The 1,500 school meals workers voted this week to accept an out-of-court settlement of around Pounds 4 million after challenging the council's refusal to include bonuses in their basic pay. The four councils which replaced Cleveland when it was abolished last year - Redcar, Stockton, Middlesbrough and Hartlepool - will share the cost.
The women, employed on a mainly part-time basis, were paid around Pounds 60 for a 15 to 20 hour week - less than male employees in equivalent jobs such as gardening, street sweeping and refuse collection. They will now receive compensation of between Pounds 600 and Pounds 5,400 each.
Nearly 2,000 women employed by the same authority were awarded Pounds 1 million last summer in a sex discrimination case after the council cut their pay in order to win a school meals contract.
Stefan Cross, the solicitor employed by the women's unions, the GMB and UNISON, said that discrimination over bonus payments was widespread and that up to 160 local authorities could now be liable to claims from some 100,000 female school meals workers, cleaners, home helps and care assistants. Cases are already being prepared against Durham, Manchester and Liverpool City Councils.
The pay discrepancy dates back to the early 1970s when men and women workers had separate pay rates under the Prices and Incomes Board. Male blue collar local government workers received 40 per cent bonuses which soon became incorporated into their normal pay.
Mr Cross said: "There was inherent discrimination in the local government pay structure. It is extraordinary that it has not been challenged until now. "
Rodney Bickerstaffe, general secretary of UNISON, which represents more than 1,200 of the women, said: "This is a landmark settlement which will have far reaching consequences for other local authorities.
"The decision establishes the principle that women manual workers are entitled to expect the same treatment as men when it comes to bonus payments. Other councils should now examine their pay rates and ensure that they do not end up with similar pay claims."
John Edmonds, general secretary of the GMB, called the settlement a victory for all women workers. "We are delighted that common sense has prevailed, " he said.