Judgment handed down in the case of O’Brien v Ministry of Justice

Robin Allen QC

Rachel Crasnow QC

Tamar Burton

The CJEU has this morning handed down judgment in the case of O’Brien v Ministry of Justice (Case C-432/17). The judgment can be found here.

In a 13 year fight for a pension, Dermod O’Brien has succeeded in his second visit to the CJEU. He was represented by his Cloisters’ team of Robin Allen QC, Rachel Crasnow QC and Tamar Burton.

The case concerns discrimination against part-time judges in the calculation of pensions. The issue is whether periods of service as a part-time judge prior the coming into effect of Part Time Workers Directive (97/81/EC) should be taken into account in calculating the amount of pension to be paid upon retirement.

The background

Mr O’Brien was appointed as a Recorder sitting part-time on the Western Circuit on 1 March 1978, an office he held until 31 March 2005. He is entitled to a pension by virtue of the Part Time Workers Directive, which the United Kingdom was required to transpose into domestic law by 7 April 2000, following the Supreme Court’s previous decision in 2012: see Department of Constitutional Affairs v O'Brien [2013] I.C.R. 499.

When the case was remitted to the employment tribunal Mr O’Brien, alongside other part-time judges, contended that he was entitled to have his service prior to 7 April 2000 taken into account in the calculation of the amount of his pension. He relied on the concept of European law known as “the future effects principle”; namely that “new rules apply, unless otherwise specifically provided, immediately to the future effects of a situation which arose under the old rule” as set out in the joined cases of Istituto Nazionale della Previdenza Sociale v Bruno & Pettini C-395/08 and C-396/08 [2010] ECR I-5199.The Ministry of Justice accepted that his pre-2000 service was relevant for the issue of qualification for a pension but not quantification of a pension. For Mr O’Brien the difference between these competing submissions is a period of 27 years or a period of less than five years.

The Employment Tribunal issued a decision in Mr O’Brien’s favour on this issue; on appeal, the Employment Appeal Tribunal allowed the Ministry of Justice’s appeal; and the Court of Appeal agreed with the Employment Appeal Tribunal and dismissed Mr O’Brien’s appeal.

The Supreme Court has indicated that the majority of the Court accept the Appellants’ submission that it is unlawful to discriminate against part-time workers when a pension falls due for payment. In so far as part of the period of service took place prior to the Directive’s entry into force, the Directive applies to the future effects of that situation.

However, the Supreme Court concluded that the point is not acte clair and referred the issue to the CJEU.

CJEU Judgment

The CJEU concluded that part-time work undertaken before the deadline for transposing the Part-Time Workers Directive on 7 April 2000 must be taken into account for the purposes of calculating a retirement pension.

The Court accepted Mr O’Brien’s submission that counting service prior to the Directive did not equate to a retroactive application of the law:33    

It is important, in this regard, to bear in mind that the matter of the retroactive effect of a rule of law cannot be confused with that of the temporal effects of a judgment of the Court. As the Court pointed out in its judgment of 17 May 1990, Barber (C‑262/88, EU:C:1990:209), the circumstances to which a restriction on the temporal effects of a judgment is subject relate to the existence of serious difficulties that may be created by that judgment as regards events in the past.34   

In the present case, it must be stated that the United Kingdom Government at no time requested that the Court limit the temporal effects of its judgment of 1 March 2012, O’Brien (C‑393/10, EU:C:2012:110). A restriction of that kind may be permitted only in the actual judgment which gives the ruling on the interpretation requested (see, to that effect, judgment of 17 May 1990, Barber, C‑262/88, EU:C:1990:209, paragraph 41).35  

Second, with regard to the argument of the United Kingdom Government that the calculation of the period of service required to qualify for a retirement pension should be distinguished from the rights to a pension, it must be noted that it cannot be concluded from the fact that a right to a pension is definitively acquired at the end of a corresponding period of service that the legal situation of the worker must be considered definitive. It should be noted in this respect that it is only subsequently and by taking into account relevant periods of service that the worker can effectively avail himself of that right with a view to payment of his retirement pension.36    

Consequently, in a situation such as that in the main proceedings, in which the accrual of pension entitlement extends over periods both prior to and after the deadline for transposition of Directive 97/81, it should be considered that the calculation of those rights is governed by the provisions of that directive, including with regard to the periods of service prior to its entry into force.

Impact

The judgment will have a significant financial impact on the calculation of pensions for the part-time judiciary as well as other part-time workers.

The judgment is also likely to affect the calculation of the limitation period in pension cases as the right to a pension does not accrue until a pension is calculated.

The case has wider significance beyond the issue of discrimination against part-time workers. It is relevant for individuals who, for discriminatory reasons, did not accrue rights prior to the coming into effect of a Directive and who now seek to exercise rights obtained under a Directive.