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BBC wins pensions court case (Read 277 times)
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BBC wins pensions court case
Sep 19th, 2017, 10:42am
 
This is taken from The Time LAW REPORT - September 19 2017:

Cap to BBC final salary pension scheme lawful

Court of Appeal - Published: September 19, 2017

Bradbury v British Broadcasting Corporation

Before Lady Justice Gloster, Lord Justice Lewison and Lord Justice Henderson [2017] EWCA Civ 1144 Judgment: July 28, 2017

It was permissible for the BBC to put a cap of 1 per cent on the part of a pay rise that would be used to calculate pensionable pay for employees in the final salary sections of its pension scheme.

The Court of Appeal so stated when dismissing the appeal of John Bradbury against two orders made by Mr Justice Warren in the Chancery Division ([2012] EWHC 1369(Ch)) and ([2015] EWHC 1368 (Ch)), which dismissed his appeals against two determinations of the Pensions Ombudsman dated October 24, 2011, and December 23, 2013, dismissing complaints arising out of the conduct of his employer, the BBC, concerning his pension.

The claimant complained that the cap breached his right to a future pension linked to his final pay and infringed section 91 of the Pensions Act 1995. He also challenged the BBC’s processes and implementation and complained that the BBC had breached its implied duty of trust and confidence.

Mr Andrew Stafford, QC, and Mr Nicholas Randall, QC, for Mr Bradbury; Mr Michael Furness, QC, Mr David Craig, QC, and Ms Emily McKechnie for the BBC.

Lady Justice Gloster said, noting that a number of other complaints to the Pensions Ombudsman had been stayed pending the outcome of the appeal, that on a proper construction of the language used in the trust deed to define basic salary and pensionable salary and the relevant scheme rules, the employer could indeed decide whether an increase in pay (or how much of the increase) counted as basic salary and thus was entitled to limit any increase in basic salary (as defined) as part of the process of determining its amount.

Given, as was accepted, the employee had no contractual right to any pay rise, there was no reason why it should not be open to the employer to determine how much of that pay rise would count as basic salary and therefore how much was “pensionable”.

It was never the case that all of the employee’s pay counted as basic salary. As defined, basic salary “does not include any other allowance, bonus, overtime earnings or temporary or fluctuating emoluments”. There was, therefore, nothing to support the proposition that the employee had a “right” to a link between pay and pension.

Section 91 of the Pensions Act 1995 had no application to the employee’s agreement to the cap, since the section only prevented the surrender of rights under the pension agreement, not a change to the content of the employee’s employment contract.

The employee’s right under the scheme rules was to a pension calculated by reference to the level of pay stipulated in the employee’s employment contract. A change to the employment contract, such as the cap, did not involve any surrender of pension rights because those pension rights merely reflected the terms of the employment contract.

The judge’s analysis of the relevant facts, and his conclusion that there was no breach of the employer’s duty of trust and confidence, could not be faulted.

The employer’s conduct had to be assessed against the reality of the background that it was faced with a multibillion-pound deficit in the scheme and where the trustees, the unions and the employer all

Lord Justice Lewison and Lord Justice Henderson agreed.

Solicitors: Walkers Solicitors; DLA Piper UK LLP.
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Re: BBC wins pensions court case
Reply #1 - Sep 20th, 2017, 10:48pm
 
So basically the term 'Final Salary Pension Scheme' in the BBC is now meaningless.
In a BBC wage slip the item marked as 'BASIC PAY' is also meaningless as far as pensions are concerned.
The interpretation of the laws in this country are becoming a joke!
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