O'Brien v Ministry of Justice

EU measures apply immediately to future effects of ongoing legal situations, but cannot retrospectively alter rights whose legal effects were exhausted or definitively fixed before the measure. Occupational pension rights accrue during the service to which they relate, so the applicable law is generally the law in force during that service. This applies to the amount of a pension and to the class of survivor beneficiaries. The distinction between qualifying service for access to a scheme and service used to calculate benefits remains important. A clear domestic provision excluding benefits earned before a specified date cannot be reinterpreted contrary to Parliament’s purpose, and disapplication is unavailable where the relevant EU right arose only after the pension rights had crystallised.

Two appeals concerned the temporal application of EU equality legislation to occupational pensions. Mr O’Brien, a part-time Recorder, claimed that all his sitting days since 1978 should count towards his pension under the Part Time Workers Directive. The Employment Tribunal allowed his claim, but the Employment Appeal Tribunal reversed that decision in [2014] ICR 773.

Mr Walker claimed that his husband should qualify for a surviving spouse’s pension under an occupational scheme, although all his service ended before the relevant EU and domestic changes. The Employment Tribunal upheld his claim, but the Employment Appeal Tribunal reversed it in [2014] ICR 645. The central issue was whether pension rights, once accrued by reference to completed service, could be enlarged retrospectively by later EU or domestic law.

Lewison LJ gave the leading judgment. Underhill LJ stated essentially the same reasons, and the Master of the Rolls agreed. The Court of Appeal declined to refer either appeal to the Court of Justice and dismissed both appeals.

1. Temporal principles. The no-retroactivity and future-effects principles are complementary. A new EU rule applies immediately to the future effects of an ongoing situation, but not where the legal effects of the relevant situation were exhausted and the situation was permanently fixed before the change.
2. Mr O’Brien. Pension rights accrue incrementally during the service to which they relate. The right is vested during that service even though payment is deferred until retirement. This analysis applies to final-salary schemes and survivor pensions. INPS v Bruno concerned the qualifying period needed to obtain access to a pension, not the periods of service used to calculate the amount payable. Service before the Part Time Workers Directive entered into force therefore could not retrospectively create pension rights.
3. Mr Walker. The same accrual principle applies to the class of persons entitled to a survivor pension. The right attributable to Mr Walker’s completed service was fixed before the Framework Directive and before civil partnerships were introduced in the United Kingdom. Equality Act 2010, Schedule 9 paragraph 18, was therefore compatible with EU law and plainly intended to exclude claims relating to benefits earned from earlier service.
4. Interpretation and disapplication. The Marleasing duty does not permit a court to contradict clear legislative purpose or make new law. The conditions for disapplying national legislation under Kücükdeveci were not met. The Court was sufficiently confident of the answer to apply the acte clair approach and make no reference.

• Court of Appeal (Civil Division). On 6 October 2015, both appeals were dismissed and no reference was made to the Court of Justice.
• Employment Appeal Tribunal. The EAT reversed the decisions in favour of Mr O’Brien and Mr Walker. The decisions were reported at [2014] ICR 773 and [2014] ICR 645, respectively.
• Employment Tribunals. The tribunal accepted Mr O’Brien’s claim that all his sitting days should count and accepted Mr Walker’s claim to equal treatment under the pension scheme.