Pensions: Unfair dismissal - pension benefits are not unique says the Court of Appeal

In Roberts v Aegon UK Corporate Services Ltd the Employment Appeals Tribunal (EAT) was asked to confirm how pension loss should be treated where the dismissed employee was a member of the employer's final salary scheme. Ms Roberts was a member of such a scheme. Following her dismissal she secured alternative employment with a better overall remuneration package. However, her new employment only offered her membership in a money purchase scheme.

The Tribunal had determined that Ms Roberts' new employment brought to an end any ongoing loss of earnings claim. Nevertheless, there was ongoing pension loss because of the different type of pension provided.

The employer appealed to the EAT on the basis that the Tribunal should have taken the same view for pension loss as for the other loss of earnings. The EAT agreed with the Tribunal's approach, stating that the Tribunal was entitled to decide that the loss of final salary pension was a very significant factor. Consequently, Ms Roberts was entitled to compensation for loss of pension for as long as her employment with her former employer would have continued. The employer appealed to the Court of Appeal.

The Court of Appeal determined that a final salary pension benefit is not a unique benefit but an important part of the total remuneration package. Consequently, the EAT was not entitled to apply different tests to different aspects of the remuneration package.

The consequence of the court's finding in this case was that when Ms Roberts gained new employment elsewhere there was a break in the chain of causation which meant that she could no longer claim ongoing salary nor pension loss.

This will be welcome news for local authorities and other employers which offer final salary pension schemes to their staff.

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