Part-timer claims - Preston 2

The Advocate General has delivered his opinion in the Preston v Wolverhampton case. The main issue for consideration was whether or not UK time limits which apply to claims by part-time employees for retrospective admission to occupational pension schemes are acceptable. Such claims are based on the grounds that excluding part-time employees amounts to indirect sex discrimination.

The Advocate General held that the requirement to bring a claim within 6 months of leaving employment was reasonable. This type of time limit is acceptable under European law as it reflects the need for certainty and to ensure that administrative decisions cannot be challenged indefinitely.

However, the 2 year limit on the amount of retrospective membership which can be granted was in his opinion unacceptable because it renders it "virtually impossible or excessively difficult" for UK employees to exercise rights granted to them under community law. This confirms the European Court's judgement in the Magorrian case and the Advocate General did not accept that this case could be distinguished in its facts.

If the European Court of Justice follows the Advocate General's opinion it appears that part-time employees could be entitled to retrospective membership as far back as April 1976. This was the date of another European Court ruling which established that Article 119 of the Treaty of Rome (which provides for equal pay for men and women) could be relied on directly by individuals.

However, employees will still need to establish that their exclusion from an occupational pension scheme amounted to indirect sex discrimination. This will involve a detailed statistical analysis of the proportion of part-timers who were women during the period of back service being claimed and how this compares to the proportion of the total workforce that were women.

If discrimination is established employers may argue that it could be objectively justified. A possible ground for this would be the administrative inconvenience of admitting part-timers.

In addition, for contributory schemes employees would be required to pay contributions for the additional period of service they are claiming.

It is estimated that there are 60,000 cases at Industrial Tribunals currently on hold pending this decision. Some of these could now be struck out if the European Court upholds the Advocate General's view that the six month time limit for bringing claims is acceptable. However a large number of claims will remain. In their observations to the Court, the UK Government estimated that the total cost of these claims to pension schemes could be tens of billions of pounds.

For further information, please contact:

Nigel Moore DDI: 0171 367 3405 [email protected]

Julia Miller DDI: 0171 367 2951 [email protected]

Mark Grant DDI: 0171 367 2325 [email protected]