Part Time v Full Time – is my pension affected?

In a recent case[1], the Supreme Court requested the European Court of Justice (ECJ) to determine whether periods of part time service accrued before the Part Time Workers Directive[2] (the Directive) came into effect should be taken into account when calculating pensions for part time judges.

The route to Europe, and back again

Mr O’Brien worked part time, paid on a ‘per day’ basis, as a judge from March 1978 until March 2005, when he retired aged 65. On retirement, Mr O’Brien was told that, due to working part time, he fell outside the categories of ‘judicial office holder’ to whom a judicial retirement pension was payable. Mr O’Brien began proceedings, initially in the Employment Tribunal, arguing he was entitled to the same pension (adjusted pro-rata) as his full time colleagues under the Directive.

Whilst Mr O’Brien’s claim was upheld at first instance, he lost on appeal at the Employment Appeal Tribunal. On further appeal, the Supreme Court asked the ECJ for a preliminary ruling. The ECJ held that a distinction could not be drawn between full time and part time judges remunerated on a daily basis, unless there was an objective justification for such a difference in treatment.

Following the ruling form the ECJ, the Supreme Court determined that there was no objective justification for departing from the principal of remunerating part time judges on the same basis as full-time judges, subject to a pro-rata adjustment. As such, Mr O’Brien was entitled to a judicial pension and the case was remitted back to the Employment Tribunal for determination as to the amount of pension Mr O’Brien was entitled to.

The Employment Tribunal held that Mr O’Brien’s pension should be calculated based on the full amount of his service, i.e. from March 1978. However, the Employment Appeal Tribunal disagreed and determined that his pension should only be calculated based on his service from 7 April 2000 – the date the Directive came into force in the UK. On further appeal the Supreme Court asked the ECJ to confirm how the pension should be calculated.

On the case’s second visit to the ECJ, it was held that the Directive must be interpreted as meaning the entire period of a part time judge’s service should be used to calculate their pension entitlement under the Judicial Pension Scheme.

What does this mean for pension schemes?

For Mr O’Brien this brings about the end to a 13 year legal battle but it could open the door for many similar applications.

The judgment raises a question over the financial impact of the ECJ’s judgment to pension schemes, especially the Judicial Pension Scheme which is currently underfunded. Some reports state that it could result in an extra £750 million liability for the scheme.

The case has wider significance beyond the issue of discrimination against part time workers. It is relevant for individuals who, for discriminatory reasons, did not accrue rights prior to the coming into effect of a European directive and who now seek to exercise rights obtained under that directive.

[1] O’Brien v Ministry of Justice (C-432/17)

[2] (97/81/EC)