BACK TO HOME
PAGE BACK TO HOME
PAGE EUROPEAN REVIEW
A recent verdict at the European Court of Justice has been hailed as a victory by thousands of part time workers in the United Kingdom who have been excluded from pension schemes, but the complex ruling means that the full consequences are difficult to foresee.
On the 16th of May the European Court of Justice delivered its verdict in case C-78/98 (Shirley Preston and others v Wolverhampton Healthcare NHS Trust and others and Dorothy Fletcher and others v Midland Bank plc). This was a test action on behalf of about 60,000 British workers who had brought complaints to Industrial Tribunals on the basis that they had been excluded from occupational pension schemes because their jobs were part time. Between 1986 and 1995 many pension schemes in the UK were amended to allow part-time workers to join but it remained unclear how far back retroactive claims could be made. As in other cases that we have reported in these pages the action relies on the fact that more women than men work part time. Therefore, the employees say, if part-timers are discriminated against then so are women. This would be contrary to article 119 of the treaty of Rome which established the European Community and forbids such discrimination. In 1994 the Court ruled held that the exclusion of part-timers from access to such schemes constituted indirect discrimination contrary to Article 119 if it affected a greater proportion of women than men, and that Article 119 had direct effect, which meant that any claims in this area might be backdated to 8 April 1976 (the date of the judgment in Case 43/75 Defrenne v SABENA, in which it was held for the first time that Article 119 has direct effect).
However the problem which the British complainants had was that industrial tribunals and the appeal tribunal had both ruled that 1) if the pension scheme concerned had been amended to allow part-timers to join more than two years prior to them bringing a claim, UK law (the Occupational Pension Regulations) did not allow retroactive claims 2) if the claimants had ceased employment more than six months prior to bringing the claim UK law (the Equal Pay Act - EPA), did not entitle them to recognition for earlier part-time service and 3) if the claimants worked for the same employer under successive contracts UK law held that claims must be made in the six months following the end of each contract. A total of 22 cases were selected to be taken to appeal in the House of Lords and eventually to the ECJ. In its ruling the Court said that, in essence, 1) and 3) were not compatible with EU law but that 2) was compatible. This would appear to open the door to claims by the 60,000 employees that could in theory relate to service backdated to 1976. According to some estimates, the total cost of awarding these pension benefits could run to as much as £17 billion, with the majority of the part-time workers affected employed in banking, the National Health Service and local education authorities. However, this overall cost is likely to be significantly less than this, firstly due to the fact that if schemes were contributory, the employee must also pay the relevant back-payments in order to receive the full benefits from the employer.
There are also further complications in some of the issues that the European Court referred back to the House of Lords. Because EU law says that national laws cannot be more favourable in one area than another e.g. the Equal Pay Act cannot be less favourable than the Sex Discrimination Act or the Race Relations Act , the House of Lords must decide how to alter it. Until they make their decisions it is difficult to predict how many workers will benefit and how much it will cost.
http://curia.europa.eu/jurisp/cgi-bin/form.pl?lang=en
In a case related to those considered in more detail in the article adjacent, the Court has decided that backdated claims for inclusions in pension schemes by part-timers may go back beyond the 1976 date mentioned there. A Ms. Lilli Schroder had worked for Deutsche Telekom from 1975 to 1994 but had been excluded from their pension scheme until 1991 because she worked part time. On retirement she claimed a pension entitlement backdated to 1975, the entire period of her work for the company. Although (see this page) claims under article 119 of the treaty of Rome, which forbids such discrimination, do not allow backdating beyond 1976, the court ruled that because the collective agreement in Germany included no such restriction Ms. Schroder was right to apply back to 1975. It is possible that this judgement could allow the British claimants to backdate their claims further.
Two midwives working in public health in Sweden, Ms Ellmén and Ms Wetterberg wanted to be payed at the same rate as Mr Persson who is a clinical technician in the same hospital. The county council who employed them contended that although the basic rate of pay was less for the women they were compensated by an unsocial hours allowance and a reduction in work time when a public holiday was included. The court found that each element of pay must be compared separately so as there were more women than men working as midwives the difference in basic pay fell foul of our old friend Article 119. Whilst it may be that differences in pay rates can be justified for other reasons than discrimination (such as differences in hours) it is up to the employer to prove this.
|
Back to |
Forward to |
Up to |
Back to |
