The NHS may face a huge bill in backdated claims for pensions contributions. Pat Healy reports
The NHS seems ill-prepared for the potential outcome of legal moves over the rights of thousands of part-time workers previously excluded from its pension scheme.
Jane Keep, special projects adviser to the NHS Confederation, says that employers are ‘mindful’ that they may be faced with a huge bill for back pension contributions.
But no one has started working out the figures because no one knows how many people will be affected by claims that have been on ice for more than three years.
The European Court of Justice started the ball rolling in 1994 by deciding that part-timers were entitled to join occupational pension schemes under the equal pay provisions of the Treaty of Rome. Unison and other unions alerted members - and 100,000 lodged claims with industrial tribunals.
Test cases on basic principles have gone through industrial tribunals, employment appeal tribunals and the Court of Appeal. All rejected the argument that part-timers should be allowed to backdate their claims to 1976 instead of the two years allowed under British laws.
But the House of Lords has referred the final decision to the European Court, which should hear the case in about 18 months. Unions are confident of success because last December the court decided that two NHS staff were entitled to claim mental health officer status for pension purposes back to 1976.
It could mean an extra pension of pounds937 a year and a lump sum of pounds2,812 for a part-time NHS worker earning pounds5,000. They would have to make up contributions of around pounds1,800 to qualify, but that could be done by deducting it from the lump sum. Employers’ back contributions would be higher.
Dilys Cameron, a catering assistant at Prestwich Hospital, worked part- time while her three children were growing up, and joined the NHS pension scheme in 1986 when it was opened to staff working less than half-time.
If the European Court finds for the unions, Mrs Cameron would be able to claim 10 years’ back pension contributions.
‘If I’d had those extra years, I might have taken redundancy last year,’ she says. ‘As it is, my pension would not have been enough to live on. I am 60 next year, but I haven’t decided whether I am going to retire then.’
Unison senior pensions officer Glyn Jenkins thinks the government should negotiate instead of leaving people like Mrs Cameron in limbo. Otherwise the existing claims will drag on for at least another two years, as the European Court decision will have to go back to the Lords, which may take up to six months to hear it.
‘We have a breathing space in which to take stock,’ says Mr Jenkins. ‘It would be useful if the government accepted that it was a fair cop - these cases involve serious discrimination against a group of women workers, so why not sort it out in one go?’
Association of Healthcare Human Resource Management president Colin Pearson says he would expect ministers to tell the service to identify cases quickly rather than wait for people to come forward if the European Court judgement goes the unions’ way.
He says the financial effects could be substantial, with ‘a tremendous amount of work’ mostly falling on payroll staff to trace people who would qualify.
‘If there is a European decision, one doesn’t want to deny people their rights,’ he says. ‘There would be pressure on ministers to comply with such a decision, which would be fair and right and proper.’