Scottish Territorial Army veterans are funding a landmark test case against the Ministry of Defence to try to win pension rights denied them because they are classed as casual labour by Whitehall.

The 25 men and women from the west of Scotland, most of whom served during the height of the Cold War when the TA was expected to deploy as 25% of Britain's frontline strength against Soviet invasion, are paying legal fees from their own pockets.

Their action is to be heard before an industrial tribunal in London in June and is being brought under equal opportunities legislation because so many women volunteer as part-time soldiers. If they are successful, it could force the MoD to pay up to £122m in pensions to an estimated 36,000 veteran "Terriers" who currently receive nothing after decades of commitment.

TA soldiers called up for active service in Iraq and Afghanistan or those on home duty are entitled to the same rate of pay as regular colleagues of the same rank. Troops are expected to have funded future pensions by "abatement" - taking 8% from their gross salary to underwrite a non-contributory scheme. However, while TA personnel are penalised by having pay reduced by 8%, there is no pension at the end of their military careers.

Captain Tom Easton, 50, from Linwood, spent six years in the Parachute Regiment as a regular and 23 years in the TA, and often put in more than 100 days a year duty as a volunteer.

"The MoD chose to disregard EU legislation on the rights of part-timers. That's why TA personnel are now referred to as casual workers' rather than part-timers - to allow Whitehall to circumvent its financial responsibilities," he said.

"The people we're talking about sacrificed time with families and many lost promotion in civilian jobs to give something to the country. If we had gone to war in Germany in the 1970s or 1980s they would have been expected to put their lives on the line.

"All that seems to have been forgotten, despite the fact the TA is being used as a cheap temping agency to plug gaps in the frontline in Afghanistan and Iraq. More than 13,000 have served there in the past four years."

Captain Cyril Clements, 60, from Clydebank, who served 22 years with the TA in a field engineer regiment, added: "We've heard comments from MoD lawyers that awarding payment to our soldiers would be like a school janitor seeking to join a teacher's pension scheme. It's insulting and ignores years of dedication by thousands of men and women throughout the UK."

Five TA volunteers have been killed and 13 wounded in action in Iraq, and one killed and three wounded in Afghanistan since 2001.

Michael Morse, a Leeds-based employment rights' solicitor representing the TA claimants, said: "One has to wonder what signal this sends to volunteers about the MoD's view of their worth when they can put themselves at ultimate risk in the service of their country and qualify for nothing at the end of it. Employees in civilian firms would not stand for it."

The MoD has declined to comment on the case.