future. Nevertheless, if, as the tribunal had accepted, the union could only achieve this objective through inappropriate means, it could not justify its actions.

Comment

While the Allen case focused on the issue of public sector equal pay, the implications of this ruling are much more wide-reaching. This judgment will make trade unions very cautious about the way in which they enter into agreements with all employers. Before an agreement is signed on the dotted line, it will need to be scrutinised for any red flags of indirect discrimination, and care will need to be taken by unions in their communication with members, even when seeking endorsement from the membership to accept an offer or deal.

The case also has immediate financial implications for the union concerned.

The Court of Appeal's decision in this case paves the way for women who have settled equal pay claims on the advice of their union to recover compensation from the union itself. Claims are also likely to be brought against certain other unions on a similar basis.

The level of compensation due is something that will be determined by an employment tribunal. Claimants will no doubt be seeking to recover the difference between the true value of their claim and the amount that the union advised them to settle at, as well as compensation for injured feelings.

At the time of the tribunal's judgment two years ago, media reports estimated the potential value of the award in Middlesbrough alone at £1 million. If possible claims against other unions are taken into account, the total cost to the trade union movement could be considerable.

Having said that, the calculation of compensation in these claims will raise a number of complex issues, such as whether a different approach by the unions would have made any difference to the outcome or resulted in a 'better' deal for the claimants. This is something tribunals will consider in due course.

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