A LANDMARK employment decision is likely to save UK local authorities hundreds of millions of pounds.

A 46-page judgement from The Employment Tribunals has ruled that Redcar and Cleveland Borough Council was right to offer staff compensation as part of an equal pay deal, in return for a commitment not to take it to an employment tribunal.

A solicitor acting for some of the workers had claimed the council was breaking employment law by seeking the pledge not to take action.

Lawyer Stefan Cross encouraged them not to accept the offer because he felt a tribunal would award a much higher figure.

The council's cabinet member for corporate resources, Councillor Glyn Nightingale, said: "The decision removes the threat of a £20m bill that would have had to be met by our council tax payers.

"This is a landmark decision for councils across the country. We estimate, across the North-East and Yorkshire, the bill would have been in the region of £900m.

"The tribunal found unanimously that the council acted lawfully in all respects in its compensation scheme, when it introduced equal pay at the beginning of 2004.

"We were the first council in the North-East to introduce it and all councils are in the process of following us."

Lynne Robson, head of local government for Unison's northern region said: "The trade unions have worked tirelessly to achieve a negotiated settlement over equal pay in Redcar and Cleveland.

"This decision fully vindicates our approach and will lead to greater job security."

There were four hearings for the tribunal, at Thornaby, with five sample witnesses, including care workers and cooks, represented by Mr Cross.

The council has given compensation to more than 2,000 members of staff, up to a one-off payment of £6,200.

Mick Brodie, the director of the North East Regional Employers Organisation, said: "This decision really supports and upholds good industrial relations in local government."