Ms J Green v British Airways plc and the trustees of the New Airways Pension Scheme (78914/2)

Jillian Green (JG) started work for British Airways plc (BA) as an air cabin crew employee in 1985. Under her contract of employment she agreed to be employed at any location worldwide, with her base at Heathrow. In January 2004 she went off sick and following an operation undertook ground duties, near her home in Liverpool, from July 2004 to March 2006. BA policy at the time was to find cabin crew who were on long term sick leave a ground job close to their home and not their contractual base.

In March 2006 JG declared herself unfit to work at all. Medical evidence obtained from a BA doctor in June 2006 concluded that JG would find it impossible to return to cabin crew duties, but was more than able to undertake ground duties. The doctor concluded that although ground duties were an option, working on the ground at Heathrow was unlikely to provide a satisfactory conclusion.  

In 2007 JG was offered a ground placement at Heathrow. She rejected the offer. BA then wrote to JG explaining that every effort had been made to find her a suitable role in Manchester but as there was nothing available, she was being offered the job at Heathrow. JG emailed BA saying she was unfit for any type of work, whether at Manchester or Heathrow.  

BA terminated her employment in February 2008 having declined to grant her an ill-health early retirement pension. JG appealed under stage 1 of the scheme’s internal dispute resolution procedure (IDRP). Although the Trustees had no power to award her an incapacity pension under their IDRP, they were required to check that BA had processed the ill-health request in accordance with the scheme rules.

Incapacity definition under the scheme rules

JG was only entitled to an ill-health pension if her employer terminated her employment on the grounds of ‘Medical Incapacity’ and BA notified the Trustees of this fact. Medical Incapacity was a three strand test: (i) incapacity from which she is unable to recover for the foreseeable future; (ii) which prevents her from carrying out her normal duties even after reasonable adjustment; and (iii) which prevents her from carrying out ‘appropriate alternative employment’ where this is offered by the employer.

‘Appropriate alternative employment’ was defined as suitable and reasonable employment in the opinion of the BA, taking into account the member’s skill and current salary level. BA had also issued a guidance note for doctors in its health service (BAHS) saying that a role would usually be considered as ‘suitable alternative employment’ if, amongst other things, the place of work was the same or within reasonable distance and it accommodated any present restrictions advised by the Company’s doctors. Although this guidance was not part of the rules, it became pivotal to the case.

Decision under stages 1 and 2 of the IDRP

Under stage 1 it was concluded that JG met the criteria under (i) and (ii) of the test, and that she should either be offered alternative suitable employment or BA ‘must’ award her an ill-health pension. On receiving correspondence from BA, explaining that she had been offered ‘alternative employment’, the decision under Stage 1 was reversed. Though there was some dispute as to whether she met the test under (iii), the decision-maker decided to rely on the assessment of BAHS that she was able to carry out ground duties.  

Under Stage 2 of the IDRP , the Trustees considered the position, together with the new medical evidence which they passed to BAHS, and concluded that she did not meet the test.

Pensions Ombudsman decision

In the Ombudsman’s view, the main reason for BA not granting JG an ill-health pension was her refusal to take the ground job at Heathrow. Whilst it was for BA to determine under the rules what that ‘alternative appropriate employment’ entailed, the Ombudsman could not agree that a decision to offer her a ground role could be made without taking account of any travel (i.e. flying) involved to access it. BA had not properly considered whether or not she could have done the job offered.

The Ombudsman concluded that when JG refused the Heathrow job, BAHS should have been asked to consider whether she was fit for normal duties and separately, if she was not, to advise on the alternatives taking account of the significant travel to Heathrow. The Ombudsman found a distinct lack of advice to either BA or the Trustees on whether the alternative employment offered at Heathrow was appropriate, bearing in mind that JG lived near Liverpool and was required to commute to Heathrow for her new duties.  

The Pensions Ombudsman upheld JG’s complaint with BA directed to reconsider her ill-health application and obtain a fresh assessment from BAHS which took account of the travel to Heathrow in the light of her illness. The Trustees were also found guilty of maladministration and fined £200 for not ensuring, as part of their stage 2 considerations, that the rules had been applied properly by the employer.

Comment

In practice, in schemes where the rules give the employer a unilateral power to decide ill-health cases, it is often difficult for trustees to have any idea what processes are being followed internally by the employer and its medical advisers. Trustees faced with a unilateral employer power should ensure that they communicate with the employer to understand what those procedures are and to see any accompanying guidance; the purpose being to establish that the rules are being followed correctly before they ever get an IDRP complaint.