BECTU Responds To High Court Decision On BBC Pensions Case

Today's decision in the High Court on a challenge from an MU member into whether the BBC was entitled in law to limit increases in pensionable pay to 1 per cent a year will be of interest to all BBC staff and to the pensions industry as a whole.
The High Court judge found, in response to the action supported by the NUJ and the MU, that the BBC was entitled to make the changes. The proposals were the subject of lengthy negotiations with the joint unions during 2010.
However the decision accepts that MU member, John Bradbury, can seek a ruling from the Pensions Ombudsman into the consultations entered into by the BBC.
BECTU, not a party to the action in the High Court, sought comment from its legal advisers on today's decision.
Thompsons' Solicitors provided the following statement for members after discussions with Andrew Short QC:
Members will probably have seen media coverage of the High Court ruling about the BBC’s pensions changes. The court ruled that an agreement by BBC staff to accept a pay rise knowing that only 1% of that rise counted towards their pension could not be overturned. As you probably remember, BECTU balloted you on this pay rise and you voted to accept it on those terms. Our advice from Andrew Short QC was that the decision was lawful.
The ruling was [on] an appeal brought by John Bradbury against a Pensions Ombudsman decision that the BBC could make the changes. The decision means that, for now, there is no requirement for the BBC to reverse any of its changes to pensions schemes.
Although section 91 of the Pensions Act 1995 prevents members of pensions schemes from surrendering pension rights, Mr Justice Warren said that pension scheme members who accepted a salary increase knowing that only part of it would be pensionable were not surrendering anything. He said members will still get a bigger pension than they would have done, just less than if all of the pay rise counted towards the pension.
Mr Bradbury argued that the way the changes had been made – by denying those who refused to accept the 1% cap on pensionable pay any pay raise [sic] at all – breached the duty of good faith implied in BBC employees’ contracts. The judge said that this point was raised too late in the appeal for him to make any ruling on it. He did say that it was possible Mr Bradbury could raise it in the future. He did not decide if Mr Bradbury had to raise this with the Pensions Ombudsman or whether this should be sent directly to the Ombudsman to decide. However, he did say that the chances of a successful challenge to the BBC’s decision on this basis were “severely limited”. He suggested that the BBC and Mr Bradbury try to reach a compromise on this, but if this was not possible he would make a final ruling.
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