Labour & European Law Review Weekly Issue 251 12 January 2012
It is well established in law that it is indirectly discriminatory to exclude workers from a pension scheme because they work part-time. The Court of Appeal has now said in Copple and ors v Littlewoods plc and ors that part-time women employees who would not have exercised the choice to join were not entitled to retrospective membership of the scheme because they had not lost anything.
Hundreds of women employees, who had been denied the right to join Littlewoods’ pension scheme between 1976 and 1995 because they worked part-time, claimed a breach of equal pay law. The company conceded that during the time they were not allowed to join the scheme, they were the subject of indirect discrimination which could not be justified.
However, having opened it up to part-timers, the company refused to give retrospective pension rights for the “closed periods” to anyone who did not join within three months of being eligible to do so.
Instead, it took the view that if a woman had failed to join within that three-month window, it would assume that she would not have joined it earlier even if eligible. As the woman had suffered no loss, she was not entitled to a remedy (known as the opt-out principle).
The part-timers claimed this denied them an effective remedy and was incompatible with EU law. They asked the Tribunal for a declaration recognising their right to be admitted to the pension scheme, whether they would have chosen to join or not.
Tribunal and EAT decisions
The Tribunal rejected their arguments, saying that since the women who had opted out had not suffered a detriment, the equality principle had not been breached.
It also refused to make a retrospective declaration of entitlement, as this would put the claimants in a better position than male full-timers who had chosen not to join once they were eligible to do so.
As to whether they fell into the category of opt-out workers, it found that some of the women would have joined the pension scheme, had they had the chance to do so. In the other cases, it found that they would not and therefore were not entitled to a declaration.
The EAT held that the opt-out principle was wholly compatible with EU law and agreed that, in the circumstances, it was not appropriate to grant the remedy of a declaration of entitlement to someone who had not suffered a loss.
Court of Appeal decision
The Court said that there had been a breach of the equality clause as the women had been denied the right to choose whether to join the scheme, even though they had not suffered a loss. The loss of the right to choose was, in itself, a detriment.
However, although it had been breached, those women who could not establish that they would have chosen to join the scheme were not entitled to a declaration of entitlement to retrospective membership of the scheme because they had not lost anything.
The Court also held that the opt-out principle was compatible with EU law. The equality clause removed the barrier preventing them from joining the scheme and was an effective remedy. However, conferring the right to access did not oblige them to join the scheme.
Nor did it give them the right to join with retrospective effect as that would be disproportionate to their loss and would put them in a better position than full-timers, except for a “relatively short period” when the scheme was open to them but before they decided to join.
It is unlikely that this will have wider implications outside the part-time pension litigation. It is relatively uncontroversial. Equal pay and sex discrimination law cannot put the claimant in a better position than she would have been in, had she had the rights from the start. There is no provision for compensation for non-financial loss or penalty damages.