Pensions Ombudsman to revisit pension case on High Court’s instruction

14 November 2019

The High Court has instructed the Pensions Ombudsman to reconsider its decision from July 2018 in relation to Gail Downe, in which it stated that she was not entitled to full pension payments.

Ms. Downe was employed by the Society of College, National and University Libraries and was a member of the Universities Superannuation Scheme (USS) until November 2012. At that point, her employment was terminated, and terms documented in a compromise agreement.

USS rules state that in cases of redundancy, members may be able to receive their full pension if they meet certain criteria. In its original decision, the ombudsman asserted that Ms. Downe was not made redundant as she had voluntarily contacted her employer to set up a compromise agreement and was therefore not entitled to full pension payments under the rules. Ms. Downe appealed this decision, and on September 13, High Court judge Adam Johnson advised that the ombudsman should reconsider the case as they had taken too narrow an interpretation on the issue of redundancy.

Ms. Downe tried to apply for a full pension back in January 2013 and requested that the society confirm that the reason for the compromise agreement was redundancy, but her lawyer received a response from a HR representative disputing this. The representative explained “I am sorry, but I cannot confirm that the reason for [Ms Downe’s] compromise agreement was redundancy. She was not made redundant. You set out a suggested framework for a package which included a sum that you called a redundancy payment and we were happy to progress our discussion with you using that sort of short hand for payments but that does not mean that [Ms Downe] was redundant.”

The Financial Adviser reports that Ms. Downe advised the High Court that, due to a strained working relationship with her manager and a reorganisation of the team, her lawyer had contacted HR to discuss a possible severance agreement. Once this had been settled, a payment was made to Ms. Downe, some of which was listed as “enhanced redundancy pay”. She also argued that the restructuring of the team had all the characteristics of redundancy and that the word redundancy had been used verbatim in negotiations and in the compromise agreement document.

The society’s stance was that employment was terminated on grounds of mutual consent and that the compromise agreement did not explicitly disclose a reason for the termination.

Judge Johnson instructed that the case be revisited and stated “My conclusion is that the ombudsman’s analysis had a misplaced emphasis on the question whether the termination of Ms Downe’s employment arose at the instance of Society of College, National and University Libraries, and that in consequence the ombudsman did not properly or sufficiently address the test for redundancy in USS rule 1.1. For all the reasons given above, I would allow Ms Downe’s appeal to the extent I have identified and remit her complaint to the ombudsman.”

 


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