The European Court of Justice has ruled that part time employees excluded from occupational pension funds may potentially claim backdated payments, leaving employers liable for millions of pounds. The ruling is the result of a case brought by part time women excluded by their employers from the company pension scheme. They argued that since most part time workers are women, exclusion was tantamount to sex discrimination, violating the Equal Pay Act (EPA)of 1976.
Previously, British law allowed excluded employees to claim two years back payment but the European Court ruled the limit illegal. Membership and therefore payments can be backdated to 1976, the inauguration of the EPA. Under British law, claimants must file the case within six months of leaving their job. The House of Lords is considering the limit and if it concludes exclusion is a breach of contract, the period may rise to six years.
Following the ruling, employers that have excluded part time workers membership of an occupational scheme at any time may be liable. Particularly vulnerable are companies operating non-contributory schemes and those still refusing part time workers membership.
Initial reports put potential claims at up to £17bn (E27.5bn), a claim the Association of Chartered Certified (ACCA) accountants calls a gross exaggeration. “Once the ruling has been applied to individual cases, the number of successful claims on company pension schemes is likely to be modest,” says John Davies, head of business law at ACCA. William M Mercer, the international consultants, has estimated a more conservative figure of £100m. Uncertainty stems from the European court’s failure to specify how contributions should be calculated. Nor did the Court specify whether payments will consider inflation or lost interest.
Part timers who are awarded back membership must somehow find the money for back payments, unless the scheme was non-contributory. According to ACCA, those who are eligible may be unwilling or unable to make the contributions.
As of July 1, following a European directive, part time and full time employees will enjoy the same privileges stretching to pay, holiday allowance, perks and training.

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