Law Report: Part-time workers cannot claim over lost pension rights

LAW REPORT: 13 March 1997
Preston and others v Wolverhampton Healthcare NHS Trust and others; Fletcher and others v Midland Bank plc; Court of Appeal (Lord Justice Waite, Lord Justice Otton, Lord Justice Schiemann) 13 February 1997

Women part-time workers who had not until recently appreciated or been advised that their exclusion from occupational pension schemes was unlawful under European Community law were nevertheless time-barred from pursuing complaints after the expiry of the six-month limitation period imposed by section 2(4) of the Equal Pay Act 1970.

The Court of Appeal dismissed appeals by a number of women employees against preliminary rulings by the Employment Appeal Tribunal.

The women claimed that as part-time or former part-time employees, doing jobs predominantly done by women, they were indirectly discriminated against by being denied access to contributory and non-contributory pension schemes for which full-time employees were eligible. This was done by making membership of the schemes conditional upon a minimum number of hours worked per week.

Such discrimination was permissible under domestic law until the coming into force of the Occupational Pension Schemes (Equal Access to Membership) Amendment Regulations 1995. Before then, though permissible under domestic law, it was unlawful under European Community law (see Vroege and Fisscher (Case C-57/93) [1994] ECR I-4541).

Right of access to a pension scheme has been held to constitute part of pay for the purposes of article 119 of the EC Treaty, under which member states "shall . . . maintain the application of the principle that men and women should receive equal pay for equal work", and of the Equal Pay Directive (75/117/EC).

The question was whether the existence of the six-month limitation period for equal pay claims under section 2(4) and the two-year limit on compensation in section 2(5) of the Equal Pay Act prevented the employees now enforcing rights under community law of which, during the relevant periods, they were unaware they possessed.

John Cavanagh (Unison, Graham Clayton, Reynolds Porter Chamberlain, Michael Scott & Co) for the employees in the first case; Genevra Caws QC, Clive Lewis and Tim Kerr (Eversheds, Norton Rose, Manchester City Council, Stockport Metropolitan Borough Council, Wolverhampton Metropolitan Borough Council, Birmingham City Council, Lancashire County Council) for the employers; Jane McNeill (Lawford & Co) for the employees in the second case; Patrick Elias QC and Jason Coppell (Booth & Co, Leeds) for the employers. Nicholas Paines (Treasury Solicitor) for the Secretary of State.

Lord Justice Schiemann said the fact that there had not until recently been widespread appreciation of the fact that community law gave a right not to be discriminated against in respect of pension schemes did not mean that it was impossible in practice to start proceedings within the six-month limitation period imposed by section 2(4) of the 1970 Act, so as to justify the court disapplying the limitation provisions.

The appellants had always been possessed of the relevant rights and could have asserted them. As a matter of English law, the courts would have to give precedence to any directly effective community right and disregard any provision of domestic law purporting to exclude or limit that community right: see Biggs v Somerset [1996] ICR 364 at 374 to 376.

In relation to the two-year limit on back compensation for lost pay under section 2(5) of the 1970 Act, it was fair to say that anyone now trying to enter a pension scheme to which, on its face, they were denied entry years ago, would not be credited with all their years' service. But this was because they did not invoke their rights under article 119 soon enough.

They were thus in a situation which was typical of anyone faced with a limitation period who had let time slip by for perfectly understandable reasons.

Paul Magrath, Barrister