Pension scheme: Discrimination

A series of Pensions Acts between 1995 and 2014 had equalised the state pension age for women with that of men by raising the state pension age for women from 60 to 65 and then raised the age at which both men and women could claim their state pension. The claimants, women born in the 1950s who were affected by those adjustments, appealed against the dismissal of their claims by the Divisional Court. They claimed, among other things: (i) that the legislation at base gave rise to direct age discrimination contrary to art 14 of the European Convention on Human Rights (art 14) in conjunction with art 1 of the First Protocol to the European Convention on Human Rights; (ii) indirect sex discrimination contrary to EU law and indirect discrimination contrary to art 14 on grounds of sex or of sex and age combined; and (iii) that the Secretary of State for Work and Pensions had failed in her duty to notify them far enough in advance of the fact that they would not, as they had expected, start receiving their pension at age 60. In dismissing their appeal, the Court of Appeal, Civil Division, rejected all the claimants’ grounds of appeal.

A series of Pensions Acts between 1995 and 2014 had equalised the state pension age for women with that of men by raising the state pension age for women from 60 to 65 and then raised the age at which both men and women could claim their state pension. The Pensions Act 1995 (PA 1995) raised the state pension age for women on an incremental basis starting with those reaching age 60 in 2010. A woman born before 6 April 1950 would still receive her state pension at age 60 but a woman born after that date would only receive her pension on a specified date when she was aged between 60 and 65, depending on her date of birth.

Consequently, the Pensions Acts created three different cohorts of women: (i) women born before 6 April 1950 who attained pensionable age at the age of 60 (pre-1950s women); (ii) women born between 6 April 1950 and 5 October 1954 who attained pensionable age when they were aged between 60 and 66; and (iii) women born after 5 October 1954 but before 6 April 1960 who attained pensionable age at 66.

The appellants were two women born in the 1950s who fell within the third group and accordingly, had a state pension age of 66. Their challenge to the legislation at base was that although one of the aims of PA 1995 was to end the discrimination based on gender that had previously allowed women to claim their pension five years earlier than men, that equalisation had run ahead of actual improvements in the economic position of women in their age group. They claimed that they were in no better position in terms of opportunities for stable, well-paid work than women born earlier than them who had not been caught by the legislation and have continued to receive their pensions at age 60. The appellants further claimed that women born in the 1950s were not treated equally with men during their working lives and they had therefore arrived at their early 60s in a poorer financial position than men of that age, making it harder for many of them to manage without a state pension.

The appellants alleged: (i) that the legislation gave rise to direct age discrimination contrary to art 14 of the European Convention on Human Rights (art 14) in conjunction with art 1 of the First Protocol to the Convention (Ground 1); indirect sex discrimination contrary to EU law and indirect discrimination contrary to art 14 on grounds of sex or of sex and age combined (Ground 2); (iii) that the Secretary of State for Work and Pensions had failed in her duty to notify them far enough in advance of the fact that they would not, as they had expected, start receiving their pension at age 60 (Ground 3); (iv) that they should have been granted the declaratory relief they sought, even though it had been many years since the legislation that they challenged came into force.

Permission to apply for judicial review was refused on the papers on the basis that the application was well and truly out of time and that there was no case for an extension of time. Following an oral hearing of the appellants’ renewed application for permission, however, an extension of time was granted for filing the claim, if the extension of time was required.

The appellants’ judicial review claim was dismissed by the Divisional Court (see [2019] All ER (D) 31 (Oct)). Permission to appeal was subsequently granted.

(1) Whether the legislation unlawfully discriminated against the appellants on grounds of age, contrary to art 14 in conjunction with A1P1.

It was accepted that there was an additional factor in the present case in that the comparator group of pre-1950s women was defined not only by the fact that they fell on the more favourable side of the cut-off date for the application of PA 1995 but by their date of birth.

It was common ground that age was an ‘other status’ for the purposes of art 14. It was also accepted by the Secretary of State that the legislation removing the appellants’ entitlement to the state pension fell within A1P1 and hence within the scope of art 14. The two areas of contention on Ground 1 were whether women born before 6 April 1950 were a valid comparator group for the purposes of art 14 and whether the difference in treatment had been justified (see [28] of the judgment).

It was well established that where a difference in treatment arose because one group fell on the wrong side of a line drawn by legislation to determine those to whom the legislation would apply, art 14 was not engaged by comparing them with a group which fell on the more favourable side. However, the present state of the jurisprudence of the ECHR had not reached the point that any comparator group was invalid because it was a group that remained unaffected by prospective legislation, in circumstances where that group was defined not merely by reference to the date when the legislation comes into effect but by reference to a protected characteristic (see [29] of the judgment).

With regard to whether the difference in treatment had been justified, the correct test for justification in that context was whether the measures under challenge were manifestly without reasonable foundation (MWRF). Further, in reviewing the decision of the lower court an appellate court on the issue of proportionality under the ECHR, the appeal court should not second guess the first instance judge. It should not carry out the balancing task afresh as though it were rehearing the case but had to adopt a traditional function of review, asking whether the decision of the judge below had been wrong (see [41] of the judgment).

In the present case, there was no basis for impugning the Divisional Court’s conclusion that the legislation equalising and then raising the state pension age had been justified. The Divisional Court had been right to approach the issue on the basis that that legislation operated in a field of macro-economic policy where the decision-making power of Parliament was very great. The urgency of reform in relation to the state pension age coupled with a recognition of the difficulties that women still experienced in building up adequate pension entitlement had been fully appreciated by the government when promoting the legislation (see [42], [43] of the judgment).

Despite the appellants’ evidence regarding their own experience and despite the sympathy felt for the appellants and other women in their position, the present case was not a case where the court could interfere with the decisions taken through the Parliamentary process. In the light of the extensive evidence presented by the Secretary of State, in agreement with the Divisional Court, it was impossible to say that the government’s decision to strike the balance where it had between the need to put state pension provision on a sustainable footing and the recognition of the hardship that could result for those affected by the changes was MWRF (see [55] of the judgment).

Further, in agreement with the Divisional Court, the appellants’ contention that the government could have implemented those changes in a less intrusive way was unsustainable. That submission did not give sufficient weight to the evidence about the urgency with which reform had been needed in the light of the increases in life expectancy and the falling OAD and failed to take into account the evidence provided that the legislation increasing the state pension age had included other elements in a package of measures designed to mitigate the hardship caused by the absence of a state pension in the years 60-66. Furthermore, it could not be accepted, as claimed by the appellants, that the Divisional Court had asked the wrong question by asking whether the government had explained why the legislation had been brought. They argued that the correct question had been whether the government had explained the disproportionate effect on women in that age group. The Divisional Court had already described the factors that had made an equalisation of the state pension age urgent. It had also described the discussion in the 1991 Green Paper of the different options for equalising the state pension age and the need for it to be phased in (see [56]-[59] of the judgment).

Ground 1 of the appeal would therefore be dismissed (see [60] of the judgment).

R (on the application of R) v Chief Constable of Greater Manchester Police and another [2018] UKSC 47 applied; R (on the application of DA and others) v Secretary of State for Works and Pensions; R (on the application of DS and others) v Secretary of State for Work and Pensions [2019] UKSC 21 applied; Langford v Secretary of Defence [2019] EWCA Civ 1271 followed; McCloud and others v Lord Chancellor and another; Sargeant and others v London Fire and Emergency Planning Authority and others [2018] EWCA Civ 2844 distinguished; Barber v Guardian Royal Exchange Assurance Group: C-262/88 C-262/88 considered; Carson v United Kingdom (Application No 42184/05) 51 EHRR 369 considered; Zammit v Malta (App No 1046/12) 65 EHRR 666 considered; Ackermann Saatzucht GmbH & Co. KG and others v European Parliament and another C-408/15 considered.

(2) Whether the Pensions Acts led to indirect sex discrimination or discrimination on the basis of sex and age combined under EU law and the Convention.

In the context of EU law, the appellants relied on art 4 of Council Directive (EEC) 79/7 (the Directive). Pursuant to art 4: ‘The principle of equal treatment means that there shall be no discrimination whatsoever on ground of sex either directly, or indirectly by reference in particular to marital or family status, in particular as concerns: … — the calculation of benefits, including increases due in respect of a spouse and for dependants and the conditions governing the duration and retention of entitlement to benefits.’ The Secretary of State relied on the exclusion in art 7(1)(a) of the Directive, which set out five exclusions, most of which were directed at provisions which were likely to favour women. The appellants submitted that art 7 only permitted member states to maintain in place temporarily legislation which set different state pension ages for men and women. They claimed that it allowed a derogation for discrimination between the sexes in setting unequal state pension ages but, they contended, did not go further in permitting an equalisation measure that indirectly discriminated against a particular cohort of women who were disadvantaged as compared to men of the same age.

The appellants’ interpretation of art 7(1)(a) was incorrect. It was true that, as a derogation, art 7 had to be construed narrowly but as the Divisional Court had stated, the language of the provision did not support such a limitation. It would also lead to an absurd position whereby any move towards equalising pensionable age would fall within the scope of the Directive, despite the clear intention expressed in art 7(2) that member states should periodically consider whether the removal of excluded measures could be justified. In agreement with the Divisional Court, there was no sense or utility in such a construction of art 7. Accordingly, the Divisional Court was right to dismiss the claim for indirect sex discrimination under the Directive on the ground that the derogation in art 7(1)(a) applied (see [65], [69] of the judgment).

In the context of the Convention, the appellants relied on art 14 of the Convention. However, in the present case, there was no sufficient causal link between the withdrawal of the state pension from women in the age group 60 to 65 and the disadvantage caused to that group. The fact that poorer people were likely to experience a more serious adverse effect from the withdrawal of the pension and that groups who had historically been the victims of discrimination in the workplace were more likely to be poor did not make it indirectly discriminatory to apply the same criterion for eligibility to everyone, if that criterion was not more difficult for the group with the protected characteristic to satisfy. The same reasoning applied to the increase from 65 to 66 for both genders. The parties’ evidence had not focussed separately on a comparison between women aged between 65-66 and men in that age group. Even if it could be shown that women of that age were statistically more likely to be reliant on a state pension for an adequate income, that would not be sufficient to establish that applying the same state pension age was indirectly discriminatory (see [83], [84] of the judgment).

Even if the appellants were able to establish that the current state pension age regime was indirectly discriminatory for the purposes of art 14, the Divisional Court was right to find that the regime was justified so that the challenge on that basis had to fail. In that context, the appellants’ submission would be rejected that a different, more stringent test applied for justification either because the MWRF test was not the right test or because the content of that test was different when it applied in a case of sex discrimination. The MWRF test was appropriate in a case like the present appeal (see [85], [91] of the judgment).

Ground 2 of the appeal would be dismissed (see [91] of the judgment).

Essop and others v Home Office (UK Border Agency); Naeem v Secretary of State for Justice [2017] UKSC 27 applied; Richards v Secretary of State for Work and Pensions: C-423/04 C-423/04 considered; Vrountou v Cyprus (App. No. 33631/06) 65 EHRR 1075 considered; JD and another v United Kingdom (App. nos. 32949/17 and 34614/17) 48 BHRC 36 considered.

(3) Whether the Secretary of State was in breach of an obligation to notify the appellants of their new pension age.

There could be no legitimate expectation arising from the fact that different state pension ages for men and women had been maintained over many years. It was settled law that individuals and businesses ran the risk that Parliament might change the law governing their affairs; no one had a vested right to the continuance of the law as it stood in the past (see [97] of the judgment).

It fell to be determined whether there had nonetheless been an obligation to notify those affected when such a change did occur, as argued by the appellants. In the light of the evidence, the Divisional Court had been fully justified in holding that there had been no duty to notify those affected by the change in state pension age and that there had been adequate and reasonable notification given by the publicity campaigns implemented by the Department over a number of years (see [120] of the judgment).

Ground 3 would be dismissed (see [120] of the judgment).

Wilson v First County Trust Ltd [2003] UKHL 40 applied; Niazi Services Ltd v Van der Loo [2004] EWCA Civ 53 distinguished; Cooper v Wandsworth Board of Works 14 CBNS 180 considered; R v Secretary of State for the Environment, ex p Hammersmith and Fulham London Borough Council [1991] 1 AC 521 considered; R (on the application of BAPIO Action Ltd) v Secretary of State for the Home Department [2008] UKHL 27 considered.

(4) Whether relief should be refused.

CPR 54.5(1) provided that a claim for judicial review should be made ‘promptly and … in any event not later than 3 months after the grounds to make the claim first arose.’ That time limit could not be extended by agreement between the parties but CPR 3.1(2)(a) empowered the court to extend or shorten the time for compliance even if that time had expired. Section 31(6) of the Senior Courts Act 1981 (SCA 1981) provided that, where there had been ‘undue delay’ in making an application for judicial review, the court could refuse to grant permission or relief: ‘… if it considers that the grant of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration.’

The adoption of each Pensions Act affecting the appellants’ pension age was a single act which had been completed for that purpose at the latest when the legislation had been brought into effect. In accordance with established authority, the time limit in CPR 54.5 started to run when a person was affected by the application to him or her of the challenged policy or practice (see [124]-[126] of the judgment).

Applying that principle to the present case, the appellants had had standing to bring judicial review proceedings challenging the Pensions Acts which had affected them as soon as those Acts had been passed. It was inevitable once those Acts had been passed that the appellants’ entitlement to a state pension would be deferred. It followed that the claims were, therefore, substantially out of time and could only be brought if time was extended

(see [127] of the judgment).

In the light of the grant of permission and extension of time, the question whether the proceedings were time barred had not been argued before the Divisional Court. The issue of delay therefore arose only as a factor in the court’s consideration of the discretionary grant of relief. It was settled law that if leave was given and was not set aside, then it could not be re-opened at the substantive hearing on the basis that there was no ground for extending time. What the court could do under SCA 1981 s 31(6) was to refuse to grant relief (see [128] of the judgment).

The present position was even stronger given that time had been expressly extended time if an extension of time was needed. The court hearing the substantive application could still refuse relief under s 31(6) on the ground of undue delay because the extension of time did not negative the existence of undue delay (see [133] of the judgment).

Ground 4 of the appeal would be dismissed (see [134] of the judgment).

Caswell v Dairy Produce Quota Tribunal for England and Wales [1990] 2 AC 738 applied; R v Criminal Injuries Compensation Board, ex p A [1999] 2 AC 330 applied; R (on the application of Badmus and others) v Secretary of State for the Home Department [2020] EWCA Civ 657 followed; O’Connor v Bar Standards Board [2017] UKSC 78 distinguished; R (on the application of Lichfield Securities Ltd) v Lichfield District Council [2001] EWCA Civ 304 explained.

Appeal dismissed.

Decision of the Divisional Court [2019] All ER (D) 31 (Oct);  affirmed.

 

Michael Mansfield QC, Henrietta Hill QC, Adam Straw and Keina Yoshida (instructed by Birnberg Peirce Solicitors) for the appellants.

Sir James Eadie QC and Julian Milford QC (instructed by The Treasury Solicitor) for the respondent.

Neneh Munu - Barrister