Pension scheme - entitlement to pension - 'retirement at employer's request' - not encompassing compulsory redundancy

AGCO Ltd v Massey Ferguson Works Pension Trust Ltd and Others: CA (Lords Justice Aldous, Sedley and Rix): 17 July 2003

The employer operated a tractor manufacturing plant where it employed 1,305 employees who were members of one of two pension schemes.

In June 2002, the employer announced that it was to close the plant in two stages, which would inevitably involve most of the employees being made redundant.

About 1,090 employees were made compulsorily redundant, and about 20 employees took voluntary redundancy.

Two representative employees commenced an action claiming that both those who were made voluntarily and compulsorily redundant were entitled to claim under the company's pension schemes on the basis that a pension was payable where retirement was 'at the request of the employer after a member's 50th birthday'.

The judge held that both categories of former employees were included in the pension scheme.

The employer appealed.

Nicholas Warren QC and Michael Tennet (instructed by Slaughter & May) for the employer; Sarah Asplin QC (instructed by Mayer Brown Rowe & Maw) for the first defendant, Massey Ferguson Works Pension Trust Ltd; Michael Furness QC and Joanna Smith (instructed by Taylor Wessing) for the second and third defendant representative employees.

Held, allowing the appeal in part (Lord Justice Sedley, dissenting, in favour of allowing the appeal in full), that the case of voluntary redundancy fitted better in the camp of retirement at the request of the employer; that there was nothing in the rules to require, or naturally to suggest, that the words 'retirement' or 'retires' were to be given a broad meaning able to encompass an enforced case of dismissal such as was to be found in compulsory redundancy; and that, accordingly, compulsory redundancy was outside the scope of the schemes as not amounting to a case where a member retired from service at the request of the employer.