In Secretary of State for the Home Department and ors v Sargeant and ors (heard jointly with Lord Chancellor and ors v McCloud and ors), the Court of Appeal has held that the government was not pursuing a “legitimate aim” when it introduced transitional pension arrangements.
Following reforms to the Firefighters Pension Scheme in 2015, transitional measures were introduced to protect firefighters who were within ten years of their normal pension age (NPA); along with tapering protection measures for those within 14 years of their NPA. The alleged aim was to “protect those closest to pension age from the effects of pension reform, since they would have least time to rearrange their affaires before retirement….”.
Over 5,000 other firefighters in England and Wales then challenged these transitional arrangements on the basis that they were age discriminatory in nature.
Section 13 of the Equality Act provides that an employer discriminates against a worker if they treat them less favourably on the grounds of age unless they can show such treatment is a proportionate means of achieving a legitimate aim. In those circumstances the treatment can be objectively justified.
Tribunal and EAT decisions
The employment tribunal held that that the transitional protection provisions were a proportionate means of achieving a legitimate aim and the “objective justification” test was met. On this basis it dismissed the claims for age discrimination.
The EAT agreed with the tribunal judge’s decision that the government did have a “legitimate aim” but held that she had failed to consider correctly whether it had used a “proportionate means” to achieve that legitimate aim. The government appealed against the finding it did not have a “proportionate means” of achieving a legitimate aim and the employees appealed against the finding that the government had a “legitimate aim” in the first place.
Decision of Court of Appeal
The Court of Appeal concluded that the government did not have a “legitimate aim” and therefore it was not even necessary for it to consider the issue of “proportionate means”.
It held that it was a nonsense for the legitimate aim to be to protect those closest to retirement from the effect of pension reform as this suggested that younger firefighters should solve their pension problems by leaving the fire and rescue service and find a better job. The idea that they could solve their problems by making different financial arrangements was wholly unrealistic given the level of earnings of firefighters.
In addition the Court of Appeal stressed the Government had produced no substantive evidence as to why it was necessary to protect older firefighters and the suggestion it was a “moral decision” which “felt right” was not good enough to make out that it had a “legitimate aim” for the purpose of the provisions. Instead, if the government’s opinion about older firefighters needing to be protected was based on something more than visceral instinct, they needed to explain what it was so that it could be assessed when considering the legitimacy of the chosen aims.
Although older workers closer to retirement were potentially, in principle, likely to face financial or other difficulties that younger firefighters might be able to avoid as they had more time to prepare, the government had to provide evidence to that effect.
In other words, the government had to be able to identify the concerns that it was trying to alleviate by introducing the transitional provisions, not least because those entitled to that protection were already materially better off than their younger colleagues.
The Government has asked for permission to appeal to the Supreme Court but as the Court of Appeal’s decision essentially turns on the Government’s inability to provide evidence that its aims were legitimate this will not be easy. In the absence of any further appeal the cases will return to the tribunal to consider the question of remedy.