A dispute over whether a university employee was entitled to her full pension has been sent back to the Pensions Ombudsman after the High Court disagreed with the initial decision.
In a judgment published on September 13, deputy High Court judge Adam Johnson found the ombudsman had taken too narrow an interpretation of the issue of redundancy in its original decision, and should therefore reconsider the case.
University employee Gail Downe had appealed a determination from the Pensions Ombudsman, published in July 2018, as she believed the conclusion that she was not entitled to the full pension payments was “wrong”.
Full pension entitlement
The court heard how Ms Downe is a member of the Universities Superannuation Scheme, and until November 2012 was employed by the Society of College, National and University Libraries.
However, her employment was terminated on terms that were recorded in a compromise agreement.
Ms Downe’s appeal centred on whether the termination of her employment was “by reason of redundancy”, as under the USS scheme rules this would entitle her to a full pension from the date on which her employment terminated.
The ombudsman did not properly or sufficiently address the test for redundancy
Adam Johnson, deputy High Court judge
But the ombudsman concluded that the rule was not satisfied and therefore she was not entitled to a full pension.
The High Court judgment explained how Ms Downe had a poor working relationship with her manager, and how eventually the team she was part of was restructured.
As a result, her lawyer contacted human resources on her behalf to discuss possible severance terms.
The redundancy agreement
Severance terms were negotiated and a compromise agreement was entered into on November 30 2012, in which the employer agreed to make a payment to Ms Downe “without admission of liability”, part of which was non-taxable and was described as “enhanced redundancy pay”.
In January 2013, Ms Downe attempted to apply for a full pension under the USS scheme rules and asked her former employer to confirm that the reason for the compromise agreement was redundancy.
However, a HR representative at the Society of College, National and University Libraries declined to do so.
Ms Downe’s argument to the ombudsman was that the word redundancy had been used in the severance negotiations and was also referred to in other documents, such as the compromise agreement.
But her employer’s position was that the employment had been terminated by mutual consent.
Ombudsman dismisses complaint
The ombudsman sided with the employer, stating that the rules on the pension scheme had not been satisfied as Ms Downe had willingly contacted the employer to set up a compromise agreement.
Judge Johnson partly upheld Ms Downe’s appeal, but said the High Court was not able to address the matter. He proposed that the complaint should be remitted to the ombudsman to address the issues raised.
He said: “My conclusion is that the ombudsman’s analysis had a misplaced emphasis on the question of whether the termination of Ms Downe’s employment arose at the insistence of the Society of College, National and University Libraries, and that in consequence the ombudsman did not properly or sufficiently address the test for redundancy in USS rule 1.1.
“For all the reasons given above, I would allow Ms Downe’s appeal to the extent I have identified, and remit her complaint to the ombudsman.”
