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Judicial pension scheme changes discriminated against younger judges, tribunal rules

Out-Law News | 19 Jan 2017 | 2:09 pm | 2 min. read

Changes to the judicial pension scheme (JPS) in 2015 discriminated against younger judges, an employment tribunal in London has ruled.

As well as being directly discriminatory on age grounds, the changes were also indirectly discriminatory as the affected group also included a disproportionate number of female judges and judges from Black, Asian and minority ethnic (BAME) backgrounds, the tribunal ruled.

The government is likely to appeal to the employment appeal tribunal (EAT).

Older judges were permitted to remain members of the JPS until they retired or for a transitional 10-year period when the scheme closed on 31 March 2015; while younger judges were compulsorily transferred to the less generous new judicial pension scheme (NJPS). The government had argued that the difference in treatment could be justified on public policy grounds, and in order to protect those close to their retirement age.

However, the employment judge said that it was hard to find a "rational explanation" for the policy, as it "set out consciously to treat more favourably a group who, as was well known at the time, were the least adversely affected by the reforms".

"In my judgment, an aim which amounts to an intention to treat one group more favourably and another less favourably, solely by reference to the age of those in the groups cannot, without further rational explanation of the reason for it, be legitimate," the judge said. "An aim thus expressed amounts to a declaration of intent to do precisely that which [the Equality Act] prohibits."

"[The government has] failed to adduce any evidence of disadvantage suffered by the fully protected and the taper-protected groups of judges which called for redress, or any social policy objective which was served by treating those groups more favourably and [the younger judges] less favourably," the judge said.

Consistently implementing reform across all the different public sector pensions, as also argued by the government, was capable of being a legitimate aim, the judge ruled. However, the government again did not explain why there was a need to pursue the aim of consistency "in this one respect as between the judicial and other public service pension schemes", the judge said.

The judge also noted that the £23 million that was spent by the government on the transitional provisions could have paid for an additional one and a half years of membership of the JPS for all serving judges.

The ruling may have implications for similar public sector pension disputes which are currently before the courts, including one brought by the Fire Brigades' Union. However, pension disputes expert Hayley Goldstone of Pinsent Masons, the law firm behind Out-Law.com, said that the result would not necessarily be the same, particularly on the indirect discrimination point.

"Whether there is indirect discrimination will depend on the profile of the scheme's members, so a benefit structure which is non-discriminatory in one scheme may be discriminatory in another," she said.

"Given that there is no blanket answer as to whether a change is indirectly discriminatory or not, we are likely to see more challenges on the basis of indirect discrimination," she said.

"Like most discrimination challenges, the long-term implication may be that everyone ends up worse off as a result," said pensions expert Stephen Scholefield, also of Pinsent Masons.

"Following the judgment, employers may be less likely to include transitional arrangements when changing schemes to protect those closer to retirement. The overall result may therefore be that employers move all employees to a lower level of benefits," he said.