Legal claims on behalf of teachers and doctors are being launched against the government over claims that changes to public sector pension schemes in 2015 were discriminatory against younger workers.
Law firm Leigh Day said it was preparing employment tribunal cases for several public sector groups – including teachers, doctors and prison officers – on the grounds that they were moved to a less beneficial scheme than their peers who were closer to retirement.
The firm said these public sector workers were forced to move on to a new government pension scheme that was “less beneficial than their old scheme”, while older workers within 10 years of retirement were allowed to remain on the old scheme as part of a transitional arrangement.
The firm said claims on behalf of other workers in the sector could soon follow suit.
- Public sector pension scheme rules ‘may have to change’ following appeal court victory
- Employers may have to cut benefits to fund pensions, experts warn
- NHS could owe doctors millions of pounds in underpaid wages
This latest wave of legal action follows the Supreme Court’s refusal earlier this year to hear an appeal by the government against a landmark ruling that found alterations to the terms of judges’ and firefighters’ pensions were discriminatory.
In July, the Supreme Court ruled the government’s ‘transitional protection’ scheme – which kept workers closest to retirement on a more generous pension following the introduction of public sector pension reforms in 2015 – was discriminatory to those too young to benefit, after a group of London firefighters brought a case to an employment tribunal in February 2017.
As a result of the ruling, the government confirmed any remedy for discrimination would need to be applied to all public sector schemes that used transitional protection arrangements, which include all major public service pensions schemes.
This includes schemes for the NHS, civil service, teaching, policing, the armed forces and local government. The government admitted that this could add an estimated £4bn annually to pension liabilities from 2015.
Nigel Mackay, partner at Leigh Day, said they believed the government was “short-changing hundreds of thousands” of doctors and teachers who were moved on to the less beneficial scheme, and this could amount to age discrimination in an employment tribunal.
“Public sector pension schemes have been known to provide better than average benefits to reflect the valuable contribution that those in the public sector make to society,” Mackay said. “However, the changes made by the government have unfairly left younger public sector workers out of pocket.”
Moira Warner, senior business development manager at Royal London, told People Management: “The form of compensation, including whether this is backdated to April 2015, will need to satisfy the employment tribunal in respect of the firefighters’ and judicial schemes, and it is to be expected that the government would want to pursue a similar remedy for the other schemes.
“What also remains to be seen is whether the estimated £4bn per annum cost burden arising from putting things right is met from longer-term adjustments to the benefits or contributions of the whole membership.”
But Mackay argued that the government has not made any commitments to remedy the judges and firefighters who did not bring claims to the employment tribunal, or any other public sector workers who have also been affected by the same changes to their pension policy.
He added that there was no guarantee the government would compensate public sector workers unless they brought legal action.
In July, the British Medical Association (BMA) announced that at least a dozen doctors were set to make claims of age discrimination against the government because they believed the NHS’s transitional pension scheme, which they say they were “forced” to join, would result in significant financial losses on retirement.
The BMA said at the time that although doctors’ pension schemes were different, it believed the underlying legal principles were essentially the same as in the cases brought by the firefighters, and it wanted the government to agree that the changes adversely affected younger members.