This piece first appeared in Saga Magazine in July 2000
The text here may not be identical to the published text

Pensions Victory for Part-timers


European equal rights ruling will benefit thousands

 

More than 60,000 people, mainly women, who worked part-time before 1995 may now be allowed to join their employer’s pension scheme, and backdate their membership – in some cases back to 1976. However, tens of thousands of other women, in exactly the same position, will find that legal technicalities mean it is now too late for them to take action and backdate their pension rights.

A judgement in the European Court of Justice on May 16 2000 finally brought to an end decades of legal wrangling to get equal rights for women at work. The decision means that many women who were excluded from their employer’s pension scheme in the past will now be able to join it. The people affected are almost all women who worked part-time at some time between 1976 and 1995 (when all part-timers should have been allowed equal access to pensions schemes). These women were not allowed to join their employer’s pension scheme at the time simply because they worked part-time. Now, they can join and backdate their membership to the start of their employment – though no-one can backdate it to before April 1976.

That means both they and their employer will normally have to pay into the pension scheme for those years and, when they retire, they will get a pension on equal terms with other employees. However, there are some big problems with the court’s decision.

First, a claim for equal treatment has to be made within six months of leaving a job. So women who retired or left a job more than six months ago and have NOT put in a claim will not be able to use the judgement to get their pension. The European Court specifically allowed this six month time limit to remain.

Second, women who worked for less than two years for the same employer will almost certainly have no pension rights – that is normally the minimum time needed to earn rights in a scheme.

Third, the ruling will only apply where the part-time worker can show that there was an equivalent full time worker of the opposite sex who was allowed to join the scheme. That is not always possible. Though anyone who has registered a claim through a union or a solicitor already should have that sorted out.

Fourth., the judgement gives women who can jump through all these hoops the right to join the pension scheme. In many cases, that means there will be contributions to pay right back to the start of their employment. Women who are still some years from retirement will have to raise the money to pay the contributions but will not get any benefits for some time. However, this problem will not apply to many people who worked in banking and insurance where pensions tend to be paid for entirely by contributions from employers.

Finally there is still some doubt over the backdating. Some lawyers, who after all make their living at this sort of thing, believe that the general rule in English law which prevents an action going back indefinitely will restrict the backdating period to six years rather than allowing it to go right back to 1976. The House of Lords is expected to rule on this point in the next six months.

So suggestions in the press that the cost to employers could run into billions of pounds are certainly wrong. Lawyers at the City pensions law consultants William M. Mercer say the cost is more likely to be around £100 million. Much of this will be paid by the banks and the public authorities which were guilty of the discrimination.

How it happened

The history of this case shows what is good – and bad – about European law. It has come to a conclusion which will help thousands of people get fair treatment. But it has taken such a long time that many people will not get the justice they should have had if the law had been applied properly all along.

The European Court of Justice first established in April 1976 that it was unlawful to discriminate between people in employment matters solely on grounds of their sex. From the date of that case, equal pay for men and women was part of EU law. However, no arrears of pay could be demanded before the date of the judgement – so there is an absolute bar on backdating under European law before April 1976. But from that time if a man and a woman were doing the same job, they had to be paid equally.

Then the question was asked – what about pensions? Were they pay? The court said they were. Pensions and the access to them were as much pay as the ten pound notes at the end of the week. That meant you could not allow men into a pension scheme but exclude women. So far so straightforward. But what about part-time workers? If you denied both men AND women part-timers access to the pension scheme was that lawful? Many employers thought it was and many banks, local authorities, energy companies, and others denied their part-time workers the right to join the pension scheme.

But then trade unions and their lawyers pointed out that almost all part-time workers are women. So if employers discriminated against part-timers they were discriminating against women. Judgements in 1986, 1990, and 1994 agreed with this point of view, and the court established the concept of ‘indirect sex discrimination’. In other words if you discriminated against a group that was mainly male or mainly female that was sex discrimination and unlawful. As part-time workers were mainly women, discriminating against them in pensions or other rights at work was as unlawful as saying ‘no women here’. The courts also held that the claims could be backdated to that first sex discrimination decision in 1976. But, the judges said, if there was a national time limit for backdating which was less generous, then that could be used instead.

In the UK our Equal Pay Act did indeed specify a much shorter time limit. Under the Act a claim for equal pay cannot be backdated more than two years from the date of the claim. It also says that a case has to be brought within six months of the person leaving the employment where the discrimination occurred. The effect of the Act was to undermine the European court judgement as most women would get no benefit unless their claims went further back than two years. So further cases were taken to court to challenge this judgement. Two cases, one decided in December 1997 and another which was settled in February this year, failed to achieve this, and still left the law in a muddle. Finally, on May 16 2000, the European Court of Justice gave its judgement in two cases against an NHS trust and against Midland Bank. The judges held that the two year limit was not lawful. It now remains for the House of Lords to decide if that means pension rights can be backdated as far as April 1976 or if they are limited by a general six year prohibition. And the European court accepted the other time limit – that cases had to be brought within six months of the person leaving the job. That ruling seems likely to prevent the claims of many thousands of women from succeeding.

What to do

If you are a woman who worked part-time between 1976 and 1995 and were not allowed to join your employer’s pension scheme write to your employer (or ex-employer) and ask about your rights under European law. Give the details of this case which is called Preston and others versus Wolverhampton Healthcare NHS trust and others in the European Court of Justice on 16 May 2000, case number C-78/98. if you still work for the employer or have left only within the last six months it is not too late to make a claim now. If you made a claim in the past while you were still working for the employer or within six months of leaving then you should also still be able to act under that claim. However, if you left your job with the employer who discriminated against you more than six months ago and you have not already put in a claim, you are unlikely to be able to bring a claim. If you are in this position you should seek advice from your trade union or from a Citizen’s Advice Bureau. If you are one of the 60,000 women whose cases are already registered, seek advice from the solicitor or union which encouraged you to claim in the first place.


Rules that broke the law

The European Court of Justice considered 22 specimen cases out of more than 60,000 registered with the courts in the UK. These cases concerned five pension schemes. They are not the only ones which broke the law. But they are good examples of the different and confusing schemes which major employers used to discriminate against part-time workers. It does not matter if you worked for these employers or for others. If they broke the rules you have a good case, as long as you fit within the remaining time limits.

 

· The NHS Pension Scheme – people who worked half-time or less excluded from the pension scheme until April 1 1991

· The Teachers’ Superannuation Sceheme – hourly paid workers excluded until 1 May 1995

· Local Government Superannuation Scheme – people working less than 30 hours a week excluded until April 1 1986 and those working less than 15 hours a week excluded until January 1 1993.

· Electricity Supply (Staff) Superannuation Scheme excluded people who worked less than 20 hours a week until April 1 1988.

· Midland Bank Pension Scheme excluded all part-time workers until January 1 1989 and some until September 1 1992.

 

July 2000


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