UNISON v The First Secretary of State
| Jurisdiction | England & Wales |
| Judge | Andrew Nicol QC |
| Judgment Date | 27 September 2006 |
| Neutral Citation | [2006] EWHC 2373 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/1944/2006 |
| Date | 27 September 2006 |
[2006] EWHC 2373 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Andrew Nicol QC, sitting as a Deputy Judge of the High Court
Case No: CO/1944/2006
James Goudie QC and Ijeoma Omambala (instructed by Helen Phillips, Legal Officer, UNISON) for the Claimant
James Eadie (instructed by Treasury Solicitor) for the Defendant
Andrew Nicol QC:
Introduction
In this application for judicial review the union, UNISON, seeks to quash certain changes to the Local Government Pension Scheme ('LGPS') which are to be made by the Local Government Pension Scheme (Amendment) Regulations 2006 SI 2006 No. 966 ('the Amending Regulations') and which are due to come into force on 1 st October 2006. In very brief summary, UNISON argues that the change was put forward by the government as necessary in order to comply with a directive of the European Union, Council Directive 2000/78/EC establishing a general framework for equal treatment in employment. In particular, the Directive requires Member States to take measures in relation to discrimination on grounds of age. UNISON argues that the defendant misconstrued the Directive and its application. Properly understood, the union says, the Directive did not apply to the feature of the LGPS which is in issue, either because that feature did not constitute discrimination on grounds of age, or because it was excluded from the scope of the Directive, or, in the third alternative, because any age discrimination in this feature of the LGPS was justifiable and the directive permits age discrimination which is justified. Unison also contends that the projections used by the government as to the costs and benefits of the change were seriously flawed.
The LGPS is established under the Superannuation Act 1972 and is governed by regulations issued under s.7 of that Act by the Secretary of State. The current regulations are the Local Government Pension Scheme Regulations 1997 SI 1997 No 1612 as amended. The particular feature of the scheme in issue in these proceedings is known as the '85 year rule' and is to be found in reg.31 of the 1997 Regulations. This says:
'(1) If a member leaves a local government employment (or is treated for these regulations as if he had done so) before he is entitled to the immediate payment of retirement benefits (apart from this regulation), once he is aged 50 or more he may elect to receive payment of them immediately.
(2) An election made by a member aged less than 60 is ineffective without the consent of his employing authority (but see paragraph (6)).
(3) If the member elects, he is entitled to a pension and retirement grant payable immediately.
(4) If the sum –
(a) of the member's age in whole years on the date his local government employment ends or the date he elects, if later,
(b) of his total membership in whole years, and
(c) in a case where he elects after his local government employment ends, of the period beginning with the end of that employment and ending with the date he elects,
is less than 85 years, his retirement pension and grant must be reduced by the amounts shown as appropriate in guidance issued by the Government Actuary (but see paragraphs (5) and (6) and regulation 36(5) (GMPs)).
(5) A member's appropriate employing authority may determine on compassionate grounds that his retirement pension and grant should not be reduced under paragraph (4).
(6) If a member who has left a local government employment before he is entitled to the immediate payment of retirement benefits (apart from this regulation) becomes permanently incapable of discharging efficiently the duties of that employment because of ill-health or infirmity of mind or body –
(a) he may elect to receive payment of the retirement benefits immediately, and
(b) paragraphs (2) and (4) do not apply.
(7) If a member does not elect for immediate payment under this regulation, he is entitled to receive a pension and grant without reduction, payable from his NRD [I interpose that this stands for 'Normal Retirement Date' which is prescribed as 65 for both men and women] or from such earlier date on or after his 60 th birthday as the member elects on which the sum of the items referred to in sub-paragraphs (a) to (c) of paragraph (4) is 85 years or more.
(8) An election under paragraph (1) must be made by notice in writing to the member's scheme employer.'
In summary, then, a member of the LGPS is entitled to receive a pension at 65. Between 60 and 65 the member is also entitled to elect to receive a pension but this will be reduced to reflect the fact that it is being taken earlier than 65 unless the member fulfils the 85 year rule i..e. that in his or her case the sum of (a) age when employment ends, (b) total years in the scheme and (c) the period between the end of employment and date of election is 85 years or more. Between 50 and 60 the member may elect to receive a pension, but only with his or her employer's consent. In that case there will also be a reduction in benefits to reflect the fact that the pension is being taken earlier than 65 unless the 85 year rule is satisfied.
The position of local government employees is different from those in other parts of the public service where the normal retirement date has in the past been 60, although the government has proposed measures to increase it to 65. This case is only concerned with the LGPS.
Regulations to abolish the 85 year rule were made in 2004 (see Local Government Pension Scheme (Amendment) (No.2) Regulations 2004 SI 2004 No. 3372) but before this change was due to come into force on 1 st April 2005, the amending regulations were themselves negated (see Local Government Pension Scheme (Amendment) Regulations 2005 SI 2005 No. 1903). Consequently, the 85 year rule survived.
Before turning to the 2006 Regulations and their genesis, it is convenient to say a little more about the Directive. This was adopted on 27 th November 2000. It covers many different types of discrimination (religion, belief, disability, age and sexual orientation), but the only aspect which concerns the present proceedings is discrimination on grounds of age. In this regard, Member States have until 2 nd December 2006 at the latest to take measures to implement the Directive (see Article 18).
The preamble to the Directive includes the following:
'(14) This Directive shall be without prejudice to national provisions laying down retirement ages
….
(25) The prohibition of age discrimination is an essential part of meeting the aims set out in the Employment Guidelines and encouraging diversity in the workforce. However, differences in treatment in connection with age may be justified under certain circumstances and therefore require specific provisions which may vary in accordance with the situation in Member States. It is therefore essential to distinguish between differences in treatment which are justified, in particular by legitimate employment policy, labour market and vocational training objectives, and discrimination which must be prohibited.'
The purpose of the Directive, as set out in Article 1, is to lay down a general framework for combating discrimination inter alia on grounds of age. Article 2(1) explains that the principle of equal treatment means that there shall be no direct or indirect discrimination on one of the specified grounds. Direct discrimination is defined in Article 2(1)(a) as
'where one person is treated less favourably than another is, has been, or would be treated in a comparable situation, on any of the grounds referred to in Article 1.'
Where an apparently neutral provision has the effect of putting persons at a disadvantage by reference to any of the grounds covered by the Directive this will amount to indirect discrimination unless the provision in question is justified (see Article 2(2)(b)(i)), but indirect discrimination is not at issue in these proceedings. The Directive applies to all persons as regards both private and public sectors in relation to (amongst other things) 'employment and working conditions, including dismissals and pay' (see Article 3(1)(c))
While Article 2 includes no general defence of justification to direct discrimination, special provision is made for discrimination on grounds of age. Article 6 provides:
'(1) Notwithstanding Article 2(2), Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary.
Such differences of treatment may include, among others:
(a) the setting of special conditions on access to employment and vocational training, employment and occupation, including dismissal and remuneration conditions, for young people, older workers and persons with caring responsibilities in order to promote their vocational integration or ensure their protection;
(b) the fixing of minimum conditions of age, professional experience or seniority in service for access to employment or to certain advantages linked to employment;
(c) the fixing of a maximum age for recruitment which is based on the training requirements for the post in question or the need for a reasonable period of employment before retirement.
(2) Notwithstanding Article 2(2), Member States may provide that the fixing for occupational social...
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