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Employment Tribunal rejects judicial pension scheme changes on equality grounds

There’s nothing a barrister likes more than to see a happy judge, even if it’s not the barrister who has cheered the judge up. So joy radiates this week from the Employment Tribunal following its preliminary decision in McLoud and Mostyn (and others) v The Lord Chancellor and the MOJ.

McLoud and Mostyn (and others) v The Lord Chancellor and the MOJ (Judgement - PDF)

There were in fact 208 ‘others’, such that a significant proportion of the judiciary found themselves successful, in a preliminary question at first instance, in their long-running dispute with their Whitehall employers about changes to the judicial pension scheme.

Judicial pension scheme changes: some background

In April 2015, a new judicial pension scheme was implemented under the Public Service Pensions Act 2013, which was less generous than the existing scheme but which was intended only to affect newer recruits.  Longer-established (i.e. older) judges would be protected by transitional measures either until retirement or the end of a ‘tapered’ period.  This was accepted by the Respondents to be detrimental to younger judges and also to female and BAME judges who were more likely to feature in the newer cohort.

The transitional pension measures and the Equality Act: legal arguments

The Respondents argued that the transitional measures and deliberate preferential treatment were a proportionate means of achieving a legitimate aim that put them outside the scope of the prohibitions contained in Council Directive 2000/78/EC article 6(1) and the Equality Act 2010 ss.13(1) and (2).  However Employment Judge Williams did not agree and decided this issue in the Claimants’ favour.

The stated aim, to treat one group more favourably, could not (he decided) be a legitimate aim.  The Tribunal noted that the government balanced its roles as legislator and controller of public finances, and that it employed many public servants.  Although an ultimate outcome of consistency across those in public service could be a legitimate aim, the Respondent needed a far more cogent explanation as to how this would be achieved in this case.

Protected judicial remuneration: supporting legislation

The Claimants argued that there was a constitutional principle dating back to the Act of Settlement 1701 securing the tenure of judges through a guaranteed remuneration.  This was reinforced, the Respondents accepted, by the Constitutional Reform Act 2005 s.34 in relation to protecting salaries albeit that this did not extend to protecting judges against the consequences of pension law or tax.  However the Respondent argued that the Tribunal would be treading on the toes of government and the electorate if it were “trespass into areas which are not its proper purview”; in other words, this was a matter in which the ET ought not to meddle, as it had been decided by Parliament.

Derogation from the principle of equal treatment: the Tribunal’s ruling

The Respondents nevertheless accepted that it was for them to justify a derogation from the principle of equal treatment.  In those cases where such derogation had been tolerated, it was because a clearly stated legitimate aim had been achieved by proportionate means.  Here Judge Williams could not discern such an aim from the Respondent’s evidence, save to protect the pensions of those members of the judiciary who had already been in service for many years.

However “to set out consciously to treat more favourably a group who, as was well known at the time, were the least adversely affected by the reforms appears counter-intuitive and at very least calls for such a rational explanation.  In the absence of such explanation it would be difficult to resist [the Claimants’ Counsel] Mr Beloff’s categorisation of the result as bizarre” and

“...an aim which amounts to an intention to treat one group more favourably and another less favourably, solely by reference to the age of those in the groups cannot, without further rational explanation for the reason for it, be legitimate.  An aim thus expressed amounts to a declaration of intent to do precisely that which the statute prohibits.  The respondents have failed to advance any such rational explanation of their reason”.

The legal implications of the case

This was a first instance, preliminary ET decision fought between two definitively heavyweight teams.  Though a detailed, careful and thoroughly reasoned judgment, it will inevitably be considered by the EAT or a more senior tribunal if the government cannot contrive a more compliant, yet affordable scheme.  Judicial salaries and pensions cannot be secret, so a quiet compromise to keep this out of the knowledge of other public sector workers is highly unlikely. 

Civil servants at all levels will be alert to any inconsistency or unfair transitional provisions in other future changes in remuneration, taxes or pensions.

 

Graeme Kirk / 19th Jan 2017


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