Law biased against part-time workers, Lords rules: Ministers forced to improve job protection. Barrie Clement and Patricia Wynn Davies report

EUROPE effectively brought Britain to heel yesterday over equality legislation when the House of Lords ruled that the Government was unlawfully discriminating against part-time workers, 500,000 of whom are women.

The decision means that under European Union law, ministers will almost certainly be forced to introduce a new statutory instrument superseding regulations providing inferior employment protection to part-timers.

The law lords' decision, by a majority of four to one, was acclaimed by opposition parties and the Equal Opportunities Commission (EOC), but the right-wing Institute of Directors feared a massive cost burden on employers and predicted it would cost jobs. Lawyers believe that 'with a will', ministers could push the necessary paperwork through Parliament within a month or six weeks.

Yesterday's decision is likely to mean that the Government will have to extend its employment protection laws - covering unfair dismissal and statutory redundancy payments - to anyone with two years' service who works eight hours or more. Under present law an employee who works between 8 and 16 hours a week has to be employed five years to qualify.

Possibly of more long-term significance was the implication that the EOC, the sponsor of the litigation, will be allowed to challenge legally the Government's adherence to European legislation. The Court of Appeal decided last year that the commission was merely an advisory body. The ruling opens up opportunities for other arguments against British law, including the Government's abolition of wages councils which set minimum pay for about 2 million women.

Lord Keith, sitting with Lords Jauncey, Lowry, Browne-Wilkinson and Slynn, said the Government had not established that the indirect discrimination against women involved in the Act was 'objectively justified'.

He rejected the Government's claim that the provisions resulted in the availability of more part-time work. Anne Widdecombe, the Employment Minister, last night pointed out that the discrimination between full- and part-time workers was first introduced by a Labour government in 1975.

She said that the 19-page document had yet to be digested and there was no clear indication whether new statute was required. However, the judgment 'would be implemented'.

The ruling could have unwelcome effects for the Government in the run-up to the European elections on 9 June.

Anti-European Tories said the judgment showed that the opt out from the social chapter of the Maastricht treaty negotiated by John Major had had no effect in stemming the impact of European social legislation in Britain.

Kamlesh Bahl, chairwoman of the EOC, said the decision was a 'stunning victory' for the campaign to get equal treatment for part-time workers.

John Prescott, Labour's employment spokesman, said he was delighted by the ruling which, he claimed, would 'put to an end, once and for all, to the exploitation of part-time workers by unscrupulous employers'.