A dispute over whether a university employee was entitled to her full pension has been sent back to the Pensions Ombudsman after the High Court disagreed with the ombudsman's decision.
In a judgment published on September 13 deputy High Court judge Adam Johnson, found the ombudsman had taken too narrow an interpretation of the issue of redundancy in its original decision and should therefore reconsider the case.
Gail Downe had appealed a determination from the Pension Ombudsman, published in July 2018, as she believed the ombudsman’s conclusion that she was not entitled to the full pension payments was “wrong”.
The court heard how Ms Downe is a member of the Universities Superannuation Scheme and until November 2012 was employed by the Society of College, National and University Libraries.
However, her employment was terminated in November 2012 on terms that were recorded in a compromise agreement.
Her appeal centred on whether the termination of her employment was “by reason of redundancy” as under the USS scheme rules this would entitle her to a full pension from the date on which her employment terminated.
But the Pension Ombudsman concluded the rule was not satisfied and therefore Ms Downe was not entitled to a full pension.
The High Court judgment explained how Ms Downe had a poor working relationship with her manager and eventually the team she was part of was restructured.
Due to this, Ms Downe’s lawyer had contacted HR on her behalf to discuss possible severance terms.
Severance terms were negotiated and a compromise agreement was entered into on November 30, 2012 in which the employer agreed to make a payment to Ms Downe “without admission of liability”, part of which was non-taxable and was described as “enhanced redundancy pay”.
In January 2013, Ms Downe attempted to apply for a full pension under the USS scheme rules and asked her former employer to confirm that the reason for the compromise agreement was redundancy.
But an HR representative at Society of College, National and University Libraries told her lawyer: “I am sorry but I cannot confirm that the reason for [Ms Downe’s] compromise agreement was redundancy. She was not made redundant.
“You set out a suggested framework for a package which included a sum that you called a redundancy payment and we were happy to progress our discussion with you using that sort of short hand for payments but that does not mean that [Ms Downe] was redundant.”
Ms Downe’s argument to the ombudsman was that the word redundancy had been used in the severance negotiations and was also referred to in other documents such as the compromise agreement.
But her employer’s position was that the employment had been terminated by mutual consent.
The ombudsman sided with the employer stating that the rules on the pension scheme had not been satisfied as she had willingly contacted the employer to set up a compromise agreement.
Ms Downe was allowed to bring her appeal against the Pension Ombudsman’s decision on the grounds that the ombudsman took too narrow an interpretation of redundancy for the purpose of the rules and that the wording of the compromise agreement should have led the ombudsman to conclude that the employment was terminated by redundancy.
She argued to the High Court that the reorganisation by her employer had all the features of a redundancy so the ombudsman was wrong to conclude that no formal redundancy process had started.
But her employer argued the compromise agreement gave no reason for the termination of employment.
Judge Johnson partly upheld the appeal but said the High Court was not able to address the matter and proposed that Ms Downe’s complaint should be remitted to the ombudsman to address the issues raised.
He said: “My conclusion is that the ombudsman’s analysis had a misplaced emphasis on the question whether the termination of Ms Downe’s employment arose at the instance of Society of College, National and University Libraries, and that in consequence the ombudsman did not properly or sufficiently address the test for redundancy in USS rule 1.1.
“For all the reasons given above, I would allow Ms Downe’s appeal to the extent I have identified, and remit her complaint to the ombudsman.”
amy.austin@ft.com
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