The council says the scheme to freeze incremental pay increases for staff has saved £28 million, but the final compensation costs – should it lose at the Supreme Court – are not yet known.
Almost £300,000 has so far been spent on legal fees in Nottingham City Council’s long-running row over back pay, with the final bill likely to be significantly higher.
The dispute began in 2011 when a group of around 600 council workers took the council to court over a decision to freeze incremental pay rises for staff.
Now, a Freedom of Information request has revealed that the council has so far spent £290,331.67 on the case.
This should be seen ‘in the context of the £28 million the increment freeze has saved’, according to the council.
However the council will face further fees as it is set to escalate the row to the Supreme Court – the highest in the land.
The council is also yet to pay the legal fees of the 600 workers who brought the case, which it must pay because it lost the most-recent verdict.
There have already been three court cases. It was first taken to an employment tribunal, before a new decision was issued by a further tribunal.
Last year, the case was referred to the Court of Appeal and in April, that court found in favour of the 600 council workers.
In a letter sent to the council by four trade union leaders, it has been claimed that the council has set aside £17.9 million to settle the back payments should it lose at the Court of Appeal.
The council says the scheme has saved £28 million, but the final compensation costs – should it lose at the Supreme Court – are not yet known.
The FOI request also asked what the estimated costs were for escalating the cost to the Supreme Court. The council said the “costs for appealing to the Supreme Court against the Court of Appeals decision are not known”.
The request also asked what legal fees the council will have to pay to cover the appellants’ legal costs from the Court of Appeal case, which the city council lost.
The response said: “Nottingham City Council has not been notified of any costs that have been awarded as part of the Court of Appeal case.
“These would be decided at the end of the litigation process, which is still ongoing.”
When asked about the legal fees, a city council spokesman said: “The decision to freeze incremental pay rises was made as part of the £232m of savings the council has had to make as a result of its main Government grant being cut by two-thirds since 2011.
“The decision was taken to avoid cuts to jobs and services wherever possible and has saved over £28 million since 2011, the equivalent of around 1,000 full time jobs. Had it not been introduced, further significant cuts to services and job losses would have been unavoidable.
“It was necessary to employ external legal advisors to defend a claim brought against the council. The outcome of the initial hearing was in the council’s favour; a further appeal outcome was partially in the council’s favour while a third appeal judgement went against the council.
“ Therefore, with three different decisions at three separate hearings, it makes sense to get final clarity by appealing to the Supreme Court.
“It’s important to view the cost of legal advice in the context of the £28 million the increment freeze has saved and the large number of jobs this has helped to protect.”