The Supreme Court has handed down a judgment in Miller and others v Ministry of Justice  UKSC 60 (Miller) - the latest decision to focus on pension rights for part-time judges.
The question for the Supreme Court in Miller was when does time start to run for claims brought by part-time judges in relation to rights to a pension under the Part-time Workers' Directive (Directive 97/81) (the PTW Directive) as applied in the UK by the Part-time Workers' (Prevention of Less Favourable Treatment) Regulations 2000 (SI 2000/1551) (the PTW Regulations)?
Key action points for trustees / employers
1. The judges were in time if they brought a claim within three months of the point of retirement
The Supreme Court allowed the judges' appeal, ruling that a part-time judge may properly complain both during his period of service (i.e. that their terms of office were discriminatory compared to full time judges in not including provision for a future pension) and/or at the point of retirement (i.e. that there has been a failure at this point to make a pension available and this amounts to less favourable treatment).
2. The judges did not have to bring a claim during or immediately after their period of service
The judges brought their claims on the grounds that their terms of office were discriminatory compared to full time judges in not including provision for a future pension. The court held that their ability to bring a claim during or immediately after their periods of service did not exclude their right to bring a claim at the point of retirement. The former does not exclude the latter.
3. The impact of the judgment will be significant for the Ministry of Justice
The impact of the Supreme Court's judgment on the Ministry of Justice will be significant, with an estimated 1,000 judges having brought claims or relying on the moratorium.
4. The judgment could have a broader impact on UK pension schemes
The judgment in Miller focused on part-time, fee-paid judges and their rights under various judicial pension schemes. The logic of the judgment could, however, have important consequences for other part-time worker claims and for pension discrimination claims more widely. Whether or not such claims are ultimately successful, trustees and employers should be aware that these arguments could be run by claimants and their advisers when they are otherwise out of time to bring a claim. So the point of retirement could be the date from which the time limit for bringing a pensions discrimination claim runs, not just the end of the period of service during which it applied.
What was the background to the case?
The Supreme Court's decision in Miller may be the final act in long running litigation centred on pension entitlement for part-time, fee paid judges. Three sets of decisions focused on different aspects of the claims.
Question 1 - were part-time, fee paid judges entitled to a pension?
Mr O'Brien began proceedings before the Employment Tribunal in September 2005. The case went through the Employment Appeals Tribunal and the Court of Appeal to the Supreme Court. The Supreme Court referred questions to the European Court of Justice (ECJ). Following the ECJ's ruling, the Supreme Court held (in O'Brien v Ministry of Justice  UKSC 6) that:
- Mr O'Brien had to be regarded as a part-time worker within the meaning of Clause 2(1) of the Framework Agreement annexed to the PTW Directive; and
- no objective justification had been shown for departing from the principle of remunerating part-time judges on the same basis as full-time judges.
The Supreme Court therefore found that Mr O'Brien was entitled to a retirement pension on terms equivalent to a circuit judge. It then remitted the case to the Employment Tribunal for determination of the amount of retirement pension to which Mr O'Brien was entitled.
Question 2 - what pension benefits are part-time, fee paid judges entitled to?
After being remitted to the Employment Tribunal, the case followed the same path of being appealed all the way to the Supreme Court. Once again, the Supreme Court referred a question to the ECJ. This question was whether the judges were entitled to pension benefits:
- for their entire period of part-time service, regardless of whether this service was before the date that the PTW Directive was required to be transposed into domestic law (i.e. before 7 April 2000); or
- on and from the date that the PTW Directive was required to be transposed into domestic law (i.e. on and from 7 April 2000).
In O'Brien v Ministry of Justice  C 432/17 (O'Brien), the ECJ held that periods of service prior to the deadline for transposing that directive must be taken into account for the purpose of calculating the retirement pension entitlement. As a result, pension benefits should be calculated based on the entire period of service regardless of whether the service was before the deadline for the PTW Directive to be transposed (i.e. 7 April 2000).
Question 3 - Were the judges' claims brought out of time?
The final question for the courts to decide was on whether the judges' claims to the Employment Tribunal were brought out of time for the purposes of the PTW Regulations. This is the subject of the judgment handed down by the Supreme Court in Miller.
When does the clock start running for part-time judges' tribunal claims?
This question focused on whether the judges had brought their claims in time. The claims were all presented more than three months after the end of the part-time appointments to which the claims related. The claims were, however, presented within three months of the judges' retirement dates.
There were two arguments for the Supreme Court to consider:
- the Ministry of Justice argued that pension rights are definitely acquired at the time of service and therefore any less favourable treatment takes place during that period of service. A claim should therefore be brought within three months of the end of the last period of part-time service; or
- the judges argued that unequal treatment occurs at the time the pension falls to be paid. As a result, a claim may be brought within three months of the point of retirement (i.e. when there has been a failure at that point to make a pension available).
What did the Supreme Court rule?
The Supreme Court allowed the judges' appeal. The judgment makes clear that a part-time judge may properly bring a claim both:
- during their period of service (i.e. that their terms of office were discriminatory compared to full time judges in not including provision for a future pension); and
- at the point of retirement (i.e. that there has been a failure at this point to make a pension available and this amounts to less favourable treatment).
The Supreme Court went on to clarify that the former (i.e. the ability to bring a claim during or immediately after their period of service) does not exclude the latter (i.e. the right to bring a claim at the point of retirement).
What does this mean for trustees and employers?
The ECJ's decision in O'Brien and the Supreme Court's judgment in Miller clarifies the position for part-time, fee-paid judges in respect of their entitlement to pension benefits. Under O'Brien, they are entitled to pro-rated pension benefits equivalent to full-time comparators for the entire period of their appointments. Under Miller, they have a right to bring claims up to three months after their retirement date.
Will Miller impact on private sector defined benefit schemes and other public sector schemes?
The impact of the Supreme Court's judgment will be significant for the Ministry of Justice, with an estimated 1,000 judges having brought claims or relying on the moratorium. Will the judgment have any wider impact?
The Supreme Court unanimously found that the point of unequal treatment occurs at the time the pension falls to be paid. As a result, the time limit for bringing claims is three months from this date, rather than three months from the end of the period of service to which the unequal treatment relates.
Whilst Miller focused on part-time, fee-paid judges, the logic could equally apply to any part-time worker or, to apply an even broader brush, any worker who suffers discrimination in respect of their right to pension benefits. Whilst it is not clear at this stage whether Miller can be applied so widely, it is likely that claimants and their advisers will run this argument if they are otherwise out of time to bring a claim.
Finally, it should be noted that in respect of any discrimination claims brought under the Equality Act 2010, the government has consulted on whether or not to extend the current time limit of 3 months, to 6 months. If implemented, this could give claimants with certain pension discrimination claims 6 months from the point of retirement to bring a claim.
Read the original article on GowlingWLG.com
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.