These two test cases related to the transitional provisions established as part of changes to public sector pensions introduced after the 2011 Hutton Report. Sergeant related to the Firefighters’ Pension Scheme, whilst a second case of McCloud related to the Judicial Pensions Scheme.

The basis of the appellants’ argument concerned provisions allowing older workers tapered protection, whereas younger workers were transferred to the new pension schemes without any transition period.

The EAT in both cases upheld the ET findings that that the transitional provisions pursued legitimate aims. This related to the Government’s aim of seeking to protect those closest to the standard pension age considering the legitimate expectation that their pension entitlement would not change significantly when they were close to retirement.

While in Sargeant the EAT held that the ET had erred on the question of proportionality, the claimants in McCloud saw their appeal upheld. The EAT endorsed the lower finding that the extreme discriminatory effect of the transitional provisions on the claimants outweighed the Government's aims. The age discrimination which followed could therefore not be justified. In Sargeant the question of proportionality was remitted while the appeal in McCloud was dismissed.

Practical Lessons

Considering the limited basis upon which the appeal in Sargeant was successful, the McCloud decision is more noteworthy. The EAT held that there was no fault in the ET’s finding that the Government’s pursuit of social policy objectives was far outweighed by the discriminatory effect of the pension provisions.

What is interesting about McCloud is that the respondent accepted that pension changes for judges were particularly detrimental as their pensions tend to be much higher as a proportion of overall remuneration compared to other public service workers.
But the significance of this decision will go beyond judicial pensions and will surely have consequences across the public sector with other groups taking note of the Government’s loss. Teachers, the police and other public workers have endured similar changes to their pensions and arguments relating to the legitimate aim of the respective schemes will now surely be considered.

Sargeant:
http://www.bailii.org/uk/cases/UKEAT/2018/0116_17_2901.html
 
McCloud:
http://www.bailii.org/uk/cases/UKEAT/2018/0071_17_2901.html

Further UKEAT decision 2021:
https://www.legal-island.com/articles/uk/case-law/2021/feb/london-fire-commissioners--others-v-sargeant--others-2021-ukeat01371202/