The money will be shared between the 5,000 affected members of staff, who are expected to receive hundreds of pounds each.
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Unison took the case to court on behalf of nursery staff, teaching assistants, administrators and other staff employed by the Royal Borough of Greenwich, after the council failed to calculate their annual leave properly. This meant that some staff had been losing up to five days’ pay a year.
The union brought employment tribunal claims on behalf of 476 term-time only staff, arguing under European law that they had been unlawfully treated less favourably than colleagues owing to their part-time status.
It followed the move by Greenwich council six years ago to change the contracts of staff working in its nurseries and schools from full year to term-time only. The error was first identified by cleaner Julie Stedman from Plumstead when her contract changed in June 2012. She realised her pay was around £35 short a month.
A settlement, worth approximately £4m, was agreed by the council at the end of last month. Councillors also agreed to revise the formula to calculate holiday allowance and pay the correct rate, backdated to 1 January 2013.
While the case brought by Unison only involved 476 workers, the corrected formula and back pay will apply to all 5,000 term-time only staff employed by the council.
It is understood that the settlement will be paid before the end of the year.
Commenting on the outcome, Unison’s assistant general secretary Christina McAnea said, ‘This is a victory for all low-paid women working in the public sector. What started out as just one case could soon be having an impact far beyond South East London.
‘Laws that began life in Europe have enabled Unison to restore justice and ensure that all part-time workers in the Royal Borough of Greenwich are paid the correct holiday pay for the jobs they do.
‘Other employers may have made similar errors with their holiday calculations. If they have, we will be on to them to make sure all term-time staff are paid what they’re due.’
Councillor Chris Kirby, formerly cabinet member for human resources at the Royal Borough of Greenwich, said, ‘There were around 18 different formulas being used by all councils across the country. Only one of those formulas can be correct. We started negotiations with national unions on this two years ago and have been able to work with our partners and our staff to come up with a proposal that works for them. It’s a proposal that they are happy with and that is sustainable and doesn’t threaten frontline jobs.’