R (Public and Commercial Services Union and others) v Minister for the Cabinet Office

This judicial review challenged the Minister's decision of 8 November 2016 to amend the Civil Service Compensation Scheme (CSCS) under section 1 of the Superannuation Act 1972 (the "2016 amendments"). The court held that the Minister breached the statutory duty to consult under section 1(3) read with section 2(3D) of the 1972 Act by excluding the PCSU from the second round of discussions on the revised terms and thereby failing to consult on the scheme as finally made. The court rejected the claimants' alternative grounds: it did not decide the Article 11 point as unnecessary, it held that entitlements under the CSCS amount to "possessions" for Article 1 of Protocol 1 but that the interference was objectively justified, and it found that the public sector equality duty in section 149 of the Equality Act 2010 had been satisfied. The court refused to refuse relief under section 31(2A) of the Senior Courts Act 1981 because the defendant had not shown it was highly likely the outcome would have been unchanged.

This was a rolled-up judicial review application brought by the Public and Commercial Services Union (PCSU) and two individual members seeking to challenge amendments to the Civil Service Compensation Scheme made on 8 November 2016. The claimants alleged (i) breach of the 1972 Act consultation duty (section 1(3) read with section 2(3D)), (ii) breach of Article 11 ECHR by excluding the PCSU from consultation, (iii) breach of Article 1 of Protocol 1 ECHR (protection of property) by reducing compensation entitlements, and (iv) breach of the public sector equality duty (section 149 Equality Act 2010) in relation to the impact on disabled civil servants. The court granted permission and proceeded to a substantive hearing.

Factual and procedural background:

• The 2016 amendments reduced redundancy, voluntary exit and inefficiency payments and limited funded top-ups for early access to pension; they followed earlier CSCS reforms in 2010 and subsequent primary legislation which removed unions' veto and substituted a duty to consult with a view to reaching agreement.
• The Minister consulted publicly from 8 February to 4 May 2016 and held a first round of discussions with NTUC unions. A second round of meetings took place with some unions after a further invitation, but the PCSU and some other unions were excluded after refusing to give a pre-commitment that the Minister's starting proposal would form the basis of a package they would recommend to members.

Issues framed by the court: whether the Minister lawfully discharged his statutory consultation duty under the Superannuation Act 1972; whether exclusion of the PCSU engaged Article 11; whether the reductions interfered unlawfully with possessions under A1P1 and, if so, whether the interference was justified; whether the public sector equality duty was observed; and whether relief should be refused under section 31(2A) Senior Courts Act 1981 because the outcome would probably have been the same.

Reasoning and outcome on the issues:

• Statutory consultation: the court concluded the duty in section 1(3) read with section 2(3D) requires consultation "with a view to reaching agreement" on the particular terms of the scheme as finally made. Excluding the PCSU from the second round deprived it of consultation on the precise provisions that were ultimately adopted. That was unlawful.
• Article 11: unnecessary to decide given success on ordinary statutory interpretation; the court declined to determine Article 11 issues.
• A1P1: the court held CSCS entitlements constitute "possessions" (including on the basis of enforceable legitimate expectations) but concluded the interference was objectively justified by the public interest in public expenditure savings and struck a fair balance; the A1P1 challenge was dismissed.
• Equality duty: the court found the Minister had had due regard to disability impacts (relying on an earlier 2014 Equality Analysis and consideration of that material in 2016) and dismissed the section 149 challenge.
• Relief and section 31(2A): the court refused to withhold relief under section 31(2A) because the defendant had not discharged the high threshold of showing it was highly likely the outcome would not have been substantially different had the PCSU been properly consulted; missing contemporaneous records and the negotiation dynamics made the counterfactual uncertain.

The court upheld Ground (1) (statutory consultation) and dismissed the other grounds. The parties were invited to agree the form of relief; if they could not, the court would determine it.

The court upheld the claim in part. It held that the Minister acted unlawfully by breaching the duty to consult in section 1(3) read with section 2(3D) of the Superannuation Act 1972 because the PCSU was excluded from consultation on the terms ultimately adopted. The court dismissed the Article 11 challenge as unnecessary to decide, held that CSCS entitlements are "possessions" under Article 1 of Protocol 1 but that the interference was objectively justified, and found the Equality Act 2010 s.149 duty had been satisfied. Relief was not refused under section 31(2A) because the defendant failed to show it was highly likely the outcome would have been the same.