Rethink expected on pension ruling
Private sector contract caterers should not assume last week's High Court ruling on pension rights for staff taken on from local authorities is set in stone, according to a top employment lawyer.
Under the ruling, the High Court declared that pension rights were not covered by European employment protection laws. Therefore, when private firms win contracts through the compulsory competitive tendering process, they do not have to guarantee the same pensions as previously provided by local authorities.
The ruling was in response to a test case brought by 11 Lancashire dinner ladies taken on by BET Catering Services after it won the local authority school meals contract in 1994. Whereas the women had previously been entitled to be part of the Local Government Superannuation Scheme, they were not covered by BET's scheme because they worked part-time and earned less than £15,000 a year.
But Tim Russell, employment law partner at Hammond Suddards, said the High Court's decision could be reversed within months.
"In the short-term this is good news for private contractors and bad news for the employees they take on after winning contracts under compulsory competitive tendering," Mr Russell told Caterer.
"But the decision is not set in stone. I wouldn't be surprised if the decision was reversed within months," he added.
"This is another example of the UK being hard-nosed on employment rights. There will be great pressure on the Government to change this from both trade unions and from Europe, and the courts may take a different view as time goes on," Mr Russell said.
At BET, chief executive Jim Walker defended his company's actions and said it had worked according to the rules when it bid for the Lancashire contract. "BET is naturally sympathetic to those employees concerned, but the company acted strictly in accordance with the instructions from Lancashire County Council," said Mr Walker.
"In line with the Government's then guidelines, the council had specifically asked BET not to include pension benefits in their tender submission, despite its willingness to provide equivalent benefits for employees."
