Law: Bright future but a cloudy past for the part-timers

Ian Hunter on the thorny issue of compensation for workers who were treated unfairly

The past year has seen a significant improvement in rights for part-time workers. The driving force for these changes has been the interpretation of European law. The future is brighter for part-timers. What is not yet clear is the extent to which this group can seek redress in respect of unequal treatment in years gone by. In February 1995, legislation was introduced to bring part-time workers' statutory protection against dismissal into line with that enjoyed by their full-time colleagues. Until this change, employees who worked less than 16 hours a week but more than eight hours only accrued the requisite qualifying period of employment in order to bring a claim for unfair dismissal or to claim a statutory redundancy payment after five years. Those employees who worked less than eight hours a week accrued no protection regardless of the number of years worked. Full-time employees, by comparison, acquired this right after two years of continuous employment.

The rationale behind these changes was that as the qualifying conditions disportionately affected women - who form the majority of part-time workers - in the absence of objective justification, such conditions were said to contravene European law. Employees who establish that they have been unfairly dismissed are entitled to compensation made up of two parts. First, the basic award, which is subject to a maximum of between pounds 105 and pounds 3l5 for each completed year of employment, depending on age, up to a maximum of 20 years. The second tier, the compensatory award, is subject to a maximum of pounds 11,300.

The new legislation also extended to part-time employees, the same rights as full-time workers in relation to extended maternity leave, notice of dismissal and written terms of employment.

However, the potentially most valuable victory for part-time workers has been the confirmation by the European Court, in two recent cases, that the failure to allow them membership of an employer's pension scheme is discriminatory and therefore unlawful. It therefore follows that employees should be compensated for the loss suffered as a result of being deprived of membership of the pension scheme. Claims could, in theory, date back to at least 1986, when the European Court first established that the exclusion of certain employees from membership of occupational pension schemes contravened the Treaty of Rome. Part-time workers' access to other fringe benefits have also been widened by virtue of the Finance Act 1995. The Act states that part-timers must be eligible for membership of all new SAYE share option schemes, as well as qualifying employee share trusts and profit- sharing schemes.

Although part-timers' future rights seem secure, the position is much less clear regarding their ability to pursue compensation in respect of past adverse treatment. Employers are concerned at their potential exposure to make pension contributions in respect of their part-timers' past services in circumstances where they were not aware that such an obligation existed.

It is estimated that somewhere between 40,000 to 60,000 claims have been lodged by part-time workers asserting they have been unlawfully excluded from pension schemes. Questions have been raised regarding the appropriate time limit within which the industrial tribunals have the jurisdiction to hear such claims.

The present position is that national limits should apply, provided they do not exclude any remedy under European law. This means that under the Equal Pay Act, employees must submit any claim within six months of the date of dismissal. However, the Act only provides for compensation in respect of the two years prior to the date when proceedings were issued. In many cases, part-time workers' claims stretch back beyond this date. Lawyers are waiting for guidance from a higher court as to how the contradictions in the present position can be resolved. Until then, the industrial tribunals are likely to be busy.