Copple v. Littlewoods PLC
Historically, many employers did not allow part-time employees to join their pension scheme. Because part-timers were largely women, this exclusion amounted to indirect sex discrimination. Affected employees may claim backdated membership (although not earlier than 8 April 1976) while in employment, or up to six months after leaving employment, although employee contributions which would have been due during the backdated membership must be paid.
In this case, the court had to consider whether to exercise its discretion to give part-time members the right to backdated membership of Littlewoods’ pension scheme even though they would not have joined the scheme if eligible to do so. Littlewoods took the view that, where a person had not joined the scheme within three months of its being open to part-timers, this was good evidence that they would not have joined earlier, had they been allowed to, and therefore should not be allowed backdated membership.
In a unanimous decision, the court ruled that, despite the fact that part-timers had been wrongfully excluded from joining the scheme, it would only allow backdated membership where a person would otherwise have joined the scheme. If the person would not have joined the scheme, backdated membership would not be allowed as the exclusion had not caused any loss.
In deciding whether a person would have joined a scheme, had they been able to do so, the court held that it is for the claimant to prove this on the standard balance of probabilities test i.e. it was more likely than not that they would have joined. While not decisive, where a person had not joined a scheme on first being able to do so, this would amount to persuasive evidence the person would not have joined the scheme at an earlier date.
However, where a person had joined the scheme within a reasonable period of being able to do so, the court decided the period of backdated membership should include the period up to the date of joining and not exclude the usually small period between becoming eligible and the date of joining. What amounts to a reasonable period to decide whether to join a scheme will vary from case to case but this case suggests that seven or eight months is reasonable.
The case represents a welcome and sensible approach that an employee should only be compensated for loss caused by an employer’s breach of anti-discrimination law. It would clearly not be fair to require employers to pay for backdated benefits where an employee would not have joined a scheme, had they been able to do so, but now regrets having made that choice. As the court said, allowing backdated membership in this situation would put part-timers in a better position than full-timers who had decided not to join the scheme, which itself would be contrary to anti-discrimination laws.