Hutchings v Islington London Borough Council

A statutory pension entitlement may be enforced by ordinary civil action where the claimant has a private law right and no statute or statutory rule positively excludes the court’s jurisdiction. A claim is founded on contract for the purposes of section 15(1) of the County Courts Act 1984 where its success requires proof of the employment contract, even if the pension right is also statutory.

The appeal procedure in the Local Government Superannuation Regulations 1986 did not make a reference to the Secretary of State a precondition to a court determination of the contractual issue of pensionable remuneration. A payment in lieu of notice covered salary, not a housing-related rent reduction that ended with the employment. Holiday pay for 30 days was calculated at 1/365th of annual salary.

The appellant, a former resident caretaker employed by the respondent local authority, retired early on redundancy. He received a pension, a payment in lieu of 12 weeks’ notice, and payment for 30 days’ accrued holiday.

He claimed that a 35 per cent reduction in rent, water and council tax charges for his required accommodation formed part of his remuneration. He said that it should therefore increase his pension and notice payment. He also challenged the daily rate used for holiday pay.

His pension claim was brought in the Central London County Court. The judge held that the pension rights were statutory and that the court lacked jurisdiction, while dismissing the notice-payment and holiday-pay claims. The central issue on appeal was whether the Local Government Superannuation Regulations 1986 required the pension dispute to be determined exclusively through an appeal to the Secretary of State.

Disposition. The court allowed the appeal on the pension issues by a majority of Evans and Ward LJJ, remitting them to the County Court. It dismissed the appeal concerning payment in lieu of notice and holiday pay.

1. Holiday pay and notice payment. Evans LJ held, with the agreement of Pill and Ward LJJ on these issues, that an entitlement to 30 days’ holiday pay meant 30 notional working days. The daily rate was 1/365th of annual salary. No additional weekend days were payable. The undertaking to pay 12 weeks in lieu of notice meant salary payments for that period. It did not include the 35 per cent reduction in accommodation-related charges, which was linked to the obligation to occupy the flat and ceased with the contract.

2. Private right and County Court jurisdiction. Evans LJ held that the appellant had a private law right to receive the pension payable under the scheme. The fact that the right was statutory, and that its extent raised a public law issue, did not exclude an ordinary action without a positive statutory prescription to that effect. The pension claim was also founded on the employment contract within section 15(1) of the County Courts Act 1984, since proof of the contractual terms of remuneration was necessary to establish it.

3. Effect of the statutory appeal procedure. The Local Government Superannuation Regulations 1986 required the authority and, on appeal, the Secretary of State to determine entitlement and amount according to law. They did not confer an unfettered discretion, expressly exclude the court’s jurisdiction, or make an appeal to the Secretary of State a precondition to civil liability. Here the material issue was a question of law: whether the rent reduction formed part of contractual remuneration and therefore pensionable remuneration. Evans LJ, with whom Ward LJ expressly agreed, held that it was not an abuse of process to seek declaratory and monetary relief in the County Court.

4. Minority view and order. Pill LJ accepted that pension rights could in an appropriate case be enforced by ordinary action, but regarded the pleaded claim as insufficiently clear and considered that an appeal to the Secretary of State should occur first. He would have stayed, rather than remitted, the action. The majority remitted the pension entitlement and declaration issues for determination, including any estoppel issue arising from pension contributions.

• Court of Appeal (Civil Division): Allowed the appeal on pension entitlement issues and remitted them to the County Court; dismissed the appeal on payment in lieu of notice and holiday pay.
• Central London County Court (HHJ Green QC): Dismissed the holiday-pay and notice-payment claims, and held that it had no jurisdiction to determine the pension claim.