Birmingham City Council's plans to scrap paying bonuses to its own staff, axe differential overtime rates and end perks such as free parking risk putting low-paid carers below the poverty line, a union has alleged.

The Birmingham Contract - dubbed the 'Martini' contract by unions because they permit managers to demand staff work 'any time, any place, anywhere' - has been signed by only 9,000 of the council’s workforce of almost 20,000.

Taking effect from 1 November, all staff returning to work for the council after this date will be subject to the new terms and conditions by default, even if they haven’t granted written consent.

Rob Johnston, regional spokesman for Unison, which is considering industrial action over the issue said: 'There is an extraordinary amount of anger over this. Carers stand to lose £6,000 a year and will end up below the poverty line as a result.'

Council leaders have approved a pay protection plan for those hit hardest by the changes, which they maintain were necessary for compliance with the Equal Pay Act. The council would be vulnerable to legal action were varying overtime and bonus systems to be kept in place for selective groups of council staff.

Cllr Alan Rudge, cabinet member for equalities & human resources, claimed payments are being made where there is no justified business need. 'These inconsistencies and practices outside of the core contract are exposing the council to significant litigation risks,' he said.

In related moves, the council's decision to reverse controversial plans to 'lift and shift' 100 back office IT jobs to India has raised doubts into Capita's ability to drive £135m efficiency savings from its Service Birmingham joint venture.

The council is discussing a number of practical issues and contractual commitments with Service Birmingham, which employs 1,100 staff, with a view to reaching agreement as to how to discontinue the offshoring initiative.

Welcoming the council's decision not to offshore, Labour deputy leader Ian Ward questioned whether the move 'will have any impact on the savings that were expected to be delivered by the contract with Capita.'