1,600 equal pay claims could risk council issuing bankruptcy notice if they succeed
About 1,600 equal pay claims have been lodged against Brighton and Hove City Council, citing potential gender pay inequality.
The GMB union announced that it was lodging an equal pay claim in June last year but took some months to provide details.
Since receiving the claims, the council has taken legal advice on potential gender pay inequality.
And the council's external auditor Grant Thornton flagged up the legal claims as a financial risk in its latest report to the council's audit, standards and general purposes committee.
The auditor's findings were included in a report to the committee at Hove Town Hall on Tuesday (June 24).
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It said: 'The council has a job evaluation scheme against which all jobs are evaluated and keeps under review its pay and allowances structure.
'The council considers that the claims are defensible and has commissioned external legal advice to undertake detailed analysis and advise the council on potential defences or any potential risks they may pose.
'This process is likely to take at least two years.'
The council's gender pay report last year found that women employed by the council earned more than men and made up more of the workforce.
The mean hourly pay for men was £18.46 while women were paid £19.78 – a pay gap of minus 7.2 per cent.
The median hourly rate was narrower, with men earning £17.12 an hour and women £17.63 – a minus three per cent difference.
Even though pay had increased for all, the negative gender pay gap remained unchanged from the previous year.
Labour councillor Josh Guilmant asked how often the council reviewed the situation and if officers were waiting to hear from lawyers about the risk levels.
Interim chief finance and property officer John Hooton said the court process had yet to start.
When it did, he said, it would help the council to understand the full nature and number of claims and whether they were valid.
He said: 'This will become clearer as those claims go through the process of court over the next couple of years.
'We are likely to see a court case in the autumn which will start to clarify this but, at this stage, we do not have sufficient information to be clear about the potential liabilities.'
Should the claims succeed, they could put the council at risk of having to issue a 'section 114 notice', effectively a bankruptcy notice, if the council proved unable to meet its financial liabilities.
The council currently held free reserves of £8.2 million – down from the minimum recommended level of about £9 million and lower than most similar councils.
The Labour deputy leader of the council Jacob Taylor said that, as a percentage of the budget, Brighton and Hove had one of the lowest levels of reserves – or working balances.
The council had drawn on its reserves to fund a budget shortfall before Labour won the last local elections, Cllr Taylor said, but this would be repaid early from last year's underspend.
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