Ministry of Justice & Anor v Merry, Court of Appeal - Civil Division, November 07, 2018, [2018] EWCA Civ 2461

Resolution Date:November 07, 2018
Issuing Organization:Civil Division
Actores:Ministry of Justice & Anor v Merry

Case No: A2/2016/3592

Neutral Citation Number: [2018] EWCA Civ 2461





Appeal No: A90MA415

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 07/11/2018





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Naomi Ling (instructed by Government Legal Department) for the Appellants

Scott Redpath (instructed by Linder Myers LLP) for the Respondent

Hearing date: 24 October 2018

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JudgmentLord Justice Sales:

  1. This is an appeal from the decision of HHJ Pearce (sitting as a Deputy Judge of the High Court) in relation to certain benefits claimed by the respondent, Mr Merry, in relation to his employment within Her Majesty's Court Service (``HMCS'') which terminated on 31 December 2008.

  2. The principal issue before the judge and before us is whether remuneration which Mr Merry received for working over weekends by arrangement with his employer for a period of many years, in addition to what he was paid in respect of his employment during the normal working week, qualified as ``pensionable earnings'' for the purposes of the relevant provisions of the Principal Civil Service Pension Scheme (``the PCSPS'') and the Civil Service Compensation Scheme (``the Compensation Scheme''). The judge held that on the true construction of the key provision in the PCSPS (which also governs the position under the Compensation Scheme) such additional remuneration did so qualify. The appellant submits that the judge erred in interpreting the PCSPS in this way.

  3. The effect of the judge's ruling was to increase the compensation payment due to Mr Merry under the Compensation Scheme upon the termination of his employment within the civil service (the civil service equivalent of a redundancy payment) and pension payments which would in due course be due to him under the PCSPS. The judge made an award of compensation in favour of Mr Merry in respect of the Compensation Scheme payment which should have been paid to him at the increased rate and granted declaratory relief in relation to the pension payments which would become due in the future.

    Legal framework

  4. Section 1 of the Superannuation Act 1972 confers a power on the Minister for the Civil Service to make, maintain and administer schemes for pensions. Although not made by statutory instrument, such a scheme has to be laid before Parliament before it comes into effect: section 2(11). The PCSPS is a scheme made in exercise of the power in section 1.

  5. It is common ground that Mr Merry's employment contract with HMCS included an entitlement for him to be a member of the PCSPS, subject to its terms and conditions from time to time in force.

  6. The part of the PCSPS under which Mr Merry is entitled to benefits is the 2002 Section of the PCSPS, which (as the name suggests) was issued in 2002. The definition of ``pensionable earnings'' which falls to be interpreted appears in paragraph A2 of that Section. So far as relevant, paragraph A2 provides:

    ``(1) In these rules `pensionable earnings', in relation to a person who is a member, means -

    (a) permanent pensionable earnings ...

    from the employment in which the person is a member.

    This is subject to paragraphs (4) and (6).

    (2) For this purpose `permanent pensionable earnings' means -

    (a) basic pay,

    (b) if or to the extent that the Minister has determined that they are to be treated as permanent pensionable earnings for the purposes of these rules, allowances granted on a permanent basis to persons in particular posts or kinds of employment, and

    (c) anything included by virtue of paragraph (4).


    (4) Anything which would not be regarded as pensionable earnings under paragraph (2)(a) or (b) or (3)(a) [which defines `fluctuating pensionable earnings'] is to be so regarded if -

    (a) it is expressly provided to the member on the basis that it is pensionable and was so provided before 1st October 2002, and

    (b) the Minister has agreed that it should be so regarded,


  7. As I have said, it is the definition of ``pensionable earnings'' in the PCSPS which is relevant for the calculation of the compensation payment due to Mr Merry under the Compensation Scheme.

    Factual background and the judgment below

  8. The relevant employment of Mr Merry commenced with the North and West Greater Manchester Magistrates' Courts Committee (``the Committee'') in 1997. That employment relationship came to be governed by a written contract of employment dated 1 April 1998. Under that contract Mr Merry was employed as an IT Manager within the Secretariat of the Committee. The contract set out his annual salary (clause 5.1); stated that ``Overtime is not payable'' (clause 5.4); and stipulated that his normal working week was one of 36.25 hours, worked Monday to Friday...

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