R (Public and Commercial Services Union) v Minister for the Civil Service
| Jurisdiction | England & Wales |
| Judgment Date | 18 June 2010 |
| Neutral Citation | [2010] EWHC 1463 (Admin),[2010] EWHC 1027 (Admin) |
| Docket Number | Case No: CO/2777/2010 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 18 June 2010 |
[2010] EWHC 1027 (Admin)
Before: The Honourable Mr Justice Sales
Case No: CO/2777/2010
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Mr Nigel Giffin QC & Mr Nicholas Randall (instructed by Thompsons Solicitors) for the Claimant
Ms Elisabeth Laing QC & Mr Clive Sheldon (instructed by the Treasury Solicitor) for the Defendant
Hearing dates: 22/4/10 – 23/4/10
Mr Justice Sales:
Introduction
This is an application for judicial review of the introduction by the Defendant of amendments to the Civil Service Compensation Scheme. The Minister designated as the Minister for the Civil Service at present is the Prime Minister. I will refer to the scheme as it was in existence prior to the introduction of the amendments as “the CSCS” and to the scheme as now amended as “the amended CSCS”.
The CSCS was made under section 1 of the Superannuation Act 1972 (“the 1972 Act”) in 1994 and has been amended from time to time since then. The amendment provisions to create the amended CSCS were laid before Parliament by the Defendant on 5 February 2010 and purported to take effect with effect from 1 April 2010. The application came on before me as a rolled-up hearing for permission with detailed argument on the merits to follow. Having read into the case in advance of the hearing, I gave permission at the outset of the hearing for judicial review to proceed and heard full argument on the merits.
The purpose of the judicial review claim is to contest the lawfulness of amendments to the CSCS which have now been introduced. These have the effect of reducing in some cases the benefits to be received by civil servants who are made redundant, are compelled to take early retirement or are dismissed on grounds of structural reorganisation or in similar circumstances. The background to the introduction of the changes is the growing cost of pension provision as life expectation increases (since some of the benefits in question involve early payment of pensions), constraints upon the public finances in current circumstances and a desire on the part of the Government to reduce the costs of redundancy through restructuring of government departments and so forth.
The Claimant is a trade union representing large numbers of civil servants. It objects to the introduction of the changes to the CSCS. The Claimant maintains that the amendments to the CSCS deprive its members of what it says are accrued rights in respect of redundancy and other payments which might have to be made to them if certain contingencies occur—e.g. if they are made redundant or are compelled to take early retirement—and that by virtue of section 2(3) of the 1972 Act its consent is required before such changes could validly be brought into effect. It has not consented to the changes.
In the alternative, the Claimant submits that it had a legitimate expectation that its consent would be sought and obtained before the introduction of such changes to the CSCS, which legitimate expectation has been defeated by the Defendant without proper justification.
The CSCS contains many complicated, detailed provisions setting out various payments and pensions which may become payable in certain circumstances to civil servants. It was not necessary for the purposes of this application for me to be taken through the detail of all these benefits. The benefits may vary depending on when individuals became civil servants. Many of them are defined by reference to length of service or by reference to accrued pension entitlements, which in turn depend on the length of service or additional voluntary contributions which have been made by employees. By way of example, it is helpful to set out the following passages from section 2 of the CSCS, which is headed “Compulsory and redundancy category (1972 Section Members)”:
“2.1 A civil servant who is compulsorily retired early on grounds of structure or limited efficiency, or retired early on grounds of redundancy, will receive the benefits as described in rules 2.2 to 2.9. …
Early retirement for civil servants in post on or before 31 March 1997
2.2 This rule applies where a civil servant:
(a) was in post on or before 31 March 1997;
(b) is retired early on or after 6 April 2006 under rule 2.1 above;
(c) is aged 50 or over;
(d) has five or more years' qualifying service;
(e) has not opted out of the 1972 Section; and
(f) has not opted in accordance with rule 2.4 to be treated under section 2A.
The civil servant will be eligible for a pension and lump sum payable under the [Principal Civil Service Pension Scheme] in accordance with rule 3.11 of the 1972 Section, but with reckonable service increased by 6 2/3 years and the benefits being brought into payment immediately. … If the civil servant's pension under rule 3.11 of the 1972 Section would have been higher if rule 1.6b of the 1972 Section were disregarded the civil servant will also be eligible for a lump sum compensation payment under rule 2.3a. …”
In cases covered by rules 2.1 and 2.2, therefore, where compulsory early retirement is imposed on a civil servant who is aged 50 or over, his pension is brought into payment at the level to which his accrued pension entitlement entitles him on the basis of his years of reckonable service, without actuarial adjustment downwards and with the benefit of the notional increase of 6? years of reckonable service. By contrast, where a civil servant elects to take early retirement at age 50 or over, he becomes entitled to early receipt of pension payments but actuarially reduced in amount on the grounds that the pension is being taken earlier than the normal retirement age.
In cases governed by rule 2.2 of the CSCS, both the amount of the pension which becomes payable and the amount of the lump sum payable are determined by reference to provisions in the Principal Civil Service Pension Scheme (“the PCSPS”). The amounts payable depend upon the years of reckonable service performed by the civil servant within the civil service and any additional voluntary contribution payments he has made to augment his entitlements under the PCSPS.
The effect of the changes in the amended CSCS will be to reduce the level of benefits available to some civil servants covered by rule 2.2 and other rules in the CSCS. The changes have been introduced as part of an overall package which produces increased benefits for some classes of worker but fewer benefits for others. The package has been accepted by five of the six trade unions who represent civil servants. However, the Claimant, which represents the largest number of civil servants, objects to the amendments on the grounds that a significant number of its members will be detrimentally affected by them.
The legal background to the Superannuation Act 1972
The position of civil servants at common law is that they are employed by the Crown at will and may be dismissed at any time without notice or other compensation: see Wade and Forsyth, Administrative Law, 9 th ed., pp. 61–65. The harshness of that position has been significantly moderated by legislation, schemes made under legislation and administrative practice. In addition, in the 19 th century pension provision for civil servants was introduced by legislation. The Superannuation Act 1834 (“the 1834 Act”) and later Superannuation Acts included provisions which appeared to set out entitlements or rights of civil servants to receive pension when certain conditions were fulfilled: see, e.g., section 2 of the Superannuation Act 1859 (“the 1859 Act”).
However, it was clearly established by authority that such entitlements did not constitute legal entitlements to payments. An important provision in that regard was section 30 of the 1834 Act, which stated:
“Provided always, and be it further enacted, that nothing in this Act contained shall extend or be construed to extend to give any person an absolute right to compensation for past services, or to any superannuation or retiring allowance under this Act, or to deprive the Commissioners of His Majesty's Treasury, and the heads or principal officers of the respective departments, of their power and authority to dismiss any person from the public service without compensation.”
This provision remained unrepealed in later Superannuation Acts and was consolidated in the Superannuation Act 1965 (“the 1965 Act”) in section 79 of that Act, set out below.
The fullest discussion of the issue of entitlements for civil servants under these legislative provisions is in the judgment of the Court of Appeal in Nixon v Attorney General [1930] 1Ch 566. The case went on appeal to the House of Lords where, in a short decision, the Judicial Committee affirmed the judgments given in the Court of Appeal: see [1931] AC 184, especially at 190–191.
In the Court of Appeal in Nixon it was observed by Romer LJ that the 1834 Act was “one passed for the purpose of authorising the expenditure of public money and defining the circumstances and manner in which it shall be expended and not one passed for the purpose of conferring rights upon any class of public servant” ([1930] 1Ch at 606); he went on to hold that that result was, in any event, achieved by section 30 of the 1834 Act. This meant that use of the word “entitled” meant no more than “entitled to expect” or “qualified to receive” (at pp. 606–607). Romer LJ dismissed the attempt by counsel for the civil servants in that case to draw a distinction...
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