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Monday, March 12, 2007

Why is this happening?

So often the media report events without mentioning their real causes.

Take today's Times front page:

Hundreds of thousands of men working in the public sector are facing salary cuts of up to £15,000 a year as equal pay agreements take effect, The Times has learnt.

Compensation claims for up to 1.5 million workers could cost the taxpayer more than £10 billion and mean that male staff lose up to 40 per cent of their salary.

Another piece
on the inside of the paper follows up:

“We are trying to keep the pay bill rise across the country to 4 per cent, which will cost us £1 billion,” one employers’ official said. “If we paid the rises in full without cutting any salaries it would cost us nearer £4 billion. This is the inevitable outcome of job reevaluation."

The crisis has come to a head this month because, under an agreement struck by the unions in 2004, all town halls have to evaluate jobs and have new pay structures in place by April 1.

However, it's not until you get the little analysis box that you find out that all this chaos it is the result of a European Court of Justice ruling from a couple of years ago.

Basically the ECJ ruling set up a field day for lawyers by deciding to revise the Equal Pay Act 1970 - which allowed for two years’ back pay to compensate for different wages between women and men - by extending it to six years’ back pay.

Most town halls couldn't afford that without laying people off, so, as the Times points out, trade unions "reached compromise agreements with employers to provide three to four years’ back pay while protecting other staff from losing their jobs. Now no-win, no-fee lawyers are unpicking these agreements, on the ground that they are a breach of the EU ruling."

There is lots of classic EU stuff in this story: a totally resources-blind decision from the ECJ, followed by the unions and employers havening to construct careful compromises to stop thousands of people from being sacked, followed by the lawyers getting at it, and causing chaos.

We're all in favour of equal pay. But if the UK Government and unions were happy to come up with a realistic compromise to implement it without job losses, based around allowing two years back pay, why should the ECJ decide, arbitrarily, to change it to six? Why not three, or ten, or twelve?

Why should this call - which is all about the practicalities of implementing equal pay - be one for the unelected ECJ? Would any of our readers from the Commission like to explain why?

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