The House of Lords’ clarification on pension schemes has also confirmed a time limit for equal pay claims
Employees recently received some good news from the House of Lords. In a long-awaited decision, in Preston & others v Wolverhampton Healthcare NHS Trust, 2001, 2 WLR 448, their Lordships overturned a rule limiting the damages which can be recovered in an equal pay claim.
They were considering cases where female employees had been excluded from their employers’ occupational pension schemes on the basis that they were part-time workers.
The employees had successfully established that this amounted to a breach of the equal pay legislation. However, under UK law, they were only able to claim retrospective membership of their respective pension schemes for the two year period before lodging their claim.
Treaty of Rome
This meant that if they had been excluded from their employers’ pension scheme for 20 years before bringing the claim, they could do nothing about the first 18 of those years.
The House of Lords held that this rule meant that UK law failed to provide an effective remedy for breach of Article 119 of the Treaty of Rome, which states that men and women should receive equal pay for equal work.
They said that instead, these women should be allowed to claim membership of their employers’ pension schemes as far back as 1976 (if they were excluded for that long).
The date of 1976 was chosen because that was the year when the European Court of Justice decided that Article 119 had direct effect - that is, it could be enforced against employers directly. The women could then claim the benefits of membership of the scheme provided they paid the contributions which they would have paid had they been members from the start.
The only disappointing news for employees was the decision (in the same case) to uphold the time limit for bringing an equal pay claim. Equal pay claims may be brought either during employment or within six months of the employment terminating.
The House of Lords was asked to consid