An appeals hearing brought by the government before the Employment Appeal Tribunal in mid-December was dismissed by Sir Alan Wilkie in a judgement handed down yesterday (29 January).
A group of 210 judges had argued changes made to judges’ pensions in 2015 were illegitimate in a tribunal case in November 2016, which they won.
They argued transitional arrangements put in place between the old and new judges’ pension were discriminating against age.
Since women and ethnically diverse people in the judicial system tend to be younger, they also claimed there was indirect discrimination based on gender and race.
The government had argued the transitional protection arrangements were a “proportionate means of achieving their legitimate aim” of protecting those closest to retirement from the financial effects of pension reform and that any differences in treatment were justified and lawful.
But the employment appeal tribunal judge, Sir Alan Wilkie, found the changes made by the government had a legitimate purpose but were not justifiable because there are other ways in which the savings could have been achieved. The changes were not proportionate.
The judgement read: “When the [employment judge] considered the question of proportionate means, he did so on the assumption that the appellants had established legitimate aims.
“His approach to that issue was, in my judgment, correct in law and his decision, based on the largely undisputed evidence, cannot be faulted.
“As a result, his decision that the appellants had failed to show their treatment of the claimants to be a proportionate means of achieving a legitimate aim was correct and, accordingly, this appeal is dismissed.”
Before 1 April 2015 the judges were all members of the Judicial Pension Scheme (JPS), a defined benefit scheme established after the Judicial Pensions and Retirement Act 1993.
This was closed on 31 March 2015 and serving judges were transferred into a replacement scheme, the New Judicial Pension Scheme (NJPS), which is less generous.
Transitional provisions were put in place, which allow older judges to remain members of the JPS, either until retirement or until the end of a period of tapered protection, dependent on their age.
The claimants, some of whom have either already been transferred from the old scheme into the new one or are due to be transferred before February 2022 alleged the system meant they were discriminated against based on their age.
The government argued the way the system was set up was objectively justified.
But the tribunal judge ruled at the time the Lord Chancellor and Ministry of Justice had "failed to show their treatment of the claimants to be a proportionate means of achieving a legitimate aim".
Max Winthrop, partner at Short Richardson & Forth, said the case was complex but could have implications for schemes looking to alter their defined benefit arrangements as well as employers looking to adjust equal pay policies.
He said: “You can justify age discrimination [on certain grounds] but you can never use the principle of justification to argue against race, sex or disability discrimination.
“You can see there is a legitimate aim in trying to get pensions in a state that is economically sustainable but the way the government went about it was not proportionate.”
He added: “When you look at equalising pension provision you have got to be very careful, there has to be a degree of caution.
“When asking all workers of a particular age to switch from DB to money purchase while leaving some in [you] can’t just assume because it impacts only a few people you can [do so] without thinking it through.”
Mr Winthrop believes the government will take the case to the Court of Appeal with potential further action at the Supreme Court if this fails.
Separately, a similar case was brought by a group of firefighters, which could be affected by the outcome of this judgement.
The MoJ said it was considering whether to make an appeal at the Court of Appeal.
A spokesperson said: “We recognise and value the important role of the judiciary. We are considering the court's findings and whether to pursue an appeal against this judgment.”
carmen.reichman@ft.com
