Many UK universities now operate “safe space” and “no platforming” policies to protect students from views which are perceived as being likely to come into conflict with their views or opinions.
Similarly, in the High Court judgment in the case of IBM United Kingdom Holdings Ltd vs Dalgleish, Mr Justice Warren concluded that, unless there was no other possible or reasonably possible course open to them, it was unlawful for IBM to propose a pension scheme closure exercise that came into conflict with the scheme members’ reasonable expectations.
The Court of Appeal reversed the High Court decision on the grounds that, provided the decision of IBM to make the proposal met the test of rationality, in the sense that it was not irrational, capricious or perverse, and involved a proper exercise of its pension scheme powers, it constituted a lawful exercise of the employer’s powers.
Mr Justice Warren had been applying the Imperial good faith test to IBM’s conduct when IBM proposed a defined benefit pension scheme closure hot on the heels of some earlier quite extensive benefit reductions. Those earlier reductions had raised reasonable expectations amongst scheme members that, for a time at least, no further changes would be made.
The Imperial duty of good faith implies a restriction on the scope of the exercise by pension scheme sponsors of their scheme powers. They must not exercise the powers in such a manner that would destroy or seriously damage the relationship of trust and confidence between an employer and its employee.
The Court of Appeal concluded that Mr Justice Warren took the test a step too far, by holding that it prevented an employer making proposals that conflicted with scheme members’ expectations where other alternatives were available or might reasonably be available to the employer. The Court of Appeal decided that Mr Justice Warren had concentrated on the outcome of IBM’s decision and in doing so had fallen into the trap of substituting the Court’s decision for that of the primary decision maker – in this case IBM as the pension scheme sponsor. The Court of Appeal did not accept that IBM defined benefit scheme members’ reasonable expectations were of paramount significance. The members’ expectations were a relevant factor in IBM’s decision making but they should not be elevated above other relevant factors, such as to accord an overriding significance to those expectations.
Critics of safe space and no platforming policies in UK universities argue that the policies elevate the student views they seek to protect to an overriding significance, over and above other factors, like the intellectual stimulation of exposure to conflicting ideas and the analytical vigour to be derived from open and healthy debate. Similarly, the lower court was regarded as attributing too high a value to the expectation of IBM defined benefit scheme members, that the scheme would be left alone for a time after a number of benefit reductions. The case is a source of comfort to employers who have risked upsetting genuine and long held member perceptions as to the inviolability of ongoing defined benefit pension accrual, in the face of staggering increased costs of funding scheme deficits. Indeed the appeal court noted that the global strand of IBM’s justification for the closure exercise was the need for cost savings combined with a more localised UK business desire to improve efficiency, productivity and economic performance. And there are no safe spaces from that.
This blog post was written by Patrick Kennedy. For further information, please contact:
Patrick Kennedy, partner, Pensions
T: 0161 836 7788