Factual and Procedural Background
This opinion concerns an application for judicial review of the decision by the Defendant Minister on 8 November 2016 to amend the Civil Service Compensation Scheme ("CSCS") via a scheme made under section 1 of the Superannuation Act 1972. These 2016 amendments reduced certain benefits payable to civil servants on redundancy or early exit. The matter came before the court initially on a "rolled up" basis for permission and substantive hearing, with permission granted at the outset and the hearing proceeding fully.
The 2016 amendments followed earlier reforms to the CSCS, notably those introduced in 2010, which had been subject to prior legal challenges. The first claimant trade union ("the PCSU") is the largest civil service trade union, representing primarily lower-paid civil servants, and the second and third claimants are civil servants and PCSU members.
The claimants challenged the 2016 amendments on four grounds: inadequate consultation with the PCSU in breach of statutory duties under the 1972 Act; wrongful exclusion of the PCSU from consultation breaching Article 11 of the European Convention on Human Rights ("ECHR"); violation of civil servants' property rights under Article 1 of Protocol 1 to the ECHR ("A1P1"); and breach of the public sector equality duty under section 149 of the Equality Act 2010 regarding impacts on disabled civil servants.
The procedural history includes extensive consultation processes, divided into two rounds of discussions between the Minister and trade unions. The PCSU was excluded from the second round after refusing to provide a commitment sought by the Minister’s representatives. The Minister proceeded to make the 2016 amendments after obtaining agreement from a sufficient number of other unions and laid a report before Parliament pursuant to statutory requirements.
Legal Issues Presented
- Whether the Defendant Minister breached the statutory duty to consult the PCSU with a view to reaching agreement under sections 1(3) and 2(3D) of the Superannuation Act 1972 in relation to the 2016 amendments to the CSCS.
- Whether the exclusion of the PCSU from the second round of consultation breached the rights of the PCSU and its members under Article 11 of the ECHR.
- Whether the 2016 amendments interfered unlawfully with civil servants’ possessions under Article 1 of Protocol 1 to the ECHR, and if so, whether such interference was objectively justified.
- Whether the Defendant Minister complied with the public sector equality duty under section 149 of the Equality Act 2010 when making the 2016 amendments, particularly in relation to disabled civil servants.
- Whether relief should be refused under section 31(2A) of the Senior Courts Act 1981 on the basis that the outcome would not have been substantially different if the statutory consultation duties had been observed.
Arguments of the Parties
Claimants' Arguments
- The Defendant Minister failed to adequately consult the PCSU on the final terms of the 2016 amendments, breaching the statutory consultation duty under the 1972 Act.
- The exclusion of the PCSU from the second round of discussions violated their Article 11 rights to freedom of association and collective bargaining.
- The 2016 amendments unlawfully interfered with the civil servants’ legitimate expectations and property rights under A1P1.
- The Minister failed to properly consider the impact of changes to inefficiency payments on disabled civil servants, breaching the public sector equality duty.
- The assurances made in 2010 about the long-term sustainability of the CSCS amendments created a legitimate expectation that further detrimental changes would not be made, rendering the 2016 amendments irrational.
Defendant Minister's Arguments
- The Minister complied with the statutory duty to consult by engaging in extensive discussions with trade unions during the first round and by requiring a commitment to engage on the basis of the Minister’s proposals in the second round.
- The exclusion of the PCSU from the second round was lawful due to their refusal to provide the requested commitment, and there was no breach of Article 11 rights.
- The 2016 amendments were objectively justified under A1P1 as necessary to reduce the public spending deficit and strike a fair balance between civil servants and the public interest.
- The Minister complied with the public sector equality duty by considering equality impacts in the 2014 Equality Analysis and justifying the changes accordingly.
- Even if a breach of consultation occurred, relief should be refused under section 31(2A) of the Senior Courts Act 1981 because it was highly likely that the outcome would not have been substantially different.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| R (Public and Commercial Services Union) v Minister for the Civil Service [2010] EWHC 1027 (Admin) ("PCSU (No. 1)") |
Right of trade unions to veto changes to CSCS under section 2(3) of the 1972 Act pre-2010 amendments. |
Confirmed previous union veto right which was removed by legislative amendment in 2010, providing context for current consultation duty. |
| R (Public and Commercial Services Union) v Minister for the Civil Service [2011] EWHC 2014 (Admin) ("PCSU (No. 2)") |
Whether reductions in CSCS benefits constituted justified interference with property rights under A1P1. |
Held that reductions were objectively justified in public interest; applied to 2016 amendments analogously. |
| Bronowski v Poland (2005) 43 EHRR 1 |
Definition and protection of "possessions" under Article 1 of Protocol 1 to the ECHR. |
Supported conclusion that CSCS entitlements constitute "possessions" for A1P1 purposes. |
| Kopecky v Slovakia (2004) 41 EHRR 944, GC |
Legitimate expectation as an autonomous concept under A1P1. |
Guided court’s assessment of whether CSCS entitlements qualified as possessions and legitimate expectations. |
| Stretch v United Kingdom (2003) 38 EHRR 196 |
Relationship between legitimate expectation in domestic law and under the ECHR. |
Supported view that consistent administrative practice can create legitimate expectation enforceable domestically. |
| Bracking v Secretary of State for Work and Pensions [2013] EWCA Civ 1345 |
Interpretation of public sector equality duty under section 149 of the Equality Act 2010. |
Clarified that due regard need not be evidenced in a single document but must be considered. |
| Simplex GE Holdings Ltd v Secretary of State for the Environment [1988] 3 PLR 25 |
Threshold for refusal of relief in judicial review for unlawful conduct. |
Referenced in relation to the statutory test under section 31(2A) of the Senior Courts Act 1981. |
| IBM United Kingdom Holdings Limited v Dalgleish [2014] EWHC 980 (Ch) |
Legitimate expectation and rationality in changes to private sector pension schemes. |
Rejected as inapposite due to different context (private sector vs. public economic policy). |
| The Pharmacists Defence Association Union v Boots Management Services Limited [2017] EWCA Civ 66 |
Interpretation of Article 11 ECHR rights in trade union contexts. |
Not applied due to sufficiency of statutory interpretation without recourse to Article 11 in this case. |
Court's Reasoning and Analysis
The court analysed the statutory consultation duties under sections 1(3) and 2(3D) of the 1972 Act and concluded that the duty required consultation "with a view to reaching agreement" on the specific terms of the scheme ultimately made. The Minister’s exclusion of the PCSU from the second round of discussions, where the scheme’s terms were materially altered, breached this duty. The Minister was not entitled to impose additional preconditions for participation beyond the statutory requirements.
The court rejected the Minister’s submission that the consultation ended on 4 May 2016, emphasizing that revised proposals required renewed consultation with the PCSU. The consultation duty was a strong safeguard preventing unilateral detrimental changes without genuine attempts at agreement.
Regarding Article 11 ECHR, the court found it unnecessary to address this ground because the claimants succeeded on statutory interpretation grounds alone.
On Article 1 of Protocol 1, the court found that civil servants’ entitlements under the CSCS constitute "possessions" protected by the ECHR, based on consistent administrative practice and legitimate expectations. However, the interference caused by the 2016 amendments was objectively justified as a proportionate measure to advance the public interest of reducing the budget deficit, consistent with prior case law.
The court dismissed the claim that prior assurances from 2010 created a binding legitimate expectation preventing further changes, finding those assurances were not unequivocal and did not preclude reassessment of public financial needs.
On the public sector equality duty, the court held that the Minister complied by having due regard to disabled persons’ interests via the 2014 Equality Analysis and justifying the impact of the changes, despite the absence of a new equality analysis in 2016.
Finally, the court considered whether relief should be refused under section 31(2A) of the Senior Courts Act 1981 on the basis that the outcome would not have been different had the PCSU been consulted. The court rejected this argument, finding the evidence speculative and incomplete, and noting the importance of the PCSU’s participation in a negotiation involving multiple unions with varying interests. The Minister’s failure to consult deprived the PCSU of a meaningful opportunity to influence the outcome, which could have been materially different.
Holding and Implications
The court held that the Defendant Minister breached the statutory consultation duty under the Superannuation Act 1972 by excluding the PCSU from the second round of consultation on the 2016 amendments to the CSCS. The court dismissed the other grounds of challenge, including those based on Article 11 ECHR, Article 1 of Protocol 1 ECHR, and the public sector equality duty.
The court further held that relief should not be refused under section 31(2A) of the Senior Courts Act 1981, as it was not highly likely that the outcome would have been substantially the same if the PCSU had been properly consulted.
The direct effect of this decision is to uphold the claimants’ challenge on statutory consultation grounds and to invite the parties to agree the form of relief. If agreement cannot be reached, the court will determine relief in due course. The decision does not set new precedent on the broader issues of human rights or equality duties but reinforces the stringent consultation requirements imposed by the 1972 Act in the context of amendments reducing compensation benefits for civil servants.