Will part-timers’ pensions be backdated?

The Supreme Court has referred the O’Brien case[1] to the Court of Justice of the European Union (CJEU) for clarification. The court heard Mr O’Brien’s appeal at the same time as Walker v Innospec[2]. Both the Walker and O’Brien cases consider the principles of “no retroactivity” and “future effects”.

What needs to be clarified?

The issue in O’Brien is determining the period of service that should be included when calculating the pension for a part-time fee-paid judge.

Background

An EU Directive[3] implementing the Framework Agreement in relation to part-time work was passed with an aim to remove the discrimination against part-time workers. The UK gave effect to the directive by passing regulations[4] which came into force on 1 July 2000. The deadline for transposing the regulations into national law was 7 April 2000. The regulations allow part-time workers to challenge less favourable treatment on the grounds of their part-time status if the treatment cannot be objectively justified.

Facts

Mr O’Brien was a part-time fee-paid judge from March 1978 to March 2005. Part-time judges are paid pro-rata and are entitled to the same benefits as full-time judges with the exception of pension entitlement under the Judicial Pensions Scheme. Mr O’Brien began proceedings in the Employment Tribunal on the basis that his exclusion from the pension scheme was discriminatory.

The Supreme Court previously held that Mr O’Brien was entitled to a pension on terms equivalent to that of a full-time judge. The case was then remitted to the Employment Tribunal to determine the amount of pension that Mr O’Brien is entitled to. The Employment Tribunal held that the calculation should take Mr O’Brien’s entire period of service into account. However, this was overturned on appeal with the Employment Appeal Tribunal holding that Mr O’Brien was only entitled to pension in respect of service from 7 April 2000. This decision was upheld by Court of Appeal. Mr O’Brien appealed to the Supreme Court.

Why has the Supreme Court referred the case to the CJEU?

Although judgement was handed down in Walker (which related to the restriction of pensions for same sex spouses and civil partners to service from 5 December 2005), the decision to refer O’Brien to the Supreme Court arises from a difference of opinion among the Supreme Court judges as to the interpretation of a line of authority from previous European cases. In the Ten Oever[5] case, the CJEU decided that the obligation to equalise benefits for men and women only applied to benefits deriving from service after 17 May 1990 (the date of its decision in the Barber[6] case). The issue was whether the right to pension for part-timers had to be equal at the time it was earned (as suggested by Ten Oever in which it was held that pension was deferred pay earned at the time of the service to which it related) or when it came into payment. If the latter, then Mr O’Brien would be entitled to a pension based upon his whole period of service. As the correct approach was not clear to the court, it was necessary to refer the case to the CJEU.

Impact for other schemes

The impact of the O’Brien case might be the limited for private sector occupational pension schemes. In O’Brien the scheme in question was the non-contributory Judicial Pensions Scheme under which benefits are calculated by reference to years of service rather than pensionable service since joining the scheme. There is a body of separate case law[7] relating to the access to pension schemes for part-time workers and their ability to claim backdated membership for years in which they were denied entry.