Row ‘may cost Shropshire Council £162m’

Saturday 30th July 2011, 11:29AM BST.

Shropshire Council is exposing itself to the risk of 6,500 employment tribunal claims potentially costing £162 million because of the way it is handling staff pay cuts, it was claimed today.

The council wrote to all its employees this month telling them they would be dismissed on September 30 but re-hired the next day if they agreed to a 5.4 per cent pay cut and new terms and conditions.

But now a retired local government consultant has urged the council to have a “meaningful” consultation with staff or face a potentially eye-watering compensation bill.

John Sinnott said Shirehall bosses were using a “draconian” method to slash the wage bill because of cuts imposed by the Tory-led coalition government.

In the worst case scenario, he said the council could face 6,500 payouts of £25,000 – the maximum a tribunal can award for cases sparked by varying a contract of employment – making a total of £162.5 million.

The council today defended its actions, insisting it is following a “clear legal process which has been used on numerous occasions by other organisations”.

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