The Department of Employment conceded that ministers were unlikely to take issue with counsel's advice to the Equal Opportunities Commission based on European law.
Tens of thousands of workers, overwhelmingly women, who might qualify for extra redundancy payments and compensation for unfair dismissal, should lodge claims before 3 June, according to the Equal Opportunities Commission's advisers, although it may be possible to claim later. Part-timers who think they qualify can begin proceedings now, according to the commission's legal department.
Some employers had condemned the House of Lords decision on 3 March as a considerable burden, so the revelation that the ruling is retrospective is likely to result in even bigger protests.
The Law Lords decided by four to one that British law breached European legislation. Ministers are considering legal changes to abide by the judgment that employment protection covering unfair dismissal and statutory redundancy payments should be extended to anyone with two years' service who works eight hours or more a week. Up to now an employee who works between eight and 16 hours a week has had to work for five years to qualify.
Referring to potential compensation claims Alan Lakin, chief legal officer at the EOC, said: 'We could be talking about a lot of people. It's very important that workers should feel able to go to industrial tribunals to redress their grievances.'
Officials said the commission would not deal with the claims because they involve employment law rather than equality statute: part-time workers with a grievance should take their claims to unions, citizens' advice bureaux or other similar organisations.
Kamlesh Bahl, chairwoman of the commission, is meeting David Hunt, Secretary of State for Employment, this week to explain the commission's position, but Mr Hunt is unlikely to disagree with her assertions.
A Department of Employment spokeswoman said last night that ministers were still considering legal advice and comments from the Attorney General would be sought. The commission was 'slightly jumping the gun, but the Government is unlikely to disagree'.
The legal precedent was set by the European Court of Justice in 1976 in the De Frenne judgment against a Belgian airline. The ruling stated that sex equality cases coming under Article 119 of the Treaty of Rome, which refers to employment conditions, could have retrospective effect.