Magazine article Management Today

Pension Claim Time Bombs Could Be in the Post

Magazine article Management Today

Pension Claim Time Bombs Could Be in the Post

Article excerpt

Part-time workers have been campaigning to win compensation for exclusion from membership of company pension schemes. This month, the House of lords is due to publish its decision on key test cases which were heard in January looking at the validity of time limits on the backdating of claims. If the Lords support the employees, British businesses could face a hefty postbag full of legal claims. How likely is that outcome and how huge could those claims really be?

The part-timers are seeking compensation for exclusion from pension schemes on the grounds of their sex. The Lords has to decide the time limits on claims. The UK's Equal Pay Act requires that claims be commenced no later than six months after retirement, and that backdated compensation be limited to two years. The part-timers argue these limits are incompatible with European law, pointing to last year's decision of the European Court of Justice (in the Magorrian case) that additional benefits could be calculated from 8 April 1976.

Though most of the employers in the Lords' test cases come from the public sector, Midland Bank is also in the firing line, facing claims from members of BIFU, the union for banking, insurance and finance staff. A BIFU spokesperson says over 4,000 cases against financial institutions involving its own members have been lodged. The total number of claims registered with tribunals is believed to exceed 60,000, and any employer of part-timers could be affected. 'If the time limit arguments go against the employers, there will be a lot of administrative inconvenience dealing with the claims,' says Harold Lewis, head of pensions litigation with solicitors Eversheds.

At the time Management Today went to press, the likely outcome of the Lords' decisions was still uncertain. 'There is a strong indication that the two main questions, the six-month time limit and the backdating period, will be referred to the European Court,' says Lewis. …

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