Hogan Lovells

Key Dates

Downe v Universities Superannuation Scheme (USS) and Society of College, National and University Libraries (SCONUL) [2019] 2403 EWHC (ChD).

Judgment date 13 September 2019.


Summary

The High Court has held that the Pensions Ombudsman had not addressed the correct questions when deciding whether the appellant (Ms Downe) was entitled to an unreduced early retirement pension on redundancy under the rules of the Universities Superannuation Scheme (USS).

Background

Ms Downe was employed by the Society of College, National and University Libraries (SCONUL).  In April 2012, she went on long-term sick leave because of stress, then returned to work on a phased basis in September 2012.  In October 2012, SCONUL sent her an email about a proposed restructuring.  Shortly after this, Ms Downe's legal adviser contacted HR at her employer to discuss possible severance terms.  Her employment was terminated on 16 November 2012, on terms recorded in a compromise agreement.

The Pensions Ombudsman rejected Ms Downe's complaint that she should have been awarded an unreduced pension on grounds of redundancy.  Ms Downe appealed.

Decision of High Court

The definition of "redundancy" in the USS Rules closely followed the language in the Employment Rights Act 1996 (ERA), with the significant difference that the ERA is concerned with an employee who has been "dismissed by reason of redundancy".  The relevant early retirement provision in the USS Rules (rule 11) applies to a member "whose eligible employment is terminated by reason of redundancy", without reference to dismissal.

The judge (Adam Johnson QC) found that the relevant elements of the test for redundancy in the USS Rules were:

(a) had the employer's requirements for employees to carry out work of a particular kind ceased or diminished, or were they expected to cease or diminish? and
(b) was the termination of Ms Downe's employment wholly or mainly attributable to any such actual or expected cessation or diminution?

The Ombudsman had not clearly answered either question.  Instead, his analysis had a misplaced emphasis on whether the termination of Ms Downe's employment arose at the instance of her employer, or was instigated by her.  In particular, he had placed undue emphasis on the heading of rule 11 of the USS Rules: "Early retirement at the instance of the employer", when the rule itself was neutral as to whether the retirement was at the instance of the employer or the member.  His conclusion that Ms Downe had instigated the termination of her employment and that there was therefore no dismissal did not address the separate question of whether there was nonetheless a redundancy situation and, if so, whether the termination of her employment was wholly or mainly attributable to that situation.

Ms Downe's complaint was remitted to the Ombudsman for reconsideration.
 



Date Accessed: 03/12/2021