Calculating pension benefits for part-time workers

17 July 2017

The Supreme Court has referred a case to the European Court of Justice (ECJ) on whether or not years pre-2000 count for the purposes of calculating pension benefits for part-time workers.

With thanks to law firm Browne Jacobson for a summary of the case.

In handing down its judgment in the case of O'Brien v Ministry of Justice the Supreme Court is seeking guidance on whether or not the right to equal treatment in respect of pension benefits arises at the point of retirement (such that all of the worker’s employment should be taken into account regardless of when it took place).

The question has arisen in the long-running claim by Mr O’Brien, in which it was successfully argued that he should not be excluded from the judicial pension scheme on the basis that he was a part-time judge. In February 2013, after an 8-year court battle with the Ministry of Justice, the Supreme Court ruled that Recorders (who are fee-paid judges) are entitled to a judicial pension and the Ministry of Justice’s denial of a pension to them breached the legislation on part-time workers.

The case was referred back to the Employment Tribunal to determine the amount of the pension.

Mr O’Brien argued successfully at the tribunal that he was entitled to have his service prior to 7 April 2000 taken into account in calculating the amount of his pension. However the Court of Appeal agreed with the Employment Appeal Tribunal that the right to a pension payment is regarded as accruing at the time it is earned (i.e. when the work was done), even though no payment will be made until retirement.

Mr O’Brien  appealed to the Supreme Court.

Caroline Jones, a solicitor at law firm Browne Jacobson acting on behalf of O’Brien, said:

“A majority in the Supreme Court was not inclined to agree with the Court of Appeal. However, since the result was not sufficiently clear cut, a reference to the ECJ became necessary. Mr O’Brien welcomes the decision to refer the case and he is optimistic that parity will eventually be achieved for part-time workers with pre-2000 service.

Depending on the judgment of the ECJ, the effect on the value of the pension for those affected by this appeal could be very significant.

As well as ensuring fair treatment for part-time judges, this decision also has wider implications and will be an important yardstick for part-time workers in ensuring that they cannot be treated less favourably than full-time workers in respect of pension entitlement.”