London University has had to pay a further Pounds 300,000 in compensation to former cleaning staff whose jobs in halls of residence were switched to private contractors two years ago.
The last payment, which gives some of the 98 redundant staff a year's pay in settlement, brings their total compensation to more than Pounds 600,000. Legal costs will run to an estimated six figures.
The payments were negotiated by Unison, which originally intended to take the cases to an industrial tribunal but instead settled out of court.
Tom Snow, Unison regional official in charge of the cases, said that the university's attempt to achieve big savings backfired. It had rejected an in-house plan that would have achieved cost reductions and kept the same standard of cleaning. He claimed that standards had deteriorated.
"If the job had been priced on the basis of legally-protected staff costs, the incentive to use contractors would have disappeared. It is students who will now have to pay in the form of higher housing costs," he said.
Most of those sacked were from overseas, many from the European Union with English as their second language and of these many were black. They were mostly women and often with spouses in low-paid work.
"Although the settlement cannot compensate for the jobs Unison members lost two years ago, the union believes the true success of the case lies in showing other universities that the cost of making a fast buck out of cheap-jack contractors is overwhelmingly prohibitive," Mr Snow said.
But Dennis Buckley, head of student services at the University of London, said that it had made savings of nearly Pounds 1 million in two years by employing the contractors.
"The main reason behind the change is to make substantial efficiency savings that could be put into the maintenance of the halls. Thirty per cent has gone into long-term maintenance, 60 per cent into recurrent expenditure and 10 per cent into reserve funds," he said.
The university had been willing to accept a plan that retained some of the staff and achieved savings, although this was not the preferred route, he said. He claimed a plan had never been formulated by the union.
Some cleaning staff had been re-employed in other areas such as catering. Students found the new cleaning staff far more satisfactory, he said.