More than 23,000 Glasgow City Council workers are about to receive a letter telling them their employment contract is being terminated.
Nursery workers, refuse collectors, social care staff, administrators and even the council’s most senior officials will all be caught up in one of the biggest “fire and rehire” exercises undertaken by a UK public-sector employer.
The council says the workers will be offered continued employment, there should be no break in their service and replacement contracts are expected to begin as soon as the existing ones end.
The extraordinary move is the latest chapter in an equal pay dispute which has dogged Glasgow for almost two decades, cost the council around £770m in compensation and led to years of work trying to design a pay system which does not discriminate against women.
The immediate crisis emerged this week after talks between the council and its three main unions – Unison, Unite and GMB – failed to produce a collective agreement over how the new system should be introduced.
That leaves the council arguing it has to terminate existing contractual arrangements if it is to finally scrap its old pay structure.
Chief executive Susanne Millar told staff on Thursday (24 September): “Regrettably, a consequence of this position and in the absence of an agreed way forward we need to serve notice to end existing pay arrangements.”
She said the step was needed to “lawfully bring our discriminatory pay and grading structure to an end and replace it with a non-discriminatory scheme from April 2027”.
The result is that virtually every non-teaching council employee will receive notice of dismissal before being offered a replacement contract.
New contracts are expected to take effect from 1 January, although the new pay and grading system itself is scheduled to be implemented from 4 April 2027.
How Glasgow got here
The roots of the crisis stretch back to 2006, when Glasgow introduced the Workforce Pay and Benefits Review.
The system was subsequently found to have discriminated against mainly female employees, including workers in traditionally female-dominated jobs such as cleaning and catering.
In 2017, the Inner House of the Court of Session ruled that aspects of Glasgow’s pay protection arrangements discriminated against female workers.
The legal battle eventually resulted in settlements with thousands of women.
More than 15,000 historic claims were settled in 2019 for £505m, with the council funding the deal partly by selling council properties and leasing them back.
Further claims followed, and the council later recognised another £260m provision. By December 2022, the authority put the overall compensation bill at £770m.
Paying compensation was only part of the solution. Glasgow also had to create a new job evaluation and pay structure capable of ensuring employees doing work of equal value were paid equally.
Council officials and unions have been working on that replacement system since early 2018.
After repeated delays, councillors finally approved a new pay and grading structure on 20 August this year, covering just under 24,000 non-teaching employees.
The scale of the change is considerable. Around 63% of affected workers are expected to gain financially under the new structure. Around 26% are expected to see little or no change, while approximately 11% will suffer a reduction in earnings.
The biggest annual reduction is estimated at around £11,500. The council initially proposed six months of pay protection for workers losing money. That was increased to 12 months during negotiations.
That 11% of the workforce has become the central issues in the dispute. Unison says nearly 2,000 workers remain in “detriment” and argues that not enough money has been put into the new grades, allowances and pay protection to make the deal fair.
The council argues the wider structure removes unequal pay and points out that pay will increase or remain the same for around nine out of ten employees.
The £110m deal that fell apart
The confrontation intensified after further talks produced an enhanced offer this month. The council put an additional £110m towards what Unison described as “assimilation and arrears”.
GMB and Unite were prepared to put the package to their members. Unison was not.
The union said the extra money was welcome, particularly for workers owed arrears, but argued it did nothing to resolve the position of employees facing future reductions in earnings.
Unison said it wanted discussions to continue before asking members to vote. The council took a very different view.
It said the enhanced offer would have provided additional back pay and removed the prospect of dismissal and re-engagement if all three unions agreed to ballot their memberships and a collective agreement could subsequently be reached.
When that failed to happen, the council announced it would start the formal process of ending existing contracts.
Council director of communications and corporate governance Colin Edgar said the authority had “gone as far as it can”.
He added that if the unions ballot members on the enhanced terms and ultimately reach a collective agreement, the dismissal notices can still be withdrawn.
A deal between the council and unions before the process is completed could yet stop it.
Unison Scotland regional organiser Mandy McDowall said the union would ballot members once discussions had concluded and accused the council of trying to force workers into accepting a deal against an arbitrary deadline.
She said: “Clearly both sides need to keep talking to resolve matters fairly. The council’s decision to dismiss workers helps nobody.”
Unite has also warned that if the council proceeds with fire and rehire it will oppose the move.
GMB and Unite had previously said they wanted employees themselves to be given the opportunity to vote on the enhanced package.
Why 1 January matters
There is another highly significant date hanging over the dispute.
The replacement contracts are expected to take effect on 1 January 2027 – the same day stronger UK employment protections against fire and rehire are due to come into force.
Under the Employment Rights Act 2025, dismissing an employee to impose changes to certain core contractual terms, including pay, hours, leave and pensions, will generally become automatically unfair unless the employer can satisfy a narrowly drawn exemption relating to serious financial difficulties.
It is not an outright legal ban on every form of dismissal and re-engagement, and the legislation contains specific provisions for public-sector employers and local authorities.
The timing has nevertheless become part of the argument surrounding Glasgow. Unison has claimed the council sought its assistance through Acas because it wanted to act before the new workers’ rights took effect.
The council’s stated position is that the notices are required because it needs a lawful route to end the existing discriminatory arrangements if agreement cannot be secured.
There is no evidence published by the council saying the 1 January date was selected in order to circumvent the new legislation. The row is also unfolding while Glasgow faces severe financial pressure.
The Accounts Commission warned this month that the authority was at a “critical point”, facing a budget gap of at least £110m between 2026/27 and 2027/28 alongside pressures from homelessness, poverty and the implementation of its new pay system.
Unless an agreement is found, letters will land on doormats telling almost the entire non-teaching workforce of Scotland’s largest council that their existing employment is coming to an end, followed immediately by an offer to come back.