Change in law excludes pensions from equal pay

Thousands of low paid female council workers could be condemned to an impoverished old age after the Government quietly changed the law to stop them receiving better pensions.

Dinner ladies, cleaners and care assistants are among the workers who will be affected by the change to the local government pension scheme regulations. Under the new rules, women who win equal pay cases will no longer be able to have their pensions upgraded to bring them in line with those of male colleagues.

The change in the regulations has also been backdated to 1 April 2008, meaning that any equal pay claimant who settled their case after this date will lose any pension uplift they had secured. One of the women affected, who did not want to be named, is a clerical worker for South Tyneside council, against which she lodged a successful equal pay claim.

She was paid around £16,000 a year, whereas male refuse collectors and road sweepers judged to be doing comparable work were paid more than £20,000. She settled her claim in 2008 and received a lump sum of around £20,000 for six years' of back pay and an agreement that her pension would rise. Because her case was settled after April 2008, she is no longer entitled to a higher pension.

She said: "I just think it is scandalous that a Labour government which is supposed to be in favour of helping the low paid and tackling inequality has chosen to bring this in."

Equal pay cases have become extremely controversial and have pitted trade unions against no-win, no-fee lawyers. One of these is Stefan Cross, who has secured large payouts for his clients – most recently for the 4,000 women in Birmingham who could be entitled to share up to £600 million in compensation.

Mr Cross said: "This is a very significant change. We have been doing thousands of these cases and councils had agreed to increase these women's pensions in line with their settlements. Now the Government has changed the rules, with no consultation. I think it is absolutely staggering that a government that is introducing an equality Bill can then do this by the back door."

A spokeswoman for UNISON, the largest public sector union, said: "There is no way that working women should be discriminated [against] on pay in their working lives, and then beyond into their retirement."

A spokesman for the Department for Communities and Local Government said the change was intended to apply only to the damages element of payments made – such as compensation awarded when distress has been caused as a result of unfairness.