Guernsey: There May Be A Detriment, But Is There A Loss?

This was the all important question asked recently in England's Court of Appeal.

Whether you are a female part-time worker, or an employer responsible for employing female part-time employees, you may be very interested to learn of a recent UK Court of Appeal decision, particularly if your business operates a voluntary occupational pension scheme.

In Copple & Ors v Littlewoods Plc [2011] it was held that female part-time workers who had previously been excluded from Littlewoods' occupational pension scheme had suffered indirect sex discrimination. In a mass party action which involved over one hundred women, it was alleged that they had all suffered discrimination at the hands of the well-known organisation by being denied access to its pension scheme during previous years (the 'closed periods'); it was a requirement that employees work a sufficient number of hours per week before being eligible to join, thereby making it difficult for those only working 12 hours per week.

Littlewoods has since changed its policy concerning eligibility for the pension scheme to include all employees but has had to concede that during the closed periods its female part-time employees had suffered indirect sex discrimination which could not be justified. To provide different rules for part-timers and full-timers without justification is a breach of equality. Denying its female part-time employees a right to participate in the occupational pension scheme was a detriment to those affected.

So despite accepting that it has indirectly discriminated against these women on the grounds of their sex, why was Littlewoods successful on 3 separate occasions? Littlewoods argued before the Employment Tribunal, the Employment Appeal Tribunal and now, recently, the Court of Appeal, that despite its detrimental treatment of these women, they had in fact suffered no loss and should not be compensated. To some this may sound harsh but not according to the Court of Appeal.

Littlewoods was able to apply an 'opt out' principle claiming that there was no evidence to suggest that any of the affected women would have joined the pension scheme even if they had been eligible during the closed periods. The organisation adopted an approach whereby it assumed that if a woman had failed to join the scheme within three months of becoming eligible to do so, then it could correctly assume that she would not have joined it earlier, even if she had been eligible by working the requisite numbers of hours. It was not appropriate to award any financial compensation to the women, or grant a declaration of entitlement to retrospective membership of the pension scheme, as no women could be shown to have suffered a loss as a result of the discrimination. All three Courts agreed and hailed Littlewoods' approach as being pragmatic and correct.

The Court of Appeal felt that the approach was in-line with previous European Court decisions which confirmed that equal treatment does not necessarily mean more favourable treatment; Littlewoods could not be expected to compensate those affected employees for denying them the right to join the pension scheme when there was nothing to suggest that the women would have joined in any event - to give them retrospective membership would be a favourable benefit and, essentially, they would be in better position. Using powerful words, Lord Justice Elias stated "The reason why none of the women since joined the pension scheme was not based on discrimination, but one of choice...human experience tells us that if a woman really had wanted to join the scheme, one might have expected her to join once she became eligible to do so". To join a pension scheme some months after becoming eligible to do so could not support the contention that the affected employees would have joined during the closed period.

The important lesson here is that if you are a Channel Islands business employing full and part-time employees, you need to be mindful that any treatment which is different between those employees could be discriminatory; if so, you could be liable to pay compensation if the affected staff can show they have suffered a loss as a result!

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