BA alleged the APS trustees did not have the power to award an increase, especially while the scheme was in deficit, had ignored advice and put pressure on advisers to change recommendations, and given "gratuitous" and "unearned" benefits. However, in his 164-page judgement, (published 19 May), Justice Morgan said the APS trustees had not made a "benevolent or compassionate payment", had not committed an abuse of power, and had regard "to all relevant considerations and to no irrelevant considerations". The judge ruled on both the trustees' decision to amend the scheme rules - using clause 18 which allowed rules to be amended "in any way" unilaterally - to grant themselves a unilateral power to award discretionary increases in 2011, and the eventual decision to give out a 0.2% increase in 2013. The judge agreed the deficit and BA's positions were factors that needed to be taken into account during a decision- making process, but said trustees had adequately considered these. He disagreed with BA that both actions had been conducted improperly or were not allowed, thereby allowing the 0.2% increase to go ahead.
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Calculating Strike Pay 26 May 2017
If teachers lawfully strike for one day, at what rate can the employer make a deduction of pay?
1/365 of annual pay, held the Supreme Court in Hartley v King Edward VI College .
The Supreme Court unanimously held that, unless contracts specifically state otherwise, any deduction of pay in relation to teachers taking lawful strike action must be at a rate of 1/365 of their annual pay, not 1/260 as the College had done. In arriving at its judgment, which overturned the Court of Appeal, the Supreme Court closely analysed the wording of the Apportionment Act 1870 which is intended to address the problems which arise in the context of periodic payments. The Act provides that salaries shall be "considered as accruing from day to day, and shall be apportionable in respect of time accordingly" The College had made a deduction at 1/260 relying on the fact there were 260 working days in a year. The Supreme Court considered the evidence from the teachers that demonstrated that their work was not limited to time teaching and they regularly performed their duties during evening, weekends and/or days of annual leave. Accordingly it was appropriate to have a deduction of 1/365.
This is a fact specific decision applicable to teachers, however the principle may be applicable to other employees whose days of work are not ascertainable.
With thanks to Daniel Barnett’s employment law bulletin for providing this update.
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BA to appeal High Court ruling on discretionary increases 26 May 2017
British Airways (BA) will appeal a High Court decision which allowed trustees of one of its defined benefit (DB) schemes to grant a 0.2% increase to pensioners.
BA recently lost a landmark trial to block its pension trustees' decision to award a discretionary increase in 2013 following a seven week court battle. Trustees of the Airways Pension Scheme (APS) successfully defended the payment from BA's arguments that the trustees had acted improperly, had acted outside of their powers, and had taken irrelevant considerations into account.
Professional Pensions has now reported that the High Court granted BA permission to apply to appeal to the Court of Appeal, a move that could extend the litigation for at least eighteen months.
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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