Chief executive Geoff Bonner said if the National Joint Council scheme results were implemented over four years, half the council's staff would get a pay increase of on average£1,900, but a third would have their pay drop by an average of£2,400.
'[That] would have had an unacceptable impact on morale,' he said.
'We were prepared to believe that our existing grading system needed amendment, but we cannot accept we were that far off the mark.'
The council has agreed to reassess salary gradings on the basis of comparability with other councils.
West Oxfordshire's rejection is a major public relations blow for the scheme, which has faced criticism from the outset but is the only one the three local government unions - the T&G, GMB and Unison - deem acceptable under the single status deal.
The scheme also come under fire in Tendring DC after some senior white-collar posts were downgraded (LGC, 28 January).
In launching its equal pay campaign recently, Unison indicated that using a commercial scheme instead of the endorsed NJC system, without union agreement, could trigger union action.