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Council hit by £39,000 fine over fuel payments

Date: 12 September 2006

Birmingham City Council has been hit with a bill for £39,000 after being found guilty of breaching 19 workers' contracts by cutting their mileage payments.

The decision dates back to the council dumping the top of its three engine-size bandings for company mileage in a private car in 1993.

It dropped the highest of the three bands - sub-1000cc, 1000-1249cc and 1250-1450cc - without consultation, which was found to be in breach of contract. The 19 employees will each receive between £600-£3500 to cover the underpayment, and there could yet be claims from at least 50 other affected workers, all of whom have been employed since 1993. The council will also pick up an estimated £100,000 legal bill for the case, brought by the GMB union.

Prior to October 1993, a higher band four was removed with union consultation, but the removal of the third band, that formed part of employee's terms and conditions, was without consultation.

"In my judgement, the way in which Birmingham City Council dealt with the removal of the top two bands of the car-user allowance previously paid to its employees and the subsequent litigation reflect very badly on Birmingham City Council," said His Honour Judge McKenna, who presided over the case.

A Birmingham City Council spokesman said: "Any comments will have to wait whilst the judgment is carefully and fully considered by the appropriate individuals."