Written Question · S2W-24591 · Session 2
In light of the written ministerial statement by the UK Parliamentary Under-Secretary of State for Trade and Industry on the statutory redu…
The question
To ask the Scottish Executive, in light of the written ministerial statement by the UK Parliamentary Under-Secretary of State for Trade and Industry on the statutory redundancy payments scheme (Official Report, House of Commons, 2 March 2006, Vol 443, c 39WS) which states that the EU Employment Directive “provides for the possibility of Member States providing for different treatment on the grounds of age, where this difference of treatment is objectively and reasonably justified by a legitimate aim, including employment policy”, whether it will give any further consideration to whether the local government pension scheme rule of 85 should be abolished on the grounds of age discrimination and whether it it will now publish the legal advice it has received on the matter in order that it can be compared to legal advice received by the Parliamentary Under-Secretary of State.
The answer
I refer the member to the answer to question S2W-21675 on 17 January 2006. All answers to writtenparliamentary questions are available on the Parliament’s website, the search facilityfor which can be found at http://www.scottish.parliament.uk/webapp/wa.search.
The rationale for having to removethe rule of 85 to be consistent with Directive 2000/78/EC is that the purpose of the Directive is to set out a general framework for equal treatment, including combatingdiscrimination on age grounds in employment and occupation. The rule of 85 in theLocal Government Pension Scheme for Scotland clearly discriminates on age grounds because two memberswith the same length of service but different ages who retire on the same day areaffected differently. Depending on their age, one would receive an unreduced pension(as they satisfy the rule), whilst the other would not. This therefore amounts toless favourable treatment on the grounds of age.
Article 6.1 of the Directiveallows for differences of treatment on age grounds in some circumstances where amember state can establish that the differences are objectively and reasonably justifiedby a legitimate aim, and the means it chooses to achieve that aim are proportionate.Hence, in order for the rule of 85 (which is considered to be discriminatory onage grounds) to be allowed to continue beyond the Directive’s deadline, it mustbe an objectively justifiable means of meeting a legitimate aim. No such legitimateaim has so far been identified that would be consistent with the Directive.
In addition, the Directive providesthat age discrimination in relation to pensions may be allowed to continue underArticle 6.2 in specific, narrow circumstances. However, the Executive does not considerthat the rule of 85 falls within the terms of Article 6.2. The rule is not a provisionfor fixing the age of entitlement to retirement benefits nor is it an actuarialcalculation. It also has a disparate impact on the grounds of sex (as proportionatelymore males would qualify under the rule than females, who tend to have shorter service).Article 6.2 cannot be used to continue an age discriminatory provision which alsodiscriminates on grounds of sex. The rule therefore cannot be retained under thisarticle of the Directive.
Member states are obliged toimplement the requirements of the Directive before December 2006 and the UK Government’spolicy is to implement them by October 2006 by means of Great Britain Regulations.Following a period of statutory consultation the Department of Trade and Industryhas laid draft Regulations before the Westminster Parliament. If approved they willcommence on 1 October 2006. In order to comply with the law, therefore, and followingthe same approach as DTI the rule of 85 will have to be removed from the Local GovernmentPension Regulations to coincide with that date.
The rationale for having to removethe rule of 85 to be consistent with Directive 2000/78/EC is that the purpose of the Directive is to set out a general framework for equal treatment, including combatingdiscrimination on age grounds in employment and occupation. The rule of 85 in theLocal Government Pension Scheme for Scotland clearly discriminates on age grounds because two memberswith the same length of service but different ages who retire on the same day areaffected differently. Depending on their age, one would receive an unreduced pension(as they satisfy the rule), whilst the other would not. This therefore amounts toless favourable treatment on the grounds of age.
Article 6.1 of the Directiveallows for differences of treatment on age grounds in some circumstances where amember state can establish that the differences are objectively and reasonably justifiedby a legitimate aim, and the means it chooses to achieve that aim are proportionate.Hence, in order for the rule of 85 (which is considered to be discriminatory onage grounds) to be allowed to continue beyond the Directive’s deadline, it mustbe an objectively justifiable means of meeting a legitimate aim. No such legitimateaim has so far been identified that would be consistent with the Directive.
In addition, the Directive providesthat age discrimination in relation to pensions may be allowed to continue underArticle 6.2 in specific, narrow circumstances. However, the Executive does not considerthat the rule of 85 falls within the terms of Article 6.2. The rule is not a provisionfor fixing the age of entitlement to retirement benefits nor is it an actuarialcalculation. It also has a disparate impact on the grounds of sex (as proportionatelymore males would qualify under the rule than females, who tend to have shorter service).Article 6.2 cannot be used to continue an age discriminatory provision which alsodiscriminates on grounds of sex. The rule therefore cannot be retained under thisarticle of the Directive.
Member states are obliged toimplement the requirements of the Directive before December 2006 and the UK Government’spolicy is to implement them by October 2006 by means of Great Britain Regulations.Following a period of statutory consultation the Department of Trade and Industryhas laid draft Regulations before the Westminster Parliament. If approved they willcommence on 1 October 2006. In order to comply with the law, therefore, and followingthe same approach as DTI the rule of 85 will have to be removed from the Local GovernmentPension Regulations to coincide with that date.
In the Official Report
No contribution in the Official Report cites S2W-24591 by reference.