Public and Commercial Services Union and Others v Minister for the Cabinet Office
| Jurisdiction | England & Wales |
| Judge | Lord Justice Sales |
| Judgment Date | 18 July 2017 |
| Neutral Citation | [2017] EWHC 1787 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/159/2017 |
| Date | 18 July 2017 |
[2017] EWHC 1787 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
DIVISIONAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Sales
Mrs Justice Whipple
Case No: CO/159/2017
Oliver Segal QC and Ijeoma Omambala (instructed by Thompsons Solicitors) for the Claimants
Clive Sheldon QC and Joseph Barrett (instructed by the Government Legal Department) for the Defendant
Hearing dates: 04 & 05 July 2017
Approved Judgment
Introduction
This is an application for judicial review of the decision of the defendant Minister of 8 November 2016 to make a scheme under section 1 of the Superannuation Act 1972, which amended the Civil Service Compensation Scheme ("the CSCS") to reduce the value of certain benefits paid to civil servants on redundancy or taking early retirement or other forms of exit from the civil service ("the 2016 amendments"). It came before the court on a "rolled up" basis, for consideration of permission with the substantive hearing to follow if permission was granted. The court had read the papers in advance of the hearing and granted permission at the outset. The hearing proceeded as a full substantive judicial review.
The 2016 amendments were made by the Minister and laid before Parliament, as required by the 1972 Act. The process of making amendments to the CSCS is not subject to a positive or negative resolution procedure in Parliament.
The particular reductions in benefits to which the application relates are those in respect of compulsory redundancy (CR), voluntary redundancy (VR), voluntary exit (VE) and what are termed "inefficiency payments." VR payments are made when a government department invites civil servants to apply for voluntary redundancy, and are typically at a higher rate than CR payments. VE payments are made when, even though no redundancy situation exists, a government department invites civil servants to leave their posts in order to reduce staffing costs. Inefficiency payments are made when a government department is seeking to deal with a civil servant who has a poor performance or attendance record, but is not liable to dismissal. The department can invite the civil servant to accept an inefficiency payment as the price for terminating his post.
The first claimant trade union ("the PCSU") is the largest of the civil service trade unions. It currently has around 160,000 members in the civil service and related bodies. We were told that it tends to represent civil servants at the lower end of the salary scale. The second and third claimants are civil servants who are members of the PCSU.
The claimants' grounds of challenge to the 2016 amendments are that: (1) there has been inadequate consultation by the Minister with the PCSU about the 2016 amendments, in contravention of his statutory duty to consult with the PCSU contained in section 1(3) and section 2(3D) of the 1972 Act; (2) the Minister wrongly excluded the PCSU from the process of consultation regarding the 2016 amendments, in breach of its rights and those of its members under Article 11 of the European Convention on Human Rights ("ECHR"); (3) the 2016 amendments violate the rights of civil servants under Article 1 of Protocol 1 to the ECHR (protection of property); and (4) the Minister breached his obligation under section 149 of the Equality Act 2010 (the public sector equality duty) in making the 2016 amendments, in that he did not have due regard to the impact which the change to the inefficiency payments would be likely to have upon civil servants with disabilities. The Minister disputes all these grounds of challenge. He also submits that, even if he is found to have acted unlawfully in some respect, it is highly likely that if he had not done so the outcome would still have been the same or substantially the same: the 2016 amendments would still have been made to make the same changes to the CSCS. Therefore, by virtue of section 31(2A) of the Senior Courts Act 1981, relief should be refused and the 2016 amendments should not be quashed.
The amendments to the CSCS made on 8 November 2016 are part of a further round of reform of public sector pension and exit payments, and follow previous reforms of the CSCS in 2010. A first set of changes was introduced by the then Minister in April 2010. At that time, as I held in R (Public and Commercial Services Union) v Minister for the Civil Service [2010] EWHC 1027 (Admin); [2010] ICR 1198 (" PCSU (No. 1)"), section 2(3) of the 1972 Act as it then stood required the agreement of relevant trade unions to the changes. The PCSU, which was the claimant in that case as well as in this, had not agreed the changes. Accordingly, the April 2010 amendments to the CSCS were quashed by the court. The Minister did not appeal.
Instead, after the General Election in 2010, the government sought and obtained from Parliament primary legislation to cap payments under the CSCS and also amendments to section 2 of the 1972 Act. The unions' right of veto was removed and replaced with an obligation of the Minister to consult on any proposed changes to the CSCS with a view to reaching agreement on them, as is set out in section 2(3D) of the 1972 Act. I address the effect of the amended provisions in the judgment below.
In December 2010, the Minister made amendments to the CSCS under the as yet unamended provisions in sections 1 and 2 of the 1972 Act. The statutory caps on benefits were to come into effect if the amendments to the CSCS were quashed in any new challenge. This background is explained in the judgment of McCombe J (as he then was) in R (Public and Commercial Services Union) v Minister for the Civil Service [2011] EWHC 2014 (Admin); [2011] IRLR 903 (" PCSU (No. 2)").
The PCSU brought a challenge to these changes to the CSCS and the statutory caps on benefits set out in the amended CSCS, principally on the ground that the changes and the caps constituted unlawful interferences with civil servants' rights to peaceful enjoyment of their possessions under Article 1 of Protocol 1 to the ECHR. In PCSU (No. 2), McCombe J dismissed this challenge. He held that, although civil servants had legitimate expectations regarding the payments they would receive under the CSCS as it stood before the amendments in December 2010, which qualified as "possessions" for the purposes of Article 1 of Protocol 1, the changes made by those amendments to reduce the level of payments were objectively justified in light of the public interest identified by the government and Parliament of reducing the public spending deficit.
At the time when the December 2010 changes to the CSCS were introduced and when union members were balloted on whether to accept them, a number of statements were made by or on behalf of the then Minister to the effect that the new CSCS terms would represent "a sustainable and affordable long-term successor scheme." The Minister at that time (Francis Maude MP) said, "I believe we now have a scheme which is fair, protects those who need the most support, addresses the inequities in the current system and is right for the long term". The Head of the Civil Service described the new CSCS terms as "sustainable" and "affordable". As appears below, the claimants place emphasis upon these statements in the context of their present challenge. They say that these statements amounted to assurances that no further changes to the CSCS to the detriment of civil servants would be introduced for a considerable period after 2010 and that the 2016 amendments to the CSCS, which further reduce payments to be made under it, breach those assurances. They also say that the fact that such assurances were made in 2010 undermines the Minister's case on objective justification under Article 1 of Protocol 1 in the context of the present challenge.
Legislative framework
Section 1 of the 1972 Act provides in relevant part as follows:
" 1.—Superannuation schemes as respects civil servants, etc.
(1) The Minister for the Civil Service (in this Act referred to as "the Minister")—
(a) may make, maintain, and administer schemes (whether contributory or not) whereby provision is made with respect to the pensions, allowances or gratuities which, subject to the fulfilment of such requirements and conditions as may be prescribed by the scheme, are to be paid, or may be paid, by the Minister to or in respect of such of the persons to whom this section applies as he may determine; …
(3) Before making any scheme under this section the Minister … shall consult with persons appearing to the Minister … to represent persons likely to be affected by the proposed scheme …."
Section 2 of the 1972 Act provides in relevant part, and as amended, as follows:
" 2.—Further provisions relating to schemes under s. 1.
…
(2) Any scheme under the said section 1 may make provision for the payment by the Minister of pensions, allowances or gratuities by way of compensation to or in respect of persons—
(a) to whom that section applies; and
(b) who suffer loss of office or employment, or loss or diminution of emoluments, in such circumstances, or by reason of the happening of such an event, as may be prescribed by the scheme.
(3) Subject to subsection (3A) below, no scheme under the said section 1 shall make any provision which would have the effect of reducing the amount of any pension, allowance or gratuity, in so far as that amount is directly or indirectly referable to rights which have accrued (whether by virtue of service rendered, contributions paid or any other thing done) before the coming into operation of the scheme, unless the persons consulted in accordance with section 1(3)...
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