Ministry of Justice (formerly Department for Constitutional Affairs) v O'Brien (Council of Immigration Judges intervening)

Heard on 21 and 22 November 2012

Lord Hope and Lady Hale (delivering the judgment of the court)

The appellant Dermot Patrick O'Brien ("Mr O'Brien") is a retired barrister. He also held part-time judicial office as a recorder appointed under section 21 of the Courts Act 1971, as amended. He claims to be entitled to a pension in respect of his part-time non-salaried judicial work. The case raises questions of domestic law about the status and terms of service of part-time non-salaried judges in England and Wales. They include chairmen and members of tribunals and others exercising judicial functions for remuneration. It also raises important questions of EU law as to which, having sought a preliminary ruling under article 267 of the Treaty for the Functioning of the European Union ("the TFEU"), the court has now received guidance from the Court of Justice of the European Union ("the CJEU"). The effect of section 3(1) of the European Communities Act 1972 is that the questions of EU law must be determined in accordance with the principles laid down in its preliminary ruling by that court.

The EU law questions relate to Council Directive 97/81/EC of 15 December 1997 [1997] OLJ 14/9 ("the PTWD") concerning the Framework Agreement on part-time work which was concluded on 6 June 1997 between the general cross-industry organisations (UNICE, CEEP and ETUC) and is annexed to the Directive ("the Framework Agreement"). Directives are binding as to the result to be achieved, leaving only the choice of form and methods to the Member State: article 288 TFEU. The PTWD was extended to the United Kingdom by Directive 98/23 [1998] OJL 131/10. It was transposed into domestic law by the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000, SI 2000/1551 ("the 2000 Regulations"), which were made under section 19 of the Employment Relations Act 1999. They came into force on 1 July 2000.

With the encouragement of the leader of the Western Circuit, Mr O'Brien, who was then in practice as a barrister, decided to apply to become a recorder. He was appointed as a recorder with effect from 1 March 1978, and he continued sitting as a recorder with regular extensions until he ceased to hold that office on 31 March 2005. The question then arose as to whether, as he was no longer the holder of a judicial office, he was entitled to a pension under the judicial pension scheme. The office of recorder is not one of the judicial offices for which provision for the payment of pensions was made in the Judicial Pensions Act 1981.

Further provisions for the payment of pensions to judicial office holders are contained in the Judicial Pensions and Retirement Act 1993 ("the 1993 Act"). Section 2 of the 1993 Act provides that any person retiring from "qualifying judicial office" having attained the age of 65 and having completed at least 5 years' service in qualifying judicial office is entitled to receive a pension at the appropriate annual rate. Section 1(6) provides that, for the purposes of the Act, any reference to a qualifying office is a reference to any office specified in Schedule 1 to the Act if that office is held on a salaried basis. The office of recorder is not one of the offices specified in Schedule 1.

On 9 June 2005 Mr O'Brien wrote to the Department of Constitutional Affairs requiring that he be paid a retirement pension on the same basis, adjusted pro rata temporis, as that paid to former full-time judges who had been engaged on the same or similar work. He was informed by the Department in its reply dated 5 July 2005 that he fell outside the categories of judicial office holder to whom a judicial pension was payable. This was because the office of recorder was not a qualifying judicial office under the 1993 Act, and because there was no obligation to provide him with a pension under European law as he was an office-holder, not a worker.

Mr O'Brien was not satisfied with the reasons he was given. On 29 September 2005 he started proceedings in the Employment Tribunal in which he claimed among other things that he was being discriminated against because he was a part-time worker. His claim was brought under the Equal Pay Act 1970, the Sex Discrimination Act 1975 and the Human Rights Act 1998 together with the PTWD and the 2000 Regulations. The claim was opposed by the Department of Constitutional Affairs (now the Ministry of Justice) unsuccessfully in the Employment Tribunal, but successfully on appeal to the Employment Appeal Tribunal, on the grounds that it was out of time, as it ought to have been presented within three months of the date when he ceased to hold office, and that there was no relevant statutory extension of the time within which a claim could be presented. But it was later ordered, by consent, that the substantive issue and the time limit issue should both be heard by the Court of Appeal as a test case.

On 19 December 2008 the Court of Appeal (the Chancellor, Smith and Maurice Kay LJJ) allowed Mr O'Brien's appeal on the time limit issue, but directed the Employment Tribunal to dismiss the claim on the issue of substance: Department of Constitutional Affairs v O'Brien [2008] EWCA Civ 1448, [2009] ICR 593, [2009] 2 CMLR 15. Its findings on the substantive issue were that judges are not "workers", either under the main definition in regulation 1(2) of the 2000 Regulations which requires there to be a contract or under the extended definition of "worker" in regulation 12 which applies to "Crown employment": see paras 15 and 17, below. Mr O'Brien was given permission to appeal to the Supreme Court.

On 28 July 2010 this court, having considered the parties' written and oral submissions and submissions for the Council of Immigration Judges as interveners, referred two questions to the CJEU for a preliminary ruling under Article 267 TFEU: see [2010] UKSC 34, [2011] 1 CMLR 36, to which reference may be made for much of the background. The questions that were referred were as follows:

"1) Is it for national law to determine whether or not judges as a whole are 'workers who have an employment contract or employment relationship' within the meaning of clause 2.1 of the Framework Agreement, or is there a Community norm by which this matter must be determined?

2) If judges as a whole are workers who have an employment contract or employment relationship within the meaning of clause 2.1 of the Framework Agreement, is it permissible for national law to discriminate (a) between full-time and part-time judges, or (b) between different kinds of part-time judges in the provision of pensions?"

On 1 March 2012 the Second Chamber of the CJEU, having received the opinion of the Advocate General (Kokott) on 17 November 2011, gave judgment. It answered the questions as follows [2012] ICR 955, para 68:

"1) European Union law must be interpreted as meaning that it is for the member states to define the concept of 'workers who have an employment contract or an employment relationship' in clause 2.1 of the Framework Agreement … and in particular, to determine whether judges fall within that concept, subject to the condition that that does not lead to the arbitrary exclusion of that category of persons from the protection offered by Directive 97/81, as amended by Directive 98/23, and that agreement. An exclusion from that protection may be allowed only if the relationship between judges and the Ministry of Justice is, by its nature, substantially different from that between employers and their employees falling, according to national law, under the category of workers.

2) The Framework Agreement … must be interpreted as meaning that it precludes, for the purpose of access to the retirement pension scheme, national law from establishing a distinction between full-time judges and part-time judges remunerated on a daily fee-paid basis, unless such a difference in treatment is justified by objective reasons, which is a matter for the referring court to determine."

The effect of the questions that were referred, and of the ruling in response to them, is to divide the issues raised by Mr O'Brien's case into two parts. Firstly, there is the worker issue: whether the relationship between judges and the Ministry of Justice is substantially different from that between employers and persons who fall to be treated in national law as workers. The principles to which the CJEU refers are of general application. So although the argument was directed to the position of recorders like Mr O'Brien, the issue is of interest to all part-time judges, not just recorders. Secondly, there is the objective justification issue: whether the difference in treatment of part-time judges is justified by objective reasons. The answer to this...