Government could face bill for redundancy payments

THE Government is facing thousands of compensation claims under European law from part-time workers.

It was originally thought that employers would bear the burden of a recent House of Lords judgment which allows claims dating back to 1976.

Under the ruling, part-timers, who are overwhelmingly women, could qualify for extra redundancy payments and the right to claim unfair dismissal.

The law lords ruled that under European statute, employment protection should be extended to anyone with two years' service who works eight hours or more a week. Until that judgment, an employee who worked between eight hours and 16 hours a week had to work five years to qualify.

It has subsequently been argued by the Equal Opportunities Commission, and accepted by Department of Employment officials, that the decision can be applied retrospectively over 18 years.

Nicholas Nicol, a barrister specialising in employment law, together with legal advisers at the Equal Opportunities Commission, now contends that the Government could bear the brunt of the litigation because of its failure to implement European law.

Senior lawyers point to the Francovich judgment by the European Court, which ruled that Italian employees should be paid compensation by the state because their country's legislation did not abide by European directives.

The new rights afforded to part-timers poses a fresh challenge to ministers over their policies affecting women. The Ministry of Defence is taking legal advice over an award of up to pounds 500,000 compensation to a major forced to leave the Army when she became pregnant.

The award follows a 1990 ruling by the European Court that the policy of dismissing pregnant women from the services was unlawful. The MoD has since received 4,000 compensation claims, of which 1,929 have been settled at a cost of pounds 10.3m.

While claims from part-timers are unlikely to prove as expensive for the Government because of low wages, more court action will prove highly embarrassing.

The increased protection for part-time workers is also a measure of the increasingly wide-ranging nature of European statute despite Britain's opt-out of the social chapter of the Maastricht treaty. A Department of Employment spokeswoman said yesterday that ministers were still considering the situation. The department has become more circumspect about the issue since an official told the Independent last month that the Government was unlikely to take issue with the law lords' ruling or the revelation that it could be applied retrospectively. People who thought they might have a claim were advised to take legal advice.

Lawyers at the Equal Opportunities Commission believe part-timers should lodge claims by 3 June, although it may be possible to claim later.

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