Preston: Lords give part-timers 25 years
by Ian Neale 09/02/2001    Back to previous page

Yesterday the Law Lords handed down their judgement in the final chapter of the long-running Preston case. Marking the end (it must be hoped) of a process which began as far back as 1990, the Lords ruled as expected that part-timers are entitled to claim back-dated pension scheme membership as far back as 8 April 1976 (or the date of commencement of employment, if later).

This was the date of the landmark European Court of Justice (ECJ) Defrenne case, which established that the principle of equal pay for equal work enshrined in Article 119 of the Treaty of Rome was enforceable by the individual against his or her employer. The subsequent Vroege and Fisscher cases, both determined 28 September 1994 and also cited in today's judgement, confirmed that exclusion of part-timers amounted to sex discrimination if it affected a much greater number of women than men (in the absence of objective justification, whatever that meant); but also that backdating could be limited by national laws and that claimants would be liable to pay back-dated contributions if the scheme was contributory. The Lords referred too in their judgement to the 1998 Magorrian case, in which the ECJ struck down a two-year backdating limit.

This ruling backs up last year's ECJ judgement in this case. The Lords also confirmed that in order for a part-time employee's claim to succeed, as required under the 1970 Equal Pay Act it must have been lodged while still in the relevant employment or within 6 months of leaving it. Finally, if a series of employment contracts is concluded at regular intervals in respect of the same employment, the Lords reiterated that this constitutes a stable employment relationship, and so the 6 months runs from the end of the last contract forming part of that relationship.

The 6-month time limit is likely to disqualify a significant number of the 60,000 or more claimants to date. In addition, where the scheme is contributory, in many cases the employee will have to agree to pay back-dated member contributions. On the other hand, it has been argued that this is not the formidable hurdle it was first thought to be. For this purpose, loans are likely to be available which could be repaid out of the eventual tax-free lump sum.