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.

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