The Secretary of State for Work and Pensions v D Beattie & Ors

Where the implementation of EU equality protection brings occupational-pension legislation within the scope of EU law, the general EU law principle of equal treatment may apply to an ongoing relationship between a scheme trustee and pensioner members. Its application to future pension payments is not retrospectively impermissible merely because service ended, benefits commenced, or a statutory reduction was first imposed before implementation.

After IP completion day, however, the European Union (Withdrawal) Act 2018 prevents disapplication of domestic legislation for incompatibility with a general principle of EU law, subject to the saving for proceedings begun before that day. A new appellate point may exceptionally be entertained where it is legally discrete, factually complete and of public importance; a fact-sensitive justification issue should ordinarily be raised before the tribunal.

The claimants were members, or a widow of a member, of a defined-benefit occupational pension scheme. Their employer became insolvent and, because they had not reached normal pension age when the assessment period began, their pensions were reduced under Pensions Act 2004 provisions.

They alleged direct age discrimination and relied on the non-discrimination rule implied into the scheme by section 61 of the Equality Act 2010. Article 3(b) of the Equality Act (Age Exceptions for Pension Schemes) Order 2010 would otherwise exclude the claims for pre-December 2006 service. The London Central Employment Tribunal disapplied that provision.

The Secretary of State appealed, raising the basis of the tribunal’s EU-law reasoning, the continuing nature of the claimants’ rights, the effect of the European Union (Withdrawal) Act 2018, and a proposed new justification ground.

1. Appeal allowed in part. The claims of Mr Hampshire and Mr Farrell could continue. The remaining claimants’ age-discrimination claims had to be dismissed because their proceedings began after IP completion day.

2. Reading the Employment Tribunal’s decision fairly and as a whole, it had applied the general EU law principle of equal treatment and non-discrimination, embodied in article 21 of the EU Charter. It had not treated the Framework Directive as directly effective against the private pension-scheme trustee. Grounds alleging horizontal direct effect of the Directive and consequent unlawful disapplication therefore failed.

3. The claimants’ relationship with the trustee remained ongoing after 2 December 2006. The trustee continued to decide and make pension payments, which were subsequently recalculated and uplifted. The relevant unequal treatment occurred when benefits were paid. Neither retirement, the commencement of payment, nor the statutory assessment-period reduction permanently fixed the position. Applying Walker v Innospec Ltd and ors [2017] UKSC 47, the future-effects principle therefore permitted reliance on equal treatment from implementation.

4. The principle of non-discrimination was capable of retention under section 4 of the European Union (Withdrawal) Act 2018. However, section 5(4) and Schedule 1 paragraph 3(2) generally removed the Charter and the power to disapply domestic legislation for incompatibility with general EU principles. Schedule 8 paragraph 39(3) preserved both matters for proceedings begun, but not finally decided, before IP completion day. That saving applied only to Mr Hampshire and Mr Farrell. The later claims could not use the three-year provision in paragraph 39(5), since their challenge sought the disapplication of the 2010 Order, which gave effect to, enforced, or could not have been different because of section 61(8) of the Equality Act 2010.

5. Alternatively, if the tribunal had relied directly on the Framework Directive, it would have erred. During an assessment period the trustee remained a private trustee owing fiduciary duties to members. It was not entrusted with a state public service, under state control, or given special powers, and was not an emanation of the state.

6. The Secretary of State could raise the Withdrawal Act point exceptionally on appeal because it was discrete, required no further factual inquiry and was of public importance. Permission for the proposed justification ground was refused: objective justification and proportionality required factual evidence and tribunal evaluation.

• Employment Appeal Tribunal: Allowed the Secretary of State’s appeal only in respect of claimants whose proceedings began after IP completion day; dismissed the other grounds in respect of all claimants and refused permission on the proposed justification ground.
• London Central Employment Tribunal: Employment Judge Gordon Walker, sitting alone, upheld the age-discrimination claims and disapplied article 3(b) of the Equality Act (Age Exceptions for Pension Schemes) Order 2010.