Dietz v Stitching Thuiszorg Rotterdam [1996] IRLR 692

A new European Court of Justice ruling raises fresh hopes for part-timers denied access to pension schemes. It opens the way for claims to any benefits denied to part-timers that are access related such as a pension.

The ECJ also confirmed three crucial points: if employees are to benefit from an occupational pension scheme they must make contributions to cover the time when they were excluded; pension scheme administrators must comply with Article 119 of the Treaty of Rome; workers can take action for discrimination against the scheme administrators as well as their employers.

Ms Dietz was employed part-time for seven hours a week from 1972 to November 1990 when she took voluntary early retirement by agreement with her employer. She was excluded throughout the period from the occupational pension scheme. Dietz's claim was for pension entitlement which spanned periods of employment both before and after the ECJ's Barber judgment [1990] ICR 616 and the Maastricht Protocol which became effective on 17 May 1990.

The Barber judgment and the Protocol to the Maastricht Treaty state that pension benefits in respect to periods of employment before 17 May 1990 are not covered by article 119 unless legal proceedings had already been started. That meant there was no remedy for pensions inequality for periods before 17 May 1990.

Since pension rights become valuable by accruing long periods of service and therefore payments, the overall effect has been to delay pensions equality until the next generation. But the ECJ in Dietz ruled that neither the limit on backdating pensions rights in Barber nor the Maastricht Protocol apply in relation to the right to join an occupational pension scheme. This confirms the judgments in both Vroege [1994] IRLR 651 and Fissher [1994] IRLR 662 which stated that Barber and the Maastricht Protocol limitations apply only to the kind of discrimination which employers and pension schemes could reasonably have considered to be lawful at the time. Dietz, by covering benefits relating to access to the pension scheme, reduces the limitation in the Maastricht Protocol still further.

The ECJ says entitlement to a retirement pension under an occupational scheme is inextricably linked to the right to join the scheme - membership would be of no interest to employees if it did not confer entitlement to the benefits provided by the scheme.

The ECJ found that it has been clear since Bilka Kaufhaus [1986] IRLR 317 that discrimination in the award of benefits which result from discrimination in the right to join the scheme are unlawful. Barber and the Maastricht Protocol do not therefore apply in this situation.

Most occupational pension scheme benefits are access related as they are calculated partly on how long the employee has been a scheme member. The practical effect of the Dietz judgment may be less than hoped as the ECJ has reiterated the position on time limits for bringing claims. It confirmed that national rules on time limits apply to actions based on community law, provided they are not less favourable for community law actions than for similar domestic actions, and they do not make the exercise of European law rights either excessively difficult or impossible in practice.

So far the UK courts have upheld the time limit provision of the Equal Pay Act 1970 although the cases of Levez (see Issue 3 of LELR: Equal pay compensation: how far back can you go?) and Preston (see Issue 2: Time's up at six months) currently before the Court of Appeal could change that.