Bedfordshire County Council reduced the women's wages by up to a third nearly four years ago to beat off competition in a compulsory competitive tendering exercise. The Unison public service union and the GMB general union argued that the council had breached the Sex Discrimination Act and equal-pay legislation when it cut the caterers' pay, holiday entitlements and sick pay.
Catering managers could be awarded up to pounds 15,000 because they suffered the most severe cuts, while most cooks and kitchen assistants will receive between pounds 2,000 and pounds 4,000.
Union officials estimated that the out-of-court settlement could cost the council between pounds 3m and pounds 4m.
Rodney Bickerstaffe, general secretary of Unison, said the deal was a "major victory" for women workers. "It sends a clear message to Bedfordshire County Council and other employers that they cannot arbitrarily pick on their women staff when they are carrying out compulsory competitive tendering exercises."
John Edmonds, leader of the GMB, said that the employer had tried to make his members "pay the price of privatisation".
Mary Stacey, of Thompsons solicitors, said the compensation was for loss of pay since 1994, but the settlement also meant that the women's terms and conditions had been reinstated.
Since 1994 Initial Catering Services has won contracts to operate part of the school-meals service in Bedfordshire. Both Initial and the council will now have to increase pay rates, said Ms Stacey.
Joyce Botsford, 58, a kitchen manager at a school in Leighton Buzzard, said she was "jubilant" over the settlement. "I lost about pounds 3,000 a year when the council cut my pay," she added.
A spokesman for Bedfordshire County Council said management were satisfied that a long-standing problem had been resolved. The terms of the deal were agreed between the council and the unions and were accepted by the industrial tribunal, the spokesman said.Reuse content