Wednesday 15 September 1999

Advocate General provides opinion in Part-time pension rights case

The Advocate General has delivered his opinion in Shirley Preston & otrs. v Wolverhampton Healthcare NHS Trust.

This is a test case brought by 22 of 60,000 applicants to the employment tribunal, who have challenged certain time-limits in the Equal Pay Act 1970 for bringing claims seeking full membership of occupational pension schemes for part-time workers.

The ECJ held in 1994 that it was contrary to Article 119 (equal pay for men and women) to exclude part-time workers from occupational pension schemes.

The Equal Pay Act 1970 states that part-timers could only bring claims seeking retrospective instatement into a scheme within six months after termination of employment, and that any instatement was limited to contributions for a two-year period before such claims were brought.

Both these time-limits were challenged by Mrs Preston (and others).

The Advocate-General's opinion provides:

(1) The six-month time limit (i.e. claims have to be brought within six months of termination of employment) is lawful, in the interests of legal certainty; but that

(2) The two-year time limit (i.e. limiting compensation to the value of two years' benefits) was not lawful, and that part-time workers were entitled to backdate their pension claims to 8th April 1976 (the date of the ECJ's first judgment upholding the direct effect of Article 119).

The Advocate General considered that workers will only be able to secure retrospective membership of pension schemes if they first pay the contributions due in respect of all the periods of part-time work for which they seek recognition.

The judgment from the ECJ should follow in a few months (the Advocate General's opinion is not binding, albeit it is usually followed), and the House of Lords will then deliver judgment.

It is estimated that the ruling, if followed by the ECJ, will cost UK industry between £10billion and £17billion. Some 60,000 part-time workers will be entitled to pay in a few thousand pounds and receive back several times that amount in pension rights.

No comments: