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Cite as: [1998] UKHL 6, [1998] 1 All ER 528, [1998] WLR 280, [1998] ICR 227, [1998] IRLR 197, [1998] Eu LR 631, [1998] OPLR 271, [1998] 1 WLR 280

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Preston and Others v. Wolverhampton Healthcare NHS and Others [1998] UKHL 6; [1998] 1 All ER 528; [1998] 1 WLR 280 (5th February, 1998)

HOUSE OF LORDS

Lord Goff of Chieveley Lord Slynn of Hadley Lord Lloyd of Berwick Lord Nolan Lord Hope of Craighead

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT IN THE CAUSE

PRESTON AND OTHERS
(APPELLANTS)

WOLVERHAMPTON HEALTHCARE NHS AND OTHERS
(RESPONDENTS)

PRESTON AND OTHERS
(APPELLANTS)

WOLVERHAMPTON HEALTHCARE NHS AND OTHERS
(RESPONDENTS) (SECOND APPEAL)

FLETCHER AND OTHERS
(APPELLANTS)

MIDLAND BANK PLC
(RESPONDENTS)

(CONJOINED APPEALS)

ON 5th FEBRUARY 1998

LORD GOFF OF CHIEVELEY

My Lords,

I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Slynn of Hadley, I agree with him that the three questions which he has set out at the end of his speech should be referred to the European Court of Justice, and I would make the same order as he has proposed.

LORD SLYNN OF HADLEY

My Lords,

On 28 September 1994 the European Court of Justice ruled that the right to membership of an occupational pension scheme, as well as benefits payable under the scheme, fell within the scope of Article 119 of the EC Treaty; that the exclusion of married women from membership of such a scheme entailed discrimination based on sex; and that the exclusion of part time workers from membership could amount to a contravention of that Article if it affected a much greater number of women than men unless the employer showed that exclusion was explained by objectively justified factors unrelated to discrimination on the ground of sex. The court further held that the right to join an occupational pension scheme was not limited to employment subsequent to the court's judgment in Barber v. Guardian Royal Exchange Assurance Group (Case C-262/88 [1990] ECR I-1889) but that Article 119 could be relied on to claim equal treatment in the right to join an occupational pension scheme as from 8 April 1976, the date of the court's judgment in Defrenne v. Sabena (Case 43/75 [1976] ECR 455). (Vroege v. NCTV Instituut voor Volkshuisvesting B.V. and Another (Case C-57/93 [1994] ECR I-4541) and Fisscher v. Voorhuis Hengelo B.V. and Another (Case C-128/93 [1994] ECR I-4583).

At the same time the court applied the principle in Rewe-Zentralfinanz e.G. v. Landwirtschaftskammer für das Saarland (Case 33/76 [1976] ECR 1989) that time-limits under national law applied to the assertion of such rights so long as the rules were not less favourable for that type of action than for similar actions of a domestic nature and that they did not render the exercise of rights conferred by Community law impossible in practice.

As a result of these decisions a large number of part-time workers (estimated by now at around 60,000 and mainly, but not exclusively, women) began proceedings before Industrial Tribunals throughout the country, variously claiming that as part-time workers they had been excluded from occupational pension schemes or that their part-time service had not been credited for pension purposes. Some claimants had been employed in the private sector, others in the public sector.

These cases covered a wide range of different employments and were likely to raise difficult and detailed questions of fact, inter alia, as to whether the distinction between full-time and part-time workers could be justified on objective factors other than sex. A number of cases also raised distinct questions as to the position of men in such employment.

Sensibly, it was arranged that a group of claims by women employees in the public sector (employed by the Wolverhampton Healthcare NHS Trust, the Secretaries of State for Health, Education and Employment and the Environment and a number of local authorities) and a group of claims by women employees in the private sector (employed by Midland Bank plc) should be taken as test cases to decide limited issues of law before the questions of fact were investigated.

These issues were principally concerned with the effect on the women's rights under Article 119, as explained in the Vroege and Fisscher cases, of section 2(4) and (5) of the Equal Pay Act 1970. S. 2(4) and (5) are amended by s. 8(6) of and Sch. 1, Pt. 1, para 2 to the Sex Discrimination Act 1975 and modified by reg. 12(1). Those subsections as amended provide as follows:

Section 2(4)

"No claim in respect of the operation of an [equality clause] relating to a woman's employment shall be referred to an industrial tribunal. . . . if she has not been employed in the employment within the six months preceding the date of the reference."

Section 2(5)

'A woman shall not be entitled, in proceedings brought in respect of a failure to comply with an [equality clause] (including proceedings before an industrial tribunal), to be awarded any payment by way of arrears of remuneration or damages in repect of a time earlier than two years before the date on which the proceedings are instituted."

Regulation 12(1)

"The Equal Pay Act shall be so modified as to provide that where a court or an industrial tribunal finds that there has been a breach of a term in a contract of employment which has been included in the contract, or modified, by virtue of an equality clause and which relates to membership of a scheme, or where it makes an order declaring the right of an employee to admission to membership of a scheme in pursuance of the equal access requirements, it may declare that the employee has a right to be admitted to the scheme in question with effect from such date ('the deemed entry date') as it may specify, not being earlier than whichever is the later of the following dates, namely -

The cases came before the Industrial Tribunal in Birmingham. The Chairman gave a decision to the care and clarity of which the Employment Appeal Tribunal paid and I would pay tribute. After an analysis of the facts so far as relevant to the issues reserved to him he decided that the time limit in section 2(4) of the Employment Protection Act 1970 applied and that it did not render the exercise by the appellants of their European Community law rights impossible or excessively difficult. It followed that a claim was only in time if brought not later than the end of the period of six months beginning when the employment which gave rise to the complaint ended. He further held that, by reason of section 2(5), as amended, a claim could not be made in respect of the time earlier than the period of two years referred to in the subsection, and that this was not incompatible with Community law and in particular with the European Court's decision in Marshall v. Southampton & S.W. Hampshire Area Health Authority (No. 2) [1993] ECR 1-4367 since during the two year period a full and complete recovery could be made. Section 2(5) did not make it impossible or excessively difficult to enforce rights under Article 119.

On appeal the Employment Appeal Tribunal upheld the decision of the Industrial Tribunal. They directed themselves that it was for the domestic legal system of each member state to determine the procedural rules and conditions governing actions at law intended to ensure the protection of the rights which individuals derive from the direct effect of Community law. The applicants could have enforced their rights of legal access to an occupational pension scheme at any time since 1976 and the time of six months under section 2(4) of the 1970 Act in which to invoke Article 119 was the same as that for bringing claims under the 1970 Act itself. Neither section 2(4) nor section 2(5) made it impossible or excessively difficult for the claimants to assert their Article 119 rights. The Tribunal decided not to refer questions to the European Court of Justice but to stay their final decision on the issue under section 2(5) of the 1970 Act until the European Court's decision in Mrs. B. S. Levez v. T. J. Jennings (Harlow Pools) Limited (appeal No. EAT/812/94) where questions as to the compatibility of section 2(5) with Community law were raised.

By judgment dated 13 February 1997 the Court of Appeal upheld the decision of the EAT. The court rejected the argument that ignorance of rights under community law made their exercise impossible. The six-month period under section 2(4) was a reasonable limitation. Moreover the exercise of rights under Article 119 was to be compared only with the exercise of rights under the 1970 Act which came into force before Article 119 was of direct effect in the United Kingdom. To make comparison with remedies under the Race Relations Act 1976 was inappropriate and it was not clear in any event that the latter were more favourable. The two year limitation under section 2(5) was not incompatible with the court's decision in Fisscher and they rejected arguments of the applicants based on the decision of the European Court of Justice in Emmott v. Minister for Social Welfare [1991] ECR I-4269 but those arguments had not been pursued before their Lordships. The Court of Appeal also exercised its discretion against making any reference to the European Court.

By Article 177, third paragraph, of the Treaty, however, if questions as to the interpretation of the Treaty arise which it is necessary for the House to decide to enable judgment to be given they must be referred to the Court of Justice unless your Lordships are satisfied that the answer is so clear that a reference is not necessary.

On this appeal two groups of questions have arisen, which do not depend on the determination of any issue of domestic law, as to the compatibility of provisions of the Act of 1970 as amended with Article 119 of the Treaty and which clearly must be decided before judgment can be given.

The appellants contend, first, that the effect of the provision of section 2(4) of the Act of 1970, that a claim for membership of an occupational pension scheme (from which the right to pension benefits flow) must be brought within six months of the end of the employment to which the claim relates, makes it impossible in practice or excessively difficult for the claimants to exercise their rights under Article 119. They also say that this provision means that national procedural rules relating to a claim under Article 119 are thereby less favourable than national procedural rules which apply to other similar claims, in particular those under the Race Relations Act 1976, section 68, the Sex Discrimination Act 1975, section 76, and for breach of contract.

As to the requirement that a procedural rule must not be "impossible in practice" the appellants contend that the six-month limitation makes it impossible for them to claim the full amount of future benefits payable under the scheme since they cannot rely on years of past service in making the computation. As to the requirement that procedural rules should be not less favourable than rules relating to similar claims in domestic law, they say that, on the face of it, in some legislation longer periods are prescribed than for the claim under section 2(4). Alternatively they say that if shorter periods are prescribed than in the Act of 1970, the other legislation allows for flexibility and a discretion to extend the period so that in the result they are more favourable than the six month period provided in section 2(4).

The respondents reply that it was not impossible for the applicants to make their claim within the six-month period. That they failed to do so, even if because they did not know prior to the judgments in Vroege and Fisscher that they had a claim, was their own responsibility and did not make the assertion of the claim impossible. In any event six months is not only reasonable but a generous limitation period. As to the assertion of less favourable treatment the respondents contend that the only relevant similar domestic right of action is the claim under the Act of 1970 itself and that the other claims relied on are not in any sense similar to a claim for equal pay without sex discrimination. As to section 2(5), the appellants say that, in relation to a claim for membership of a pension scheme and for the calculation of pension benefits payable after the date of the application to the Industrial Tribunal, the respondents cannot, as a matter of Community law, be allowed to rely on section 2(5) of the Act of 1970 so as to exclude part-time service performed more than two years prior to the date when proceedings were commenced, so long as it is after 8 April 1976, the date of the European Court's judgment in Defrenne.

The respondents reply that section 2(5) merely limits the period in respect of which the claim which is made (in itself permissible under the decision in Rewe) and does not affect the full entitlement to the amount of pension payable during that period.

The application of the tests of "excessively difficult or impossible in practice" and of the test of "not less favourable" raises questions common to section 2(4) and to section 2(5). As to section 2(5) two particular factors are to be noted.

In the first place, the issue arising under section 2(5) of the Act of 1970 is the subject matter of a reference already made by the Employment Appeal Tribunal to the European Court of Justice in Levez to which reference has been made. The question thus arises as to whether the House should wait for that decision before considering further the present case or whether it is preferable to refer the particular questions which the parties are agreed fall to be decided in the present case. In my opinion the better course is to refer the latter questions to the European Court which it is to be anticipated will have them available if it proceeds to hear the Levez case, unless of course the European Court decides to hear the two cases together with the advantage of hearing all the arguments at the one time but with the obvious disadvantage to Levez of delay in that case.

In the second place, since the judgment of the Court of Appeal in the present case, the European Court has given judgment in the case of Magorrian & Cunningham v. Eastern Health & Social Services Board and Department of Health and Social Services (Case C-246/96 Judgment 11 December 1997). That case also concerned the compatibility with Article 119 of the two year rule set out in Regulation 12 of the Occupational Pension Schemes (Equal Access to Membership) Regulations (Northern Ireland) 1976 S.I. No. 238 where exactly the same question of principle arises. In that case the court said:

"42 However, it should be noted that, in such a case, the claim is not for the retroactive award of certain additional benefits but for recognition of entitlement to full membership of an occupational scheme through acquisition of MHO status which confers entitlement to the additional benefits.

Steenhorst-Neerings v. Bestuur van de Bedrijfsvereniging voor Detainhandel

Johnson

"44 Consequently, unlike the rules at issue in the judgments cited above, which in the interests of legal certainly merely limited the retroactive scope of a claim for certain benefits and did not therefore strike at the very essence of the rights conferred by the Community legal order, a rule such as that before the national court in this case is such as to render any action by individuals relying on Community law impossible in practice.

"47 Accordingly, the reply to be given to the second question must be that Community law precludes the applications, to a claim based on Article 119 of the EC Treaty for recognition of the claimants' entitlement to join an occupational pension scheme, of a national rule under which such entitlement, in the event of a successful claim, is limited to a period which starts to run from a point in time two years prior to commencement of proceedings in connection with the claim."

The parties are not agreed as to the effect of that decision on the present case. The applicants say that it decides clearly that, because section 2(5) (or Regulation 12) applied to claims for future benefits based on past service, it rendered action by individuals relying upon Community law impossible in practice. That reasoning is applicable to the claim under section 2(4) though section 2(4) was not in issue in the Magorrian case. The respondents contend that the decision in Magorrian was based on the particular fact that under the scheme 20 years' service constituted a precondition of additional benefits over and above the basic pension payable and that Regulation 12 prevented the applicants from qualifying. In the alternative they say that this judgment is inconsistent with previous decisions of the court and in particular with Fantask C-188/95 judgment 2 December 1997 and Fisscher (supra). They contend that this radical change in the law and a misreading of the Regulation makes it necessary that what was said there should be considered in the present case before section 2(5) as amended is held to be invalid.

In my opinion the answer to the question whether as Mr. Pannick submits the European Court's judgment in Magorrian is decisive of the issue in relation to both section 2(4) and section 2(5) of the Act of 1970 as amended, which have to be decided before judgment can be given, cannot be said to be so clear that no reference by your Lordships' House to the European Court of Justice is necessary.

In my opinion, therefore, questions numbered 1 and 2 set out at the end of my speech should be referred to the European Court of Justice pursuant to the third paragraph of Article 177 of the EEC Treaty. For the convenience of the European Court I annex to this speech a summary of more details of the facts and pension provisions as agreed by the parties to this appeal.

There is one further issue in the Preston case which involves in the first place a question of domestic law, namely the proper interpretation of section 2(4) of the Act of 1970. It concerns part-time teachers or lecturers who respectively belong to one of three groups: (a) those who were employed at the same school under a succession of contracts for the academic year, the only break being for the period of each long vacation; (b) those employed under a succession of fixed term contracts with breaks during vacations or courses; and (c) those who work intermittently. It is possible that in such situations there may exist an "umbrella" contract, which requires the employer to offer and the employee to accept work from time to time, although there is no agreement that that exists in the present cases.

The question essentially is whether if a woman claims in respect of the operation of an equality clause within six months of the end of her employment the equality clause is to be read as applicable to the particular contract governing that employment or as applying to the employment relationship covering a number of different contracts with the same employer, whether as in (a) and (b) above (periodic but regular) or as in (c) above (intermittent).

The Industrial Tribunal, the Employment Appeal Tribunal and the Court of Appeal all held that in section 2(4) "the employment" means the employment under the contract of service about which complaint is made. As the EAT put it

"the time limit under section 2(4) runs from the end of each contract under which a part-time employee is employed and not from the end of any employment with the employer comprehending a succession of different contracts of employment with the same employer."

It is thus not possible to claim in respect of previous contracts unless proceedings have been instituted within six months of their termination.

The appellants contend to the contrary. It is their case that in section 2(4) "employed in the employment" refers to the whole employment relationship under a series of successive contracts, even where there are breaks, so long as a claim is made within six months of the end of the employment generally. If this were not so, workers in the public sector, particularly part-time teachers, would be at a serious disadvantage. Once it is accepted (as the courts below accepted) that "the employment" can cover a series of successive contracts where there is no break, there is no justification for excluding from the benefit of the section a succession of contracts for the same kind of employment with breaks between them, particularly where the breaks are during periods (school holidays) where there is no teaching to be done. This approach, it is said, is supported by the provisions of section 1 of the Act of 1970 where the reference to a man employed in the same employment cannot mean "employed under the same contract of employment"; nor does section 1(6) of the Act point to one single contract as opposed to a series of related contracts.

Looked at as a whole, they say, the purpose of section of 2(4) must be to allow a claim to be brought in respect of the full employment relationship and to exclude claims which are not brought within six months of the end of that relationship. It is unreal not to have regard to the continuity and artificial to say that the employment relationship ends at each day, each term or each year of the contract when really the teachers are employed under a series of contracts which contribute to the pension rights about the quantum of which they complain. If the statute is construed as the Court of Appeal construe it that will be inconsistent with the European Court of Justice's decision in Marshall v. Southampton & S. W. Hampshire Health Authority (No. 2) (supra) since there will not be real and effective judicial protection of rights under Article 119. Indeed to require a claimant to bring a separate claim in respect of each separate contract makes it "impossible in practice" to enforce full pension rights. Moreover it does not make sense to do so when the claims all arise under the same pension scheme and the benefits are only paid when the "employment" rather than "a contract of employment" comes to an end.

Mr. Pannick's submissions on this point may provide strong arguments as to what the policy should be in relation to, for example, supply teachers who, he suggests, have a continuous period of employment under separate contracts.

I do not, however, consider that this interpretation of section 2(4) of the Act of 1970 can be accepted.

In the first place section 1 of the Act provides that "(1) If the terms of a contract under which a woman is employed at an establishment in Great Britain do not include . . . an equality clause they shall be deemed to include one" and by section 1(6)(a) "employed" is defined as "employed under a contract of service." That definition is for the purposes of section 1 only but it does give an indication that the structure of the Act is based on the incorporation of the equality clause into a specific contract of employment and not simply into an employment relationship. There is no provision that different contracts of employment are to be treated as continuous employment.

In the second place section 2(4) refers to a claim in respect of the operation of "an equality clause relating to a woman's employment." That equality clause is a clause in a contract of employment which as I see it can only be the specific contract in respect of which the claim is made and which for the purposes of the Industrial Tribunal's jurisdiction must cover employment which has ended within six months of the claim before the Industrial Tribunal. The "woman's employment" in line two is referable to "the employment within the six months" period in lines 4-5 of the section; the latter refers back to employment under a contract which contained, or which by statute has read into it, an equality clause. Where there are breaks between separate contracts, at any rate where there is no umbrella clause under which periodically and regularly work must be given and accepted, the time to bring a claim expires six months from the end of each contract.

That conclusion, contrary to the appellants' contention, does not involve putting a gloss on or reading words into section 2(4). It is the natural meaning of the words in their context.

Where there is a continuing succession of contracts without break, in principle, the position should be the same but I would not rule out the possibility that on particular facts the existence of a succession of such contracts might lead to the conclusion that there was an overriding contract in respect of which a claim might be made when all employment came to an end. On the statement of facts agreed by counsel in Mrs. Preston's case that question does not arise on this appeal.

Mr. Pannick relies on the provision in section 6(c) of the Interpretation Act 1978 that words in the singular include words in the plural. I do not think that helps here since even if, unlikely as it may be, a person was employed under more than one contract with the same employer, they must all end at a date within the six months period. I do not think in any event that the context requires that "contract" should here include all contracts of employment.

Mr. Pannick also relies on section 62 and section 63 of the Pensions Act 1995. The former section lays down an equal treatment rule for occupational pension schemes. The latter provides that for the purposes of section 62 section 2 of the Act of 1970 shall have effect as if references to an equality clause were references to an equal treatment rule and as if for section 2(4) there were substituted:

"(4) No claim in respect of the operation of an equal treatment rule in respect of an occupational pension scheme shall be referred to an industrial tribunal otherwise than by virtue of subsection (3) above unless the woman concerned has been employed in a description or category of employment to which the scheme relates within the six months preceding the date of the reference."

He accepts that that subsection does not apply directly since it did not come into force until 1 January 1996, but he submits that when Parliament did think of the position in relation to occupational pension schemes it substituted a more general phrase and that should guide the interpretation of section 2(4) when pension schemes are being considered.

There are several answers to this point. In the first place it is really not possible to give a different meaning to section 2(4) according to whether a question arose in relation to pay or in relation to occupational pension schemes, prior to the coming into force of the Act of 1995.

The second is that the question of pension schemes had been considered earlier and yet section 2(4) had been left as it stood. (See sections 53 and 54 of the Social Security Pensions Act 1975, the Occupational Pension Schemes (Equal Access to Membership) Regulations 1976 (S.I. 1976/142) in particular paragraph 9, and the Pension Schemes Act 1993).

The third is, as Miss Booth QC showed, that there is a clear, independent reason for the difference in wording. The Act of 1970 is concerned with contracts, a contract between a specific employer and a specific employee. It was therefore appropriate to import a clause into that contract. The Act of 1995 is concerned with pension schemes applicable not just to one contract or form of contract but to different employment contracts not all of which are identical. A broader group was needed hence the words "description or category of employment" for the purposes of such schemes. It was also appropriate to refer to rules rather than clauses being inserted into the pension schemes. As Mr. Paines QC pointed out section 2(4) of the Act of 1970 continues in force where it is relevant even if a more suitable formulation is adopted in the Act of 1995 in relation to occupational pension schemes.

I do not, therefore, consider that the Act of 1995 should influence the interpretation of the Act of 1970 in the way for which Mr. Pannick contends.

On the domestic law question raised in this appeal I agree with the conclusions of Otton L.J. with which the other members of the Court of Appeal agreed and I would dismiss the appeal on that point.

That in my view is not the end of the matter. The question arises as to whether such conclusion means that the provisions of section of 2(4) in this respect are incompatible with, or render excessively difficult to enforce, the exercise of rights under Article 119 of the Treaty either in relation to access to a pension scheme or as to benefits payable under it.

Mr. Elias QC submits that it is illogical and factually incorrect to say that it is impossible to claim within the six-month period of an earlier contract when it is perfectly possible to make a claim in respect of the last of such contracts. He also says that it is quite plain that on the construction of section 2(4) for which he contends, and which I accept, there can be no conflict with Article 119.

He may or may not be proved to be right but the question whether the restriction on the aggregation of periods of employment frustrates the purpose of Article 119, and is incompatible with it, is a question which, so far as I am aware, has not been specifically decided by the European Court of Justice. I agree with Mr. Pannick that it is necessary for this question to be decided in the context of a case where the compatibility generally of section of 2(4) is in issue. I do not accept Mr. Elias' argument that the answer to it is so clearly against Mr. Pannick's contention that it is not necessary to refer it to the European Court.

Accordingly since the effect of section 2(4) in relation to Article 119 is being referred in other respects I would refer question 3 of the questions which I now set out:-

QUESTIONS

Where:

1. Is:

(a) a national procedural rule which requires that a claim for membership of an occupational pension scheme (from which the right to pension benefits flows) which is brought in the Industrial Tribunal be brought within six months of the end of the employment to which the claim relates;

(b) a national procedural rule which provides that a claimant's pensionable service is to be calculated only by reference to service after a date falling no earlier than two years prior to the date of her claim (irrespective of whether the date on which pension benefits become payable is before or after the date of the claim)

compatible with the principle of EC law that national procedural rules for breach of Community law must not make it excessively difficult or impossible in practice for the claimant to exercise her rights under Article 119?

2. In circumstances where:

(a) rights under Article 119 fall, as a matter of domestic law, to be enforced through the medium of a statute which was enacted in 1970, prior to the United Kingdom's accession to the European Community, and came into effect on 29 December 1975, and which, prior to 8 April 1976, already conferred a right to equal pay and equality of other contractual provisions;

(b) the domestic statute contains the procedural rules referred to in question (1) above;

(c) other statutes prohibiting discrimination in the employment field and the domestic law of contract provide for different time limits:

(1) Does the implementation of Article 119 through that domestic statute constitute compliance with the principle of EC law that national procedural rules for a breach of Community law must be no less favourable than those which apply to similar claims of a domestic nature?

(2) If not, what are the relevant criteria for determining whether another right of action in domestic law is a domestic action similar to the right under Article 119?

(3) If a national court identifies any such similar claim in accordance with any criteria identified under (2) above, what, if any, are the relevant criteria under Community law for determining whether the procedural rules governing the similar claim or claims are more favourable than the procedural rules which govern the enforcement of the right under Article 119?

3. In circumstances where:

(a) an employee has served under a number of separate contracts of employment for the same employer covering defined periods of time and with intervals between the periods covered by the contracts of employment;

(b) after the completion of any contract, there is no obligation on either party to enter into further such contracts; and

(c) she initiates a claim within six months of the completion of a later contract or contracts but fails to initiate a claim within six months of any earlier contract or contracts: Is a national procedural rule which has the effect of requiring a claim for membership of an occupational pension scheme from which the right to pension benefits flow to be brought within six months of the end of any contract or contracts of employment to which the claim relates and which, therefore, prevents service under any earlier contract or contracts from being treated as pensionable service compatible with:

(1) the right to equal pay for equal work in Article 119 of the EC Treaty; and

(2) the principle of EC law that national procedural rules for breach of Community law must not make it excessively difficult or impossible in practice for the claimant to exercise her rights under Article 119?

SCHEDULE OF FACTS

THE PENSION SCHEMES

1. The "test" cases concern the following pension schemes, all of which are contracted out schemes under United Kingdom law:

(a) The NHS Pension Scheme contained in Statutory Instruments made by the Secretary of State for Health and administered by the Secretary of State;

(b) The Teachers' Superannuation Scheme contained in Statutory Instruments made by the Secretary of State for Education and Employment and administered by the Secretary of State;

(c) the Local Government Superannuation Scheme contained in Statutory Instruments made by the Secretary of State for the Environment pursuant to which certain local authorities (not the Secretary of State) maintain pension schemes;

(d) the Electricity Supply (Staff) Superannuation Scheme Pension Scheme, originally established by resolution of the Electricity Council in 1947, and, since 1994, the Electricity Supply Pension Scheme, established under a trust deed; and

(e) the Midland Bank Pension Scheme and the Midland Bank Key-Time Pension Scheme.

2. The terms of the above schemes governing eligibility of part-time employees to be members have been as follows:

(a) The NHS Pension Scheme

The relevant occupational pension scheme is the National Health Service Pension Scheme ("the NHS Scheme"). At the material times, the rules relating to access to the NHS Scheme were contained, successively, in the NHS Superannuation Regulations 1961 (S.I. 1961/1441), as amended by the NHS Superannuation (Amendment) Regulations 1973 (S.I. 1973/242), and the NHS Superannuation Regulations 1980 (S.I. 1980/362) ("the 1980 Regulations").

Until 1 April 1991, part-time workers who worked for less than one half of the hours which would constitute whole-time employment in their case did not qualify for membership of the NHS Scheme.

Since 1 April 1991 all NHS employees have been permitted to join the NHS Scheme regardless of the number of hours worked. Existing part-time workers who were not already members of the Scheme were able to elect to become members.

The 1980 Regulations were replaced by the National Health Service Pension Scheme Regulations 1995 (S.I. 1995/300), under which access to the NHS Scheme is granted to all officers, medical and dental practitioners, regardless of the number of hours worked.

(b) The Teachers' Superannuation Scheme

The terms of the Teachers' Superannuation Scheme were contained until 1 January 1977 in the Teachers' Superannuation Regulations 1967 (S.I. 1967/489), until 1 November 1988 in the teachers' Superannuation Regulations 1976 (S.I. 1976/1987), and until 1 September 1995 in the Teachers' Superannuation (Consolidated) Regulations 1988 (S.I. 1988/1652).

Under the 1967, 1977 and 1988 Regulations, part-time workers did not have a right of access to the Scheme if:

(1) their remuneration was calculated on an hourly-paid basis, though part-timers could join the Scheme if they were paid a pro rata proportion of a full-time worker's salary; or

(2) they were already in receipt of a teacher's pension.

On 1 September 1995, the Teachers' Superannuation (Amendment) Regulations (S.I. 1995/2004) came into force. The 1995 Regulations amended the 1988 Regulations so that hourly paid workers ceased to be excluded from access with effect from 1 May 1995.

Further, the effect of the Occupational Pension Schemes (Equal Access to Membership) (Amendment) Regulations 1995 (S.I. 1995/1215) was to provide that occupational pension schemes, including the Teachers' Superannuation Scheme, should be treated with effect from 31 May 1995 as having been modified so as to eliminate indirect discrimination between the sexes.

A number of the applicants in the education sector became eligible to join the Teachers' Superannuation Scheme before May 1995 because of a change of job, or a change in salary payment method.

(c) The Local Government Superannuation Scheme

In the period up until 1 April 1986, the conditions for access to pension funds forming part of the Local Government Superannuation Scheme ("the L.G.S.S.") were set out in the Local Government Superannuation Regulations 1974 (S.I. 1974/520) and, with effect from 1 March 1986, the Local Government Superannuation Regulations 1986 (S.I. 1986/24). Both Statutory Instruments limited access to the L.G.S.S. to officers who were "whole-time employees," that is, employees whose contractual minimum working hours usually amounted to 30 or more per week.

The conditions for access to the L.G.S.S. were amended by the Local Government Superannuation (Miscellaneous Provisions) Regulations 1987 )S.I. 1987/293). The 1987 Regulations extended the right of access to the L.G.S.S., with effect from 1 April 1986, to part-time employees who were contracted to work 35 or more weeks per year and whose contractual hours were between 15 and 30 hours per week.

In addition, the 1986 Regulations excluded persons appointed to a post in a temporary capacity of not more than three months or whose employment was of a casual nature.

The conditions of access were further amended on 17 August 1993 with retrospective effect from 1 January 1993 by the Local Government Superannuation (Part-Time Employees) Regulations 1993 (S.I. 1993/1814). The requirement of a minimum of 15 contractual hours per week was removed.

Since 1 May 1995 the terms of the Scheme have been contained in the Local Government Pension Scheme Regulations 1995 (S.I. 1995/1019)> Under these Regulations all employees of the relevant bodies are eligible to join the Scheme.

(d) The Electricity Supply (Staff) Superannuation Scheme and the Electricity Supply Pension Scheme

Until 1 April 1984, the relevant occupational pension scheme for the applicants who were employed in the Electricity Supply Sector was the Electricity Supply (Staff) Superannuation Scheme ("the 1947 Scheme") which had been established pursuant to a resolution of the Electricity Council dated 15 August 1947.

Until 1 October 1980, access to the 1947 Scheme was open only to those "staff" employees in the Electricity Supply Industry who worked at least thirty four and a half hours per week.

By a resolution of the Electricity Council dated 1 October 1980, membership of the 1947 Scheme was extended to "staff" employees who worked at least 20 hours per week.

By a resolution of the Electricity Council dated 20 January 1983, the 1947 Scheme and the Electricity Supply (Industrial Staff) Superannuation Scheme 1948 were merged to form the Electricity Supply Pension Scheme ("ESPS"), which was established under a trust deed and which came into force on 1 April 1984.

At the inception of the ESPS the conditions for access to the Scheme were the same as they had been in the last years of the 1947 Scheme, namely that the employee worked a minimum of 20 hours per week.

By an amendment to the trust deed governing the ESPS, and with effect from 1 April 1988, the qualifying hours threshold for membership of the ESPS was removed, so that employees became entitled to membership of ESPS, regardless of the number of hours worked.

In 1990, and following privatisation of the Electricity Supply Industry, the trustees structure of the ESPS was devolved to two levels of trustees: a central trustee, Electricity Pension Trustee Limited, and group trustees responsible for the administration of the ESPS in the regions covered by the former electricity boards.

(e) The Midland Bank Pension Scheme and Midland Bank Key-Time Pension Scheme

Midland Bank plc has operated at all times material to the applicants' claims a non-contributory pension scheme for the benefit of its staff.

Before 1 January 1989, it operated a scheme known as the Midland Bank Pension Scheme which only full-time employees were eligible to join. From 1 January 1989, Midland Bank plc set up an additional pension scheme, the Midland Bank Key-Time Pension Scheme, for the benefit of part-time employees who worked for more than fourteen hours per week. Access to that scheme was extended to all part-time workers, irrespective of their hours of service, as from 1 September 1992.

With effect from 1 January 1994, the two pension schemes were merged.

No service before 1 January 1989 is credited for pension purposes to any part-time employees. Further, in order to qualify for a pension under the scheme, it is necessary to have completed at least two years' pensionable service.

THE PARTIES

3. Each of the applicants in the national proceedings was, for a period or periods, ineligible to join one of the above schemes because he or she did not satisfy the qualifying conditions referred to above.

4. The respondents to the applications (and these appeals) are in each case the applicant's employer or former employer. In addition, each applicant in the Health, Education, and Local Government Sectors has added the Secretary of State as second respondent.

THE FACTS

5. During the periods when the applicants were excluded from membership of the schemes, the law of England and Wales did not (apart from the effect of European Community law) prohibit indirect sex discrimination in relation to access to membership of an occupational pension scheme. With effect from 31 May 1995, such indirect discrimination was prohibited by section 118 of the Pension Schemes Act 1993 as substituted by Regulation 3 of the Occupational Pension Schemes (Equal Access to Membership) (Amendment) Regulations 1995 (S.I. 1995/1215).

6. The applicants' claims were all presented to the Industrial Tribunal either within the six month time limit set out in section 2(4) of the Equal Pay Act 1970 ("EPA") or within six months of the decision of the European Court of Justice given on 28 September 1994 in Vroege v. NCIV Institut voor Volkshuisvesting BV (Case-57/93 [1994] ECR 1-4541) and Fisscher v. Voorhuis Hengelo BV (Case-128/93 [1994] ECR 1-4583).

7. By was of example only, in the Midland Bank pension scheme, the different ways in which the pension rights of part-time workers have been affected by their exclusion from the pension schemes are illustrated by the cases of the following four appellants:

(i) Dorothy Mary Isobel Fletcher

Mrs. Fletcher was employed by Midland Bank plc as a secretary/typist between 1974 and 30 June 1991. She worked part-time for hours varying between about ten and twenty per week. She was granted access to the Midland Bank Key-Time Pension Scheme on 1 January 1989. Since 1 July 1991, she has been in receipt of a pension. Her pension is calculated on the basis of her service only between 1 January 1989 and 30 June 1991.

(ii) Judith Barron

Mrs. Barron is and has since 30 July 1984 been employed by Midland Bank plc in a clerical position. Until 11 July 1988, she worked part- time for hours varying between seven and twenty-five hours per week. Since 12 July 1988 she has worked full-time. She has been a member of the Midland Bank Pension Scheme since 1988. None of her part-time service has been credited for pension purposes.

(iii) Mary Foster

Mrs. Foster was employed by Midland Bank plc as a part-time cashier between May 1979 and May 1994 when she reached normal retiring age. She worked eleven hours per week. She was granted access to the Midland Bank Key- Time Pension Scheme on 1 September 1992 but has received no pension at all because she had not been in the Scheme for two years at the date of her retirement.

(iv) Rachel Mary Harrison

Mrs. Harrison was employed by Midland Bank plc as a cashier full-time between 1956 and 1964 and between 1982 and 1993 and part-time between 1975 and 1982. She became a member of the Midland Bank Pension Scheme in March 1982 and none of her part-time service has been credited for pension purposes.

8. In the education sector, the applicants include applicants falling into the following categories:

(1) Part-time teachers or lecturers who taught at the same school or college for a number of years and who were employed under a succession of contracts which lasted for the academic year only (known as "sessional contracts"), with a break between contracts over the summer vacation from the end of one academic year to the beginning of the next.

(2) Part-time lecturers who taught at the same school or college for a number of years and who were employed under a succession of fixed term contracts for each term ("termly contracts"), with breaks between contract during the school holidays and college vacations. Such contracts normally involved the teaching of a specific course and were therefore co-terminous with the course in question. They might therefore in some cases last the course in question. They might therefore in some cases last for less than a term.

(3) Part-time teachers who, by reason of the nature of their jobs, worked intermittently. The said teachers worked when called on to do so by their local education authority employer and entered into a specific contract of employment which covered each period when they were called on to work.

9. It is possible for a succession of specific contracts for regular or short occasional work to be governed by another underlying, continuing, "umbrella" contract which requires the employer to offer and the employee to accept work from time to time. The third question related to applicants employed under the types of contract described above when employment was not also covered by an "umbrella" contract.

LORD LLOYD OF BERWICK

My Lords,

LORD NOLAN

My Lords,

LORD HOPE OF CRAIGHEAD

My Lords,

I have had the advantage of reading in draft the speech which has been prepared by my noble and learned friend, Lord Slynn of Hadley. For the reasons which he has given I also would dismiss the appeal on the domestic law question. I agree with him that the three questions which he has set out at the end of his speech should be referred to the European Court of Justice, and I would make the same order as he has proposed.