The High Court has recently ruled that preferential treatment of widows over widowers in the NHS Pension Scheme is objectively and reasonably justified as it would cost £4 billion to put right.
Under the current rules of the NHS Pension Scheme, if a male GP dies, his widow will receive a pension based on all his contributions. However, if a female GP dies, her widower will only receive a pension from contributions made after 1988.
Iain Cockburn sought judicial review of this practice. His GP wife, Dr Clare Boothroyd, joined the NHS Pension Scheme in 1982, being a member for 24 years before her death in 2007. Mr Cockburn’s widower’s pension is worth £3,200 per year less than a widow’s pension in the same circumstances.
The Secretary of State for Health accepted that the discrepancy in pensions for widows and widowers was discriminatory.
Questions for the Court:
- Whether the claim was out of time under section 7(5) of the Human Rights Act 1998 (HRA).
- Whether the NHS Pension Scheme regulations have an objective and reasonable justification.
The judge, Mr Justice Supperstone, ruled that the proceedings were out of time under section 7(5)(a) of the HRA but used his equitable discretion under section 7(5)(b) to extend time. His reasons included:
- 600,000 contingent beneficiaries of the scheme are currently or potentially in the same position as Mr Cockburn;
- the claim raises a matter of public importance; and
- the issue is likely to impact on other public sector pension schemes.
Despite the BMA's claim that Mr Cockburn’s treatment amounted to gender discrimination, Supperstone J said there was an “objective and reasonable justification” for this.
The relevant legal test is in Article 14 of the European Convention on Human Rights. A difference of treatment is discriminatory if it has no objective and reasonable justification. In other words, does it pursue a legitimate aim and is the means employed proportionate to the aim to be achieved?
Although the judge stated that the discriminatory treatment was objectively justified, he did not explain why he reached that view. He gave great weight to the Government’s argument about the cost of retrospectively rectifying the NHS and other public sector schemes, which is apparently in the region of £4 billion.
The BMA has said that it is disappointed with the result and will continue to fight for fair pensions for all doctors. The next stage in the process may be an appeal to the Court of Appeal.
The decision is interesting from a number of perspectives. First, many private sector employers have faced very substantial costs in equalisation. If such an employer should now discover an equalisation issue, it may be appropriate to raise objective justification if it is disproportionately expensive. Second, the issue of GMP equalisation has not been resolved. The total cost to UK plc might be regarded as objective justification for not equalising GMPs. Third, to date, cost has not been seen as a prime reason for objective justification in pensions. Should the position differ where public sector pensions are involved? The identity of the employer and the scheme should be irrelevant. Fourth, should the cost to the employee be considered. In this case the female member receives less in return for her contributions than an equivalent male. Is there a case for a refund?
Costs were held to be a valid justification in a recent employment law case. In Cherfi v. G4S Security Services Ltd, the company was faced with incurring financial penalties and losing a contract if it did not meet the terms of a supply contract it had entered into with a third party. To meet the terms of the contract it prohibited Mr Cherfi from attending Friday lunchtime prayers away from the site where he should be working. The EAT decided the need for Mr Cherfi to remain on site was a proportionate means of achieving G4S’s legitimate aim. The EAT also made comment that it was possible to rely on cost alone to justify the discriminatory practice, if the cost would be disproportionately high to avoid or rectify a discriminatory impact. A clear steer may be given next year when the ECJ hands down its judgment in Fuchs v. Land Hessen – a claim of age discrimination where the question is whether saving budgetary resources and labour costs (by avoiding the recruitment of new staff) represents a legitimate aim.