Judges’ and firefighters’ legal action
On this page:
- McCloud judgement – unlawful age discrimination
- Transitional protections
- Age discrimination
- Court of Appeal judgement
- Supreme Court
- Judges' and Firefighters' pension schemes, legal decision – FAQs
Judges' and firefighters' pension schemes
The government has been denied leave to appeal legal challenges to the judges' and firefighters' pension schemes.
The courts have found that, while the new arrangements introduced were not inherently unlawful, the protections introduced for those within 10 years of retirement were discriminatory in nature and the government did not have a legitimate aim in exempting those provided with protections from change.
Prospect has been engaging with the Cabinet Office on this for several months. Now there is clarity that the government has not been provided leave to appeal, these cases will go to a remedies hearing.
Prospect has been clear in its representations to the Cabinet Office and HM Treasury that civil service pension scheme members should not have to bear the cost of the government’s unlawful discrimination against younger members of public sector pension schemes.
That was the key message to Rupert McNeil, the civil service’s chief people officer, in a letter written fromProspect on behalf of all the civil service unions* on 14 August 2019. Read the full letter.
McCloud judgement – unlawful age discrimination
In 2019, the government lost a major legal case concerning age discrimination and reform to the judges’ and firefighters’ pension schemes in 2015.
The Court of Appeal’s ruling will have far-reaching consequences as the ‘transitional protections’ that have been deemed discriminatory are also present in all of the major public sector pension schemes, including the Civil Service Pension Scheme.
The Court of Appeal’s judgement is commonly known as the McCloud judgement.
The transitional protections that have been deemed discriminatory treated existing pension scheme members who were in service on 1 April 2012 differently based upon age.
Pension scheme members within 10 years of normal pension age on 1 April 2012 were allowed to continue their membership of their existing pension scheme.
Members with more than 13.5 years to normal pension age became members of the new 2015 schemes on the 1 April 2015.
Those with between 10 and 13.5 years to pension age had a tapered date on which they would join the new scheme.
These protections for the oldest workers were one of two major concessions offered by the coalition government to trade unions in order to reach agreement on reform of public sector pensions for the second time in a decade.
The original proposal from the government was for all members to move to the reformed schemes in April 2015.
Interestingly, Lord Hutton’s 2011 report ‘Independent Public Service Pensions Commission’, which influenced the government’s proposals for reform, noted that “age discrimination legislation also means that it is not possible in practice to provide protection from change for members who are already above a certain age.”
In a Supreme Court judgment in 2012, Lady Hale explained the rationale that forms the basis for deciding if age discrimination is lawful:
“The means chosen have to be both appropriate and necessary. It is one thing to say that the aim is to achieve a balanced and diverse workforce. It is another thing to say that a mandatory retirement age of 65 is both appropriate and necessary to achieve this end.
“It is one thing to say that the aim is to avoid the need for performance management procedures. It is another to say that a mandatory retirement age of 65 is appropriate and necessary to achieve this end.
“The means have to be carefully scrutinised in the context of the particular business concerned in order to see whether they do meet the objective and there are no other, less discriminatory, measures which would do so.”
Court of Appeal judgement
The key content of the judgment said: “We have found that in both the judges’ and firefighters’ cases the manner in which the transitional provisions have been implemented has given rise to unlawful direct age discrimination.
“In neither case could the admitted direct age discrimination be justified. In the Judges’ case, we see no error in the reasoning of Judge Williams either in his assessment of aims or means.
“In the firefighters’ case, we take the view that there were no legitimate aims and since we are satisfied that the contrary conclusion would not be open to an employment tribunal, we have made that determination ourselves and not remitted the case, save for the determination of remedy.”
In the firefighters’ case, the Court of Appeal importantly noted that: “the Government’s rationale for the protective provisions did need to be supported by evidence”.
QC Andrew Short, on behalf of the appellants, argued: “…that the closer the scheme members are to retirement, the less they would be affected by the reforms”.
The argument, put forward by QC Short and supported by evidence, was that those furthest from retirement would have the greatest loss. This helped lead to the Court’s conclusion that “the suggestion that older firefighters would be less able than the younger firefighters to make changes in their expenditure leading up to retirement is unsupported by evidence”.
The government was refused leave to appeal to take the cases to the Supreme Court. As a result, the cases were remitted to an employment tribunal remedy hearing. Prospect is monitoring developments in the case.
Judges' and firefighters' pension scheme legal decision – FAQs
Based on the feedback and questions that we have received from members so far, we have developed the following frequently asked questions and answers. This is a living document and will be updated as further queries come in.
Does the legal judgement and forthcoming changes affect me?
On 15 July 2019, the government issued a written ministerial statement and confirmed that as ‘transitional protection’ was offered to members of all the main public service pension schemes, the difference in treatment will need to be remedied across all those schemes, including the civil service pension schemes.
Benefits earned to date are safe and Prospect will be lobbying to ensure that the impact of the judgement is that pension benefits will be levelled up rather than down.
A remedy will now be developed for each of the public sector schemes. Until further details about the remedy are known, there is no further information that we can provide. As soon as further information is available, we will update members.
Why did Prospect agree to these unlawful arrangements?
In the negotiations between government and unions on public sector pension reform, the government's original position was in line with Lord Hutton’s report that all public sector workers should be moved into the new schemes.
The Hutton report went as far as saying that there should not be protections as these would be age discriminatory.
The TUC day of action in 2011 was a success and it brought about two key concessions from the government.
The first was an 8% improvement in the value of the new schemes, such as Alpha in the civil service pension scheme.
The second was protections for the oldest workers based on a timescale in line with a policy commitment on future reforms to the state pension.
Prospect members were balloted on the deal reached with the government for the civil service pension scheme and voted in favour of it on the basis that it was the best that could be achieved through negotiation.
Why were the protections based on age rather than another factor, such as length of service?
When changes to public sector pensions were being negotiated, protections were sought for those closest to retirement as they would have the least amount of time to adjust their pension saving if they were placed in the new schemes.
The protections put in place were therefore based on members' ages and not the length of service that they had in the scheme.
The Court of Appeal verdict in December was that the government did not have a legitimate aim with the protection arrangements.
This is because the protections were protecting those who would be least affected because they had built up the most service in the scheme.
This same principle could have applied had the protection arrangements been based on service rather than age.
Who was given protection from the pension changes?
The protection arrangements were based on members' ages as at 1 April 2012.
As at this date, if members were within 10 years of their normal pension age (NPA), they were allowed to continue contributing to their existing scheme.
Members more than 13.5 years from their NPA were moved into the new schemes, such as Alpha, on 1 April 2015.
Those within 10 and 13.5 years of their NPA would move into the new schemes on a date between 1 April 2015 and their NPA.
This date would be based on their age in years and months as at 1 April 2012.