Part-time judge fails in appeal for pension entitlement to be backdated

The Court of Appeal in London ruled that the Part Time Workers Directive did not have “retroactive effect”.

The Master of the Rolls, Lord Dyson, sitting with Lord Justice Lewison and Lord Justice Underhill, heard that Dermond O’Brien QC, who was appointed as a recorder sitting part-time on 1 March 1978 and held that office until 31 March 2005, was entitled to a pension by virtue of the Part Time Workers Directive (PTWD), which the United Kingdom was required to transpose into domestic law by 7 April 2000.

The question in the appeal was whether, in calculating the amount of the pension that he was entitled to receive, the calculation should have brought into account Mr O’Brien’s sitting days since the beginning of his appointment, or only those that took place after 7 April 2000.

The Employment Tribunal held that the calculation should take into account all Mr O’Brien’s sitting days, but the Employment Appeal Tribunal held the contrary, prompting Mr O’Brien to challenge the EAT’s decision.

The judges explained that the “no retroactivity” principle of EU law meant that EU legislation did not have retroactive effect unless it was clear from its terms or general scheme that the legislator intended such an effect, while the “future effects” principle provided that the amending legislation applied, unless otherwise specifically provided, immediately to the future effects of a situation which arose under the law as it stood before amendment.

Mr O’Brien argued that the nature of the domestic judicial pension scheme was such that a judge’s final pension could not be known until he or she actually retired.

It was submitted that the “future effects” principle should be applied so that his entitlement be calculated by reference to his service as a judge prior to the EU Directive coming into force.

However, the judges held that the principle of legal certainty - a fundamental principle of EU law - required that “the extent of rights falls to be determined on the basis of the Community rule which applied at the time of the period of service on the basis of which those rights were acquired”.

In a written judgment, Lord Justice Lewison said: “It is, to my mind, clear…that pension rights attributable to a particular period of service are acquired definitively during that period of service; and that the legal situation created by that period of service is definitively fixed on expiry of that period of service.

“At the time of Mr O’Brien’s service before 7 April 2000 as a part-time worker he acquired no pension rights, and cannot do so retroactively. Accordingly I agree with the EAT that Mr O’Brien’s appeal fails.”

Lord Justice Underhill added that under EU law the right to a pension payment was regarded as accruing at the time of the service to which it was referable, notwithstanding that no payment would fall to be made until retirement, and that that constituted a “legal situation which has exhausted its effect”.

It followed that the future effects principle did not apply in the way for which counsel for the appellant contended.

Lord Justice Underhill said: “On the contrary, to treat Mr O’Brien’s entitlement to a pension calculated by reference to service prior to the coming into effect of the Part Time Workers Directive would be to give the Directive retroactive effect.”