In 1994, two European Court of Justice judgments (Vroege -v- NCIV Instituut Voor Volkshuisvesting BV, 1994 : IRLR651 and Fisscher -v- Voorhuis Hengelo BV, 1994 : IRLR 662) were published which said that an occupational pension scheme which excluded part-time workers contravened European equal pay laws if the exclusion affects a much greater number of women than men, unless the employer shows that the exclusion of part-timers can be objectively justified on grounds unrelated to sex. Subsequently, unions in England and Wales from the health, local Government, education, banking and electricity supply sectors lodged a number of test cases with the Employment Tribunal on behalf of members who worked part-time.
In November 1995, the test cases, referred to as Preston & Others -vs- Wolverhampton Healthcare NHS Trust & Others, came before a tribunal which found that:
- Pension rights should be granted to part-time workers
- Rights should be back-dated two years
- Rights should only be granted where the claimant had commenced their Employment Tribunal claims within six months of leaving their employment
The decision (Mrs S Preston & others -vs- Wolverhampton Healthcare NHS Trust & others) was appealed by the unions. The tribunal’s findings were upheld by the Employment Appeals Tribunal in 1996 and, upon further appeal, by the Court of Appeal.
There was a further appeal to the House of Lords in September 1999 which referred certain question to the European Court of Justice (ECJ) for preliminary rulings. Whilst the tribunal’s decision relating to the six month time limit for lodging claims was upheld by the Law Lords, the two-year period of back-dating was held to contravene European law.
The Law Lords published their judgment. in February 2001. The summary of their findings is:
- Access to an employer’s pension scheme could be back-dated to 8th April 1976, or to the commencement of the employee’s employment, whichever is the latest date
- Those working on a series of short-term contracts which gave rise to a stable employment relationship with their employer could bring proceedings within 6 months of the ending of that relationship
- The six month time limit for bringing proceedings ran from the end of the contract of employment in question in all other cases
- See Mrs Preston (below link)
Following a Directions Hearing held on 21st November 2001 in which a number of further issues were raised, test cases were selected and moved forward to a full hearing, which took place in June and July 2002. The decision of the tribunal was promulgated (“made public”) on 5th August 2002.
- See Directions Hearing (below link)
There have been a number of further tribunal hearings. In October 2002, the tribunal issued directions for the future handling of cases. Following this hearing, an information bulletin (No. 7) was issued to all parties, which summarised the findings from the August hearing, and detailing which issues were being appealed. Information was also given about two categories of case which now failed.
- View directions for the future handling of cases (below link)
- View information bulletin (No. 7) (below link)
- In December 2002, a hearing related to the issue of burden of proof, particularly with regards to those employees who have irregular patterns of work, took place.
It had been the intention of the Tribunal to hold a hearing on 31st March 2003 to determine how back-dated contributions should be calculated. Two test cases were selected, one each from the public and electricity supply sectors. However, it became clear that both sectors were negotiating towards settlement, and indeed in the public sector an agreement was reached in principle ahead of that hearing.
Consequently, the remedy hearing was substituted with a case management conference, and directions were issued in relation to the processes which should be adopted in handling the public sector settlement.
The directions arising from the hearing
A further information bulletin (No. 8) was published in May 2003 providing parties with an update of the situation.
The Treasury and the six public sector unions involved in reaching the agreed settlement model helpfully agreed to the publication of this privately-negotiated settlement model, in it original format.
In December 2003, the Employment Appeal Tribunal dismissed most of the appeals from the tribunal’s decision of the 5th August 2002 but allowed the appeal on one point relating to claimants who failed to opt into the scheme when they became eligible to do so and on the question of the time limit for bringing proceedings when a claimant’s employment has been transferred under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE). A further information Bulletin (No. 9) providing parties with an update of the situation was published in March 2004.
In October 2004, the Court of Appeal upheld an appeal on the TUPE issue and reinstated the tribunal’s original decision. The final appeal on this point was heard by the House of Lords in February 2006 and was dismissed.
Directions Hearing - pdf (opens in a new window)
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Directions for future handling of cases - pdf (opens in a new window)
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Information Bulletin 7 - pdf (opens in a new window)
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Information Bulletin 8 - pdf (opens in a new window)
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Information Bulletin 9 - pdf (opens in a new window)
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