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Lord Clark of Kempston: My Lords, I thank my noble friend for his reply. It would have been much nicer if a message could be sent from this House to the other place saying that the anxieties I have tried to express would be considered carefully in another place and by the Government. That would encourage my colleagues in another place to press the matter harder than they might otherwise do. My noble friend is absolutely right. I shall see that the argument continues. That may be on Third Reading; if not then I know a lot of people in another place. I might be able to persuade one or two of them to press the Government there.

I should like to thank my noble friend Lady O'Cathain for her support. The noble Lord, Lord Eatwell, referred to bank guarantees and subordinated loans. One can also, as an employer, deposit securities with the pension fund, so there are many ways in which employers can do it. My concern is with the cash flow problem of industry. I accept the concessions—if they are concessions—that have been made. I refer to the valuation over six months rather than on a one day basis. I also accept the fact that the one-year period and the five-year period are a concession. Nevertheless, it does not in my view tackle the liquidity position of a company. However, in view of the lateness of the hour and of the fact that my noble friend has invited me to get my colleagues in another place to take up the matter, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 130 to 133 not moved.]

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11.30 p.m.

Lord Lucas moved Amendment No. 134:

Page 32, line 2, leave out (" 3") and insert ("(Prohibition orders)").

The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 3. I beg to move.

On Question, amendment agreed to.

[Amendment No. 135 not moved.]

Clause 53 [Sections 48 to 52: supplementary]:

[Amendment No. 136 not moved.]

Clause 55 [Equal treatment rule: supplementary]:

Lord Lucas moved Amendment No. 137:

Page 33, line 8, after ("other,)") insert:
("( ) for section 2(4) there were substituted—
"(4) No claim in respect of the operation of an equal treatment rule in respect of an occupational pension scheme shall be referred to an industrial tribunal otherwise than by virtue of subsection (3) above unless the woman concerned has been employed in a description or category of employment to which the scheme relates within the six months preceding the date of the reference.",").

The noble Lord said: My Lords, in moving this amendment I wish to speak at the same time to Amendments Nos. 140 and 141. Amendment No. 137 will replace Section 2(4) of the Equal Pay Act 1970 for the purposes of Clause 54 of the Bill. We are concerned that without this amendment there may be confusion about the operation of Section 2(4) of the Equal Pay Act in the context of pensions. We wish to clarify the position. The substitution of this amendment will have the same effect as Section 2(4) of the Equal Pay Act and will impose the same time limit. The effect of Amendments Nos. 140 and 141 is to bring the terminology used into line with that in the Equal Pay Act, on which much of the equal treatment provisions of the Bill are based. I beg to move.

Baroness Hollis of Heigham: My Lords, I am sorry that we are dealing with some of these issues at such a late hour. However, when we agreed two Report days we had not realised that there would be quite so many government amendments and other amendments which perhaps we might more usefully have dealt with at the Committee stage. We now come to issues which are properly Report stage issues; that is, further clarification, refinement and discussion of issues first raised in Committee.

With Amendment No. 137, our understanding is that it appears to impose a time limit on claims for lack of an equal treatment rule of six months from the end of the description or category of employment. I am thinking, for example, of a woman who had been a part-timer for, say, 10 years while her children grew up and then went back into full-time work for another 15 years up to retirement and discovered only then that she had been differently treated as a part-timer when reviewing her pension benefits on coming up to retirement. There must be a danger that this would bar the majority of affected people from claiming and that as a consequence the Government face being taken

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straight back to the European Court of Justice on adequacy of remedies. Can the Government reassure the House that that is not the case?

Lord Lucas: My Lords, I do not believe that anything in this amendment changes the position which we believed applied at Committee stage—that is to say, that the relevant section of the Equal Pay Act applied. It has merely been pointed out to us subsequently that there is a possibility of some confusion because the Equal Pay Act was not, at the time it was written, designed to deal with pensions. The purpose of this amendment is to re-write that particular section of the Equal Pay Act to deal with the problems of interpretation which have been suggested to us. I am told that the answer to the question of the noble Baroness about the six-months' time limit is yes.

On Question, amendment agreed to.

Baroness Hollis of Heigham moved Amendment No. 138:

Page 33, line 10, at end insert:
("( ) references to the period of two years before the date on which proceedings are instituted, for the purposes of subsection 2(5) of the Equal Pay Act 1970 shall be interpreted as references to payments of benefits during such period and not to service giving rise to benefits during such period.").

The noble Baroness said: My Lords, in moving this amendment, I shall speak to Amendment No. 139. This follows up some of the issues of the previous amendment. At Committee stage we raised a number of issues presented to women by the series of European Court judgments last September, plus Barber and Coloroll.

At Committee stage we were particularly concerned about the issue of direct as opposed to indirect discrimination. We were also concerned about the time limit for damages and how far back those damages may be claimed. The Minister subsequently wrote to me very helpfully. I am hoping that he will be able to put some of those assurances on the record tonight.

As regards indirect discrimination, the Minister explained in his letter that as pensions were deferred pay they were indeed covered by the Equal Pay Act 1970 where the law Lords ruled that that also refers to indirect discrimination and therefore it was not necessary to invoke the Sex Discrimination Act 1975. I believe that the Minister referred to the 1987 case of Rainer v. Greater Glasgow Health Board. It would be helpful to have that confirmed.

I propose the amendment which applies to the issue of time limits. The amendment seeks to ensure that the limit on retrospective claims for equal treatment will not apply in respect of the period of service which is taken into account in the calculation of members' benefits, but, as with equal pay, only to the back payment of benefits, otherwise we fear that the current ambiguities will remain.

Our understanding is that only two years of back pension payments can be claimed but that service back to April 1976 must be taken into account in the discrimination conditions of entry and back to May 1990 in the case of discriminatory benefits. We believe that

13 Mar 1995 : Column 701

is what the European Court of Justice had in mind in the cases of Fisscher, Vroege and Barber. This amendment would clarify and confirm that reading. We hope that the Minister will agree. I beg to move.

Lord Mackay of Arbrecknish: My Lords, I am grateful to the noble Baroness for setting out what is intended by Amendments Nos. 138 and 139. Amendment No. 138 is designed to allow people who have been excluded from a scheme to be awarded up to two years retrospective benefits of that scheme. However, the objective of Section 2(5) of the Equal Pay Act, when modified by powers under the Bill, will not be to provide for the award of any benefits. Our intention is to provide a period of equal access to the scheme which, together with any continuing membership of the scheme in the future, will provide an improved prospective entitlement to pension benefits on retirement.

The whole purpose of the equal treatment clauses is to ensure that men and women in employment have equality of access to pension schemes and to equal pensions from those schemes when they retire. In order to have the benefits one must clearly first be a member of the scheme. The benefits then flow from that membership of the scheme. We propose a two year limitation on such awards of retrospective membership. That is entirely consistent with the regulations which have applied since 1978 to other types of equal access case.

Turning to Amendment No. 139 the European Court of Justice, in the Barber and subsequent clarification cases, established the principle that equal treatment is to be provided for service from 17th May 1990. Thus all occupational pension schemes must now provide equal treatment from that date. This is what the provisions of Clauses 54 and 55 require.

The court also ruled in the Dutch cases of Vroege and Fisscher that the cut off date of 17th May 1990 did not apply to the right to join a scheme and that, in appropriate cases, access could be granted as far back as 1976. However, it went on to make clear that national time limits may be applied to such cases.

As I said in Committee, the Bill provides for the time limits which apply under the Equal Pay Act to be applied in the event of disputes and enforcement concerning the equal treatment rule. They will place a limitation on retrospective membership of schemes of two years before the date of claim. The application of the time limits is entirely logical given that the European Court has ruled, as the noble Baroness rightly said, that occupational pensions are pay, and is consistent with the approach which has been taken since 1978 under the existing, more limited equal access regulations made when the noble Baroness, Lady Castle, was Secretary of State for Social Services.

Those regulations—known as the Occupational Pension Schemes (Equal Access to Membership) Regulations 1976—enable those who have been unlawfully excluded from membership of their employer's pension scheme to claim access to membership on an on-going basis and for two years

13 Mar 1995 : Column 702

prior to the date of their claim. Even at this late hour and in the absence of the noble Baroness, Lady Castle, I am delighted to be able to agree with something that she did. We usually joust about other matters on which we disagree.

I was asked about indirect discrimination and whether that was covered by the Equal Pay Act. I confirm that, as I said in my letter to the noble Baroness, the case of Rainer v. Greater Glasgow Health Board confirmed that indirect discrimination is covered by the Equal Pay Act 1970. With those explanations of these difficult matters in which different time scales and different issues come together, I hope that the noble Baroness will withdraw her amendment.

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