A LABOUR council is facing a £1million bill after trying to duck its pension duties to hundreds of female staff it previously tried to squeeze out of equal pay.

North Lanarkshire Council has been ordered to cough up after the Scottish Public Pensions Agency (SPPA) found it tried to “obstruct” a fair deal for almost 700 women.

The 681 women were systematically underpaid for years by the council, earning lower wages than male colleagues doing jobs of equivalent worth.

Last year, after initially forcing the authority to give them back-pay through a tribunal, they reached a second negotiated settlement worth a further £7.1m, after being represented by equal pay experts Action 4 Equality Scotland.

However, their final salary pension deals remained below those of male counterparts, as their contributions were lower while they were underpaid.

According to recent local government pension regulations, all back-pay must be treated as “pensionable”, meaning bigger pensions and bigger lump sums for those affected.

It also means errant councils must top up their employer contributions to pension funds.

However in February North Lanarkshire tried to sidestep its duties to the Strathclyde Pension Fund, which covers the female staff, by claiming the women’s second round of back-pay was actually a form of negotiated “compensation” and therefore not pensionable.

The women’s lawyers appealed to the SPPA in March, pointing out the potential differences would be profound if the back-pay was not made pensionable.

Some of the North Lanarkshire women would be denied a pension rise of £1500 a year and lump sums of more than £4000, a lifetime difference of around £50,000.

The SPPA has now ruled the council “misconstrued” the law, and criticised its arguments as “confused and an obstruction to finding an equitable solution to the disagreement”.

It said the council must pay the income tax and national insurance on the second wave of back-pay as well as employer contributions, an estimated total of £1m.

Although the women would also need to make contributions of around £360,000, this should ultimately bring them £10m in higher pensions benefits.

The council now has until August 20 to decide whether to fight the decision by launching a costly judicial review at the Court of Session.

Elizabeth Cross, 67, from Gartcosh, who retired four years ago after a decade as a home support worker in North Lanarkshire, would be £28,000 better off under the SPPA ruling.

She told the Sunday Herald the council’s refusal to pay up was “terrible”.

She said: “It’s ridiculous. This is the second time down the road. They discriminated against the women that worked for them over equal pay and now they’re doing it again over pensions.

“We should get exactly the same pensions as the men. All the girls are raging.

“The council are lucky they still have any women working for them, the way they have treated us all. It’s disgusting what they’ve done.

"Everyone in North Lanarkshire should be kicking up about the money the council are wasting trying to get out of paying us what we’re owed.”

Lawyer Sarah Gilzean of HBJ Gateley, who represented the women’s case to the SPPA, said: “We think the SPPA decision is unequivocally in our favour.”

Stefan Cross QC, of Action 4 Equality Scotland, said: “I find it incredible that a Labour-run council has been fighting tooth and nail to deny low-paid women workers the right to equal treatment under the Local Government Pension Scheme. If North Lanarkshire had got its way, some of the council's lowest paid workers would have been penalised for the rest of their lives.

“We welcome the landmark decision of the SPPA and we are calling on North Lanarkshire to face up to its obligations, accept this decision and do everything they can to ensure the lowest paid council workers are able to maximise their pension benefits."

A spokesman for North Lanarkshire Council said: “We note the decision of the Scottish Ministers in this case. We are examining the decision and will reach a view on our next steps in due course. However, the council remains committed to equality and has settled more than £100m of claims. We will continue to do so where these are justified.”