In a crucial opinion , the Advocate General of the European Court of Justice in this case says the two year back pay rule in pensions equality cases is invalid. It is highly unusual for an Advocate General's opinion not to be followed by the full court so the opinion raises the hopes of thousands of women who could gain from the decision.
Mrs Magorrian and Mrs Cunningham were denied additional pension benefits when they retired because they had worked part-time and were not therefore entitled to Mental Heath Officer (MHO) status. Only full-time Mental Health workers could be called MHOs.
Although both women had worked full-time, when their family responsibilities increased they began working part-time and lost their MHO status. If they had been MHOs for twenty years they would have the right to a pension at the age of fifty-five, instead of sixty, and the MHO service beyond twenty years would count as double for pensions purposes.
The Northern Ireland Industrial Tribunal found that there had been discrimination of grounds of sex and a breach of the Equal Pay Act. But Section 2(4) of the Equal Pay Act limits a claim to up to two years before proceedings are started.
This would mean that Mrs Magorrian and Mrs Cunningham could only add two years service as part-time workers to their earlier period of full-time service: that alone would not add up to the twenty years needed to trigger the additional benefits. In order to attain the twenty years service they would need to rely on all their part-time service.
Two questions have been referred to the European Court of Justice by the Northern Ireland Industrial Tribunal:
1 Does the two year limit amount to a denial of an effective remedy under EC law?
2 Is the claim limited to 17 May 1990 being the date of the Barber judgment and the Maastricht Protocol No. 2 which cut off pension equality claims in relation to benefits payable in respect of periods of employment before 17 May 1990: would only service after that date count?
The Advocate General is also of the opinion that the limit in the Barber judgment [1990 ECR 1-1889] and Protocol 2 to the Maastricht Treaty does not apply: the purpose behind limiting retrospective claims was because employers and pension funds were reasonably entitled to assume that different pension ages for men and women were lawful, and the financial implications of retrospective claims to the pension funds were enormous.
But employers and pension funds have been on notice since 1976 and de Frenne v Sabena No. 2 ([1976] ECR 175 43/75) that Article 119 had direct effect and could cover both the right to belong to an occupational pension scheme and the right to receive benefits. The type of discrimination experienced by Mrs Magorrian and Mrs Cunningham was clearly covered by Article 119 and the employer is not entitled to rely on the Barber limitation.
Also, since the unfair treatment relates to admission to MHO status, rather than simply the right to benefits payable, the Barber limitation does not apply. The Advocate General's reasoning follows the case of Dietz [1996] ECR 1-5223 and reduces the impact of the Barber limitation.
The Advocate General's opinion states that the two years back pay limit makes it impossible in practice for Magorrian and Cunningham to exercise their right to an equal pension. Therefore national courts - in this case the North Ireland Industrial Tribunal - should simply ignore Section 2(4) of the Equal Pay Act and calculate the losses back to 8 April 1976.
If the European Court of Justice confirm the Advocate General's opinion in their judgment in this case, it will affect the rights of thousands of the part-time pensions cases on hold at Industrial Tribunal. Other issues remain unresolved, for example the six month time limit for bringing claims and whether the two year limit is involved for other types of Equal Pay cases, or just pensions cases. Levez and Preston & Ors will clarify some of the outstanding issues. But in the meantime, the future is looking wiser.