Q What is the problem?

A. More than a million low-paid public sector workers could claim compensation payments totalling more than £5 billion because of an EU ruling on equal pay in 2003

Q. What did it say?

A. It revised the Equal Pay Act 1970, which allowed two years’ back pay to compensate for different wages between women and men by extending it to six years’ back pay

Q. Why is there a crisis now?

A. Because most town halls, unable to afford six years’ back pay, have turned a blind eye to the problem. But they reached a deal with the trade unions in 2004 under which they would complete new pay structures (and by implication back pay) by April 1, 2007

Q. Why are the unions worried?

A. They reached compromise agreements with employers to provide three to four years’ back pay while protecting other staff from losing their jobs. Now no-win, no-fee lawyers are unpicking these agreements, on the ground that they are a breach of the EU ruling and the Equal Pay Act

Q. So who is the winner?

A. Part-time female workers who have been underpaid for decades are getting compensation payments of £10,000 to £30,000, plus damages. No-win, no-fee lawyers get up to 30 per cent of the compensation payments

Q. And the losers?

A. Men and some white-collar women could lose up to £15,000 as jobs are evaluated as part of equal-pay agreements. Men are particularly vulnerable to losing bonuses, not generally paid to women.

The unions are having to pay damages where they are sued for negotiating an illegal agreement. Employers have to pay compensation for six years. As each case is successful other claims are brought, potentially crippling councils

Q. What can be done?

A. Town halls want ministers to lift borrowing limits so they can raise more capital against their assets. They also want the Government to consider changing the law so local agreements with unions can become legally binding

Q. So is the Government prepared to act?

A. Ministers are not prepared to allocate any money, but are considering the borrowing limits. They are looking at legal changes, but experts say that these could also breach the equal pay laws

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