Preston v Wolverhampton Health Care NHS Trust, Secretary of State for Health and others (EAT, unreported)
September 1996 marks the second anniversary of the European Court of Justice six pack of pension equality cases. Amongst those were the cases of Vroege and Fisscher which held the right to join an Occupational Pension Scheme fell within Article 119 of the Treaty of Rome and was not affected by the limits on retrospective claims for pensions equality set out in the Maastricht Treaty and Barber v Guardian Royal Exchange [1990] IRLR 240.
As a result more than 60,000 IT applications have since been lodged by part time workers who have at some stage during their employment been denied access to an Occupational Pensions Scheme. Of those 60,000 all but 22 cases have been stayed in tribunal while the case of Mrs Preston and 21 others are being pursued as test cases to establish a number of preliminary points, mainly to do with the time limits for bringing a claim, and the extent to which back payments of pensions contributions can be claimed.
It is important not to lose sight of the main achievement of the Vroege and Fisscher cases and Bilka-Kaufhaus before them and the subsequent amendments to UK legislation. The cases made it more difficult for employers to deny part time workers access to an Occupational Pension Scheme and remedied a significant and longstanding injustice.
But the Employment Appeal Tribunal judgment in Preston has followed the principles set out in Biggs v Somerset County Council [1995] IRLR 452 and severely limited the impact of the ECJ judgments in respect of past discrimination.
The findings are: The claims must be brought within six months of the end of the contract of employment which denied access to the pension scheme, with no discretion to extend the time limit (the Equal Pay Act 1970 time limit). There is no extension of time for public sector workers by relying on the failure of the Government to implement the equal pay directive, since claims could have been brought under Article 119.
The six month time limit is neither discriminatory nor incompatible with community law and nor does the time limit make it impossible in practice or excessively difficult to exercise rights under community law. The six month time limit runs from the end of the particular contract of service in force, not from the end of employment with the employer after a succession of fixed term contracts with no genuine breaks. The continuity of employment principles in the EPCA cannot be read across to the Equal Pay Act.
The limit on back pay to two years before starting Tribunal proceedings contained in the Equal Pay Act applies to part time pensions claims. This severely limits the practical benefits of the pension equality rulings. The EAT held this was not incompatible with community law as it amounts to a reasonable limit on the retrospective effect of a claim and is not an upper limit on compensation. But this conflicts with the EAT case of Levez v T.J. Jennings (Harrow Pools Ltd) (unreported), which reached a different decision and has referred direct to the European Court of Justice.
The remedy for the failure to permit a part timer to join the pension scheme is a declaration of rights of access. By holding that there is no entitlement to claim damages for loss of benefits payable under the scheme it means that back payments of employee's contributions may have to be paid by the employee as well as the employer. Male part time workers have the same rights as female part time workers.
The EAT refused to refer any questions on the judgment to the ECJ. The Preston case has been appealed to the Court of Appeal to obtain a reference to Europe to join the Levez case. Biggs will not progress beyond the Court of Appeal as leave to appeal to the House of Lords has been twice refused and there is no further right of appeal. If the Preston EAT judgment is upheld, more than 80% of the 60,000 claims waiting at Industrial Tribunals will fail. Any claim brought by part time workers who became eligible to join the company pension scheme more than two years before starting proceedings, will fail. So too will all claims brought by part time workers who left employment more than six months before their claims were lodged.
The refusal to permit separate contracts to be counted as continuing for the purposes of Equal Pay Act time limits will also have a significant effect on cases brought by workers particularly in the education sector.