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Baroness Seear: Before the noble Lord sits down, will he tell us whether the regulations will be subject to the affirmative resolution procedure?

Lord Mackay of Ardbrecknish: I am almost certain that they are subject to the negative procedure.

Baroness Seear: We may wish to return to that matter.

The Earl of Buckinghamshire: I am extremely grateful to the Minister for drawing my attention to Amendment No. 171. I am just relieved to see that it is not to be moved this evening. On that basis, I beg leave to withdraw the amendment.

Clause 54 agreed to.

Clause 55 agreed to.

Clause 56 [Equal treatment rule: supplementary]:

Baroness Hollis of Heigham moved Amendment No. 145YS:

Page 31, line 36, at end insert:
("( ) The reference in subsection 55(3) to treatment which is less favourable is to treatment which for the purposes of the Sex Discrimination Act 1975 constitutes discrimination with the meaning of subsection 1(1) (a) or (b) of that Act.").

The noble Baroness said: In moving this amendment, I shall speak also to Amendment No. 145YUB. I shall speak fully to these amendments and more briefly to subsequent amendments.

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Amendment No. 145YS is the first of a series of eight amendments to Clauses 55 to 59. They seek to bring domestic law into line with European law following the six decisions on pensions in the European Court of Justice on 28th September 1994.

The right to equal treatment as regards occupational pensions stems from Article 119 of the Treaty of Rome, which requires equal pay for equal work between men and women. In the absence of domestic legislation to claim equal pay, individuals in all member states may rely directly on Article 119 before their national courts and the courts are required to interpret national law, so far as is possible, so that it is consistent with European law.

The Barber case of 17th May 1990 held that pensions were deferred pay and, therefore, covered by Article 119. Many of the subsequent issues followed from that case. The equal pay act, with which, therefore, pensions are now aligned, allows employees to bring claims to industrial tribunals for discrimination in pensions. However, unlike the Sex Discrimination Act, the equal pay Act does not embody the concept of indirect discrimination (which is the subject of Amendment No. 145YS) where individuals are compared with individuals, whereas many of the problems in pensions are indirect and can be determined only by comparing the experience of one group with another and then seeing how much that difference is attributable to gender.

The obvious example here would be part-time workers. Even if male and female part-time workers were treated similarly, none the less, given the fact that part-time workers are overwhelmingly women—indeed, nearly half of all women work part time, while only about 5 per cent. or 7 per cent. of men do so—if part-time workers enjoy fewer rights than full time workers, they experience indirect discrimination.

At present the Bill follows the equal pay Act and brigades pensions with that and, therefore, does not rectify indirect discrimination. We believe that it must do so. Indeed, that is vitally important to the pension field. The Barber case also left unanswered further questions which the European Court cases tested last year. For example, the first of those concerned the date from which benefits had to be equalised. Secondly, the time limits within which claims had to be made were considered. For example, if the rights of full timers under the Barber case were equalised back to 1990, part-timers could join a scheme backdated to 1976 when Article 119 applied; but on what conditions? Thirdly, the court considered which benefits precisely have to be equalised: public as well as private occupational pensions or state as well as private pensions.

The Bill could have clarified the position in some of those areas. However, it has failed to do so. Therefore, employers and employees will not have a clear understanding of their duties and rights. That is likely to result in more complex cases and higher costs. Moreover, it will probably not end appeals to the European Court of Justice on the grounds that Article 119 will have to be prayed in aid to resolve all of the issues that the Bill fails to address.

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Many of the issues are featured in separate amendments. However, perhaps I may now move precisely to Amendment No. 145YS. That amendment would make clear that the equal treatment rule provided for in Clause 55 covers both direct and indirect discrimination. As I said, the Equal Pay Act did not incorporate the concept of indirect discrimination in 1970. However, it was defined by the Sex Discrimination Act 1975.

The clarification is necessary because the ECJ ruled that Article 119 of the Treaty of Rome should be interpreted as incorporating the concept of indirect discrimination, not least, as I said, in the context of part-time workers. Unless we do so, the ECJ's decisions in the cases of Fisscher and Vroege, for example, regarding the position of part-timers will not be incorporated into UK law.

The second amendment, Amendment No 145YUB, is again part of the wider subset. The amendment would ensure protection for a person who raises a question over unequal pension provision. In that sense, it is not dissimilar to an amendment moved by my noble friend Lady Turner on the first day of Committee regarding protection for unfair dismissal of trustees. Under the amendment, the individual would be able to claim damages for victimisation under the Sex Discrimination Act if he or she suffered any detriment as a result of raising specifically issues of equal treatment. The effect of that protection would be that an employer would risk unlimited damages in respect of such victimisation. Therefore, the first two amendments on equal rights, given the judgments of the European Court of Justice, are designed to ensure, first, that the Bill covers indirect discrimination, which we think is vitally important to pension law; and, secondly, that it protects against unfair dismissal and victimisation. I beg to move.

Baroness Seear: I should like briefly to support the amendment and endorse the remarks made by the noble Baroness, Lady Hollis. The issues are implicit and part and parcel of the battle that many of us, including the European Commission, have been fighting for a long time; namely, to get rights for part-time workers. That would include the pension rights that we are discussing. It would also include not only female part-time workers but also male part-time workers. As an increasing number of men—and this is likely to continue—will spend at any rate part of their lives in part-time jobs, we must take on board when considering such matters the fact that we are moving into a situation in the labour market where both men and women will have periods of employment which are much less than full time. Unless the rights of male and female part-time workers are covered in the legislation, it will have very grievous effects on the ultimate pensions that people of both sexes will be able to claim when they finally retire.

8.45 p.m.

Lord Mackay of Ardbrecknish: At the risk of bringing the politically correct movement down on my

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head, I should like to say that it is with some relief that I move from the minimum solvency requirement to something as simple as sex—

Baroness Seear: It is not just a matter of sex.

Lord Mackay of Ardbrecknish: We have looked at Amendment No. 145YS—indeed, the noble Baroness may be more pleased with the second part of my reply to her amendments than she anticipates—and we have concluded that the amendment is unnecessary. We believe that importing a reference to Section 1(1) (a) of the Sex Discrimination Act into Clause 55 will not achieve anything. That provision, which defines what is generally known as "direct discrimination", merely states that that means less favourable treatment of a person on the grounds of a person's sex. Those words can be found in Clause 55. The reference to Section 1(1) (b) of that Act would make explicit that "less favourable treatment" in Clause 55 includes—as the noble Baroness pointed out—what is known as "indirect discrimination". However, I can assure the Committee that there is no doubt that Clause 55 already covers such treatment because, as drafted, it mirrors the wording of the Equal Pay Act 1970. Indeed, the House of Lords, in the form of our noble and learned friends, the Law Lords, has confirmed that indirect discrimination is covered by that Act. The amendment would not limit the scope of those provisions to treatment which is unlawful under the Sex Discrimination Act, but it would narrow the expression, "less favourable treatment" so as to cover only such treatment as is within Section 1 of the Sex Discrimination Act, whereas those words would otherwise bear their normal wider meaning. I hope that that explanation goes some way towards helping the noble Baroness.

It may be helpful to remind the Committee briefly—as the noble Baroness has already done; and, indeed, I repeat the words used by her noble friend earlier when I say that I broadly agree with what she said in her introduction—that the European Court of Justice has made it clear that pensions are pay. We therefore consider it appropriate that domestic legislation should follow the pattern established for equal pay which has now existed for some 25 years, together with a body of case law. I can assure the Committee that adopting that approach will not mean a more restricted approach to equality than that covered by the Sex Discrimination Act—indeed the contrary is true. With those assurances, I trust that the noble Baroness will feel able to withdraw the amendment.

I turn now to Amendment No. 145YUB. As the noble Baroness has explained, the amendment would bring the provisions of this Bill within the ambit of Section 4(1) of the Sex Discrimination Act 1975. That would mean that individuals who wished to bring an equal treatment claim before a tribunal or court would be protected against vitimisation on account of the fact that they had done so. I can sympathise with the intention behind the amendment, which is to provide potential claimants with the added security of knowing that they will have protection from any reprisal by their employer, and I shall carefully consider what the noble Baroness has said. However, I am not able to accept the amendment

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today because the Sex Discrimination Act is worded in very general terms and covers a number of different areas which may have implications for a number of other departments which will need to be consulted. Nevertheless, we shall look most carefully at that aspect because we fully appreciate the argument in favour of the kind of cover that the noble Baroness advocates. We shall certainly look to see how that might best be achieved.

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