MSF Legal Briefing

Part-Time Workers Win Victory on Pension Rights in the European Court of Justice

Thousands of part-time workers, including many MSF members, have won a significant victory on back-dated access to their occupational pension schemes. Because of previous restrictions on part-time employees' access to pension schemes, many part-time employees were denied access to their occupational pension schemes for a considerable number of years. This means that their pensions on retirement are likely to be meagre compared with what they might have been.

Under UK law, it was thought that once access to pensions schemes had been granted, claimants could only seek back-dated access for up to 2 years' worth of membership of their schemes. The European Court has held that this is unlawful. The judgement must now return to the House of Lords to be confirmed.

The ECJ judges held that:-

Part-timers claiming back-dated access to pension schemes are not restricted to 2 years' worth of back-dated membership. Claimants should be able to claim as far back as their notional date of entry to the scheme, had they been allowed to join in the same way as full-time workers. The long-stop on entry is likely to be 8th April 1976, but there is a possibility that service could go back as far as the implementation of the Equal Pay Act itself in 1970. These matters will be addressed further by the courts and there is no guarantee that back-dating will turn out to be as generous as anticipated.

What this means in practice is that employers in contributory pension schemes will have to pay back-dated contributions into the scheme on behalf of the claimants who wish to benefit from the judgement. However the individual claimants must be able to finance their own back contributions to the scheme for the period they are claiming.

The judges also held that:-

The 6 months time limit from the ending of the employment for bringing a claim for back-dated entry is unlawful. This means that anyone claiming back-dated access to a pension scheme who has not already made a claim should put in a claim now or at the latest within 6 months of their employment coming to an end.

In the case of employees on a series of short-term contracts, such as teachers, the 6 months time limit for bringing a claim will run from the end of the most recent contract. The succession of short-term contracts must indicate a stable employment relationship between the employer and employee and all of the service must relate to the relevant pension scheme.

For members who have already submitted claims, the procedure now will be that the House of Lords will confirm the decisions of the ECJ. After that, proceedings will go back to the Employment Tribunal for claims to be considered. At that time, some claims are likely to be thrown out by the Tribunal on the basis that they are out of time. However, because of the large number of claims involved, it is likely that the President of the Employment Tribunals will give directions about how individual claims will be dealt with.

Further advice will be provided in due course.