Preston & Ors -v- Wolverhampton Healthcare NHS Trust & Ors

Part-Time Pensions

In 1995, a group of part-time workers claimed they had been discriminated against under the Equal Pay Act when their employers denied them access to their pension schemes. To succeed, they had to have lodged their claims within six months of the end of their employment.

Unfortunately, the House of Lords has said in Preston & others -v- Wolverhampton Healthcare NHS Trust & Others no.3 (IDS Brief 802) that a TUPE transfer triggers 
the time limit, with the result that claims brought more than six months after TUPE are time barred.

What was the background?

Known as the Preston cases for short, they concerned about 60,000 women who brought a series of test cases under the Equal Pay Act 1970 and Article 141 of the EC Treaty.

The women said they wanted retrospective access to a variety of pension schemes going back as far as 8 April 1976. The trouble was that they had been transferred to another employer under the TUPE regulations (Transfer of Undertakings (Protection of Employment) Regulations 1981) in 1992. 

The transfer did not affect their terms and conditions in any way, except for pensions, which are specifically excluded under the regulations. That meant the women had to bring their claim against their old employer (the transferor). 

But the Equal Pay Act says that claimants have to lodge their claims within six months from the end of their employment. The courts had to decide, therefore, whether the TUPE transfer had triggered the time limit. 

What did the early hearings say?

The employment tribunal said that, because pensions were excluded from TUPE, time 
began to run from the date of the transfer, so that the women were hopelessly out of time.

The employment appeal tribunal (EAT), however, disagreed and said that the six month time limit for bringing a claim against the old employer did not start running until the date that the worker left her new employer (the transferee). 

The EAT reasoned that “the equality clause in relation to pensions, said to have been breached, remains actionable throughout the period of employment (with the transferee) plus six months."

The Court of Appeal disagreed, saying that, although their contracts had transferred over to the new employer, the effect of TUPE was to remove the women’s pension rights from them. The two contracts were separate, with separate equality clauses and separate pension rights. 

What did the House of Lords decide?

The House of Lords agreed with the Court of Appeal.

It said that “a statute cannot speak with two different voices at one and the same time.” The section dealing with the time limit was clear – a claim must be brought within six months of the end of the job to which it related. And the same rule had to be applied where there had been a TUPE transfer. 

But which job did the claim relate to? The answer, said the House of Lords, “where the claim is in relation to the operation of an equality clause relating to an occupational pension scheme before the date of the transfer, is that it relates to the woman's employment with the transferor.”

Comment

This is the end of the road, however unfair, for claims brought more than six months after the date of a transfer, despite the sustained efforts of the unions involved.

The only good news is that the ruling does not apply to the many re-organisations in the health service and local government in the 1990s. 

Part-timers who have not yet submitted claims should, therefore, be made aware of the strict six-month time limit for lodging a claim with a tribunal from the date of leaving their employment. 

Unlike the recently reported FBU case of retained fire-fighters (LELR 110), these claims had to rely upon the Equal Pay Act and not the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000.