Birmingham City Council has agreed to pay out more than £700 million in compensation to some of its female workers who were paid less than men for doing the same job.
The illegal practice was going on for years until the women took their employers to a tribunal. The council doesn't have the money to pay the claims so it's going to take out a huge loan which will take twenty years to pay off.
The council has warned that any services it does not have to provide by law might be cut.
Sir Albert Bore, Leader of Birmingham City Council, has said there is no other way than to look at decommissioning services in order to look for money to pay for the equal pay claims the council received today.
In addition, the council needs to save £600 million a year for the next five years.
The lawyers acting for the 170 women who brought the original case against Birmingham City Council say this marks "an historic decision".
"This is a great day for equality and for all those women massively underpaid over many years within public and private organisations.
"Birmingham Council should now do the decent thing and settle the claims. They saved money by underpaying ex-workers for so many years, and so should now stop wasting taxpayers’ money fighting court cases they cannot win."
Following the Supreme Court ruling that has given the go-ahead to former employees to launch unequal pay claims, Birmingham City Council says it is considering its options.
Lawyers say the landmark case could have "huge implications".
“Equal pay litigation until now has always been pursued in employment tribunals as these tribunals are experienced and specifically trained in dealing with such claims. In addition, there are very limited situations where costs follow the losing party, whereas in the civil court costs almost always follow the losing party.
“The Council is reviewing this judgement in detail before considering its options going forward and will be making no further comment at this stage”.
They were cleaners, cooks and carers for the council. They were on the same basic wage as male workers such as refuse collectors and grave diggers, but bonuses the women did not receive saw the men earn on average 10,000 - 13,000 more than the women.
However, scores of women who had left the council fell foul of a rule that say employees must launch tribunals within six months of their leaving a job.
They took their case to the High Court, which found in their favour in 2010 but the council appealed against that ruling.
Today the Supreme Court ruled the council has a case to answer in the High Court.
Lawyers for the group say the claim will cost Birmingham City Council £2 million - and they have another 1000 cases of former council workers who say they were also underpaid.