Public Sector Pensions – Disadvantaged Judges Triumph in ‘Ageism’ Test Case

In a test case of importance to all public sector employees, a tribunal has ruled that transitional provisions put in place to prepare the way for full adoption of a new judicial pension scheme fell foul of the ban on age discrimination.

The scheme was introduced in response to a report of the Public Services Pension Commission which recommended wholesale public sector pension reform. The scheme was considerably less valuable to its members than its predecessor had been, both in terms of benefits received and the tax treatment of such benefits.

The transitional arrangements gave full protection against such disadvantages to judges who were members of the earlier scheme prior to 1 April 2012 and who were born on or before 1 April 1957. However, judges born between that date and 1 September 1957 were only entitled to protection on a tapering basis and those born after 1 September 1960 received no protection at all.

In those circumstances, a group of judges, including some members of the High Court bench, who fell within the disadvantaged group launched Employment Tribunal (ET) proceedings against the Lord Chancellor and the Secretary of State for Justice, alleging age discrimination.

In ruling on the matter, the ET noted the need to maintain public sector pensions at affordable levels and that it was for the Government to determine policy objectives and the appropriate allocation of resources. However, in upholding the judges’ complaints, it found that the Government had neither established that the differential treatment was in pursuit of a legitimate aim nor that the discriminatory means adopted were objectively justified.

The ET noted that the disadvantaged group was defined by the age of those within it and that the Government had failed to advance any rational explanation for the discriminatory treatment. The pursuit of consistency in the approach to pension reform across the public sector was not capable of justifying what was a clear derogation from the principle of non-discrimination.

In ruling on the Government’s challenge to that ruling, the Employment Appeal Tribunal (EAT) found that, in concluding that the discriminatory treatment was not in pursuit of a legitimate aim, the ET had misunderstood or misapplied the facts of the case. In dismissing the appeal, however, the EAT ruled that the extremely severe impact of the transitional provisions on judges within the disadvantaged group far outweighed the public benefit of instituting pension reform consistently across the public sector. The unequal treatment of the affected judges was thus not a proportionate means of achieving a legitimate aim.

Employers Can Always Recruit the Best Candidate? Oh No, They Can’t!

At first blush, it might appear obvious that employers are entitled to take on the best candidate for a job. However, as one case concerning a highly qualified medical practice manager showed, immigration law requires that suitable, EU-resident, candidates must be preferred to those from overseas.

The case concerned an Indian national with a first-class degree and an MBA who was recruited as the practice’s business development manager. The practice, which praised her excellent presentation, enthusiasm and great ideas, selected her from a list of 40 candidates. However, following an investigation, the UK visas and immigration section of the Home Office was not satisfied that a genuine effort had been made to recruit an EU resident instead of her and the practice was refused a licence to sponsor overseas workers entering the UK.

In ruling on the practice’s judicial review challenge to that decision, the High Court identified a number of flaws in the Home Office’s approach. The recruitment exercise had not been a charade, the post had been properly advertised, interviews had been carried out and the practice had been entitled to stipulate that the successful candidate should have an MBA qualification.

In rejecting the practice’s case, however, the Court noted that the effect of the residential labour market test applied by the Home Office is that a worker who is settled within the EU, and who is suitable for an advertised post, should be recruited in preference to a non-settled worker, even if the latter is considered to be the better candidate.

It appeared that, on receipt of 40 applications, the practice had proceeded to create a shortlist of five. There was nothing in principle objectionable about that but, having found that the overseas worker was the best, indeed the only suitable, candidate amongst the top five, the practice was not entitled to move directly to appoint her without considering the suitability of settled workers who had not been shortlisted. In those circumstances, the Home Office’s view that the practice had not made a genuine attempt to recruit from the residential labour market was not irrational.

The Government Responds to the Taylor Review of Employment Practices

In July 2017, Matthew Taylor, Chief Executive of the Royal Society for the Encouragement of Arts, Manufactures and Commerce and a former policy chief under Tony Blair, issued his report, commissioned by the Government, on how employment practices need to change in order to keep pace with modern business needs.

The Review, entitled ‘Good Work’, considered a range of issues, including the implications of new forms of work, the rise of digital platforms and the impact of new working models on employee and worker rights, responsibilities, freedoms and obligations. 

The Government has now published its response to the Review, setting out a plan of action for taking forward the recommendations, and launched four consultations on key areas covered. These are:

Former LLP Member Strikes Important Blow in Whistleblowing Case

In an important decision for limited liability partnerships, the former managing partner of a law firm who claimed that he was persecuted for whistleblowing had his hopes of winning £3.4 million in compensation boosted by the Court of Appeal.

The man had prepared a report after the firm’s board received a complaint of bullying against its senior partner. Before he could submit it, however, his resignation from his positions as managing partner and compliance officer was demanded. The board subsequently voted to remove him from those posts.

The man’s response was to give one month’s notice of his departure on the basis that the firm, a limited liability partnership, had repudiated his membership agreement. He said that the firm’s conduct towards him had rendered his continued membership intolerable. The firm, however, refused to accept that it was in repudiatory breach and informed him that he was expected to return to work. He did not do so and was ultimately expelled from the firm.

He lodged a complaint with an Employment Tribunal (ET) under the Employment Rights Act 1996, claiming that his membership had been constructively terminated and that he had been subjected to detriment as a result of making a protected disclosure. Following a preliminary hearing, the ET struck out that part of his claim that related to the termination of his membership and losses – primarily loss of earnings – that were said to have arisen from that termination.

That ruling was, however, subsequently overturned by the Employment Appeal Tribunal (EAT), enabling him to proceed with his claim in respect of post-termination losses. That was despite the man’s acceptance before the EAT that his claim that his membership of the firm had been terminated by his acceptance of an alleged repudiatory breach had been appropriately struck out.

In dismissing the firm’s challenge to the EAT’s ruling, the Court found that the man could claim compensation for post-termination losses even if he had been lawfully expelled as a member, provided that such losses were attributable to the earlier unlawful detrimental treatment. If all the facts were assumed to be true, in the man’s favour, his claim in respect of post-termination losses should not have been struck out.