Factual and Procedural Background
This appeal concerns the interpretation of the date on which the Normal Pension Ages ("NPAs") under an occupational pension scheme ("the Scheme") were equalised at 65 for both men and women, where previously women had an NPA of 60 and men 65. The principal employer under the Scheme, Company A, contended that equalisation occurred on 1 December 1991, the date notified to members by written announcement, and that a subsequent formal amendment by deed ("the 1996 Deed") was retrospectively effective from that date. The representative of members ("Appellee") argued that equalisation did not occur until 2 May 1996, the date of the formal deed amendment. The dispute raised three issues, including the effect of section 62 of the Pensions Act 1995, which came into force on 1 January 1996, on the timing and validity of equalisation.
Earlier, this court issued a first judgment addressing two of the three outstanding issues, concluding that the power to amend the Scheme required a deed, and referring a question to the Court of Justice of the European Union ("CJEU") regarding the retrospective amendment's compatibility with EU equal treatment law. The CJEU subsequently ruled that retrospective equalisation measures authorised only by national law and the trust deed, without objective justification, were prohibited.
The present judgment focuses on the third issue: whether section 62 of the Pensions Act 1995 closed the "Barber window"—the period during which EU law required levelling up of pension rights following the 1990 CJEU decision in Barber v Guardian Royal Exchange Assurance Group—and thus permitted levelling down from 1 January 1996 onwards under domestic law.
Legal Issues Presented
- Whether the power to amend the Scheme to equalise NPAs could be exercised by means other than a deed.
- Whether retrospective amendments to equalise NPAs were prohibited by Article 119 of the Treaty of Rome (now Article 157 TFEU) as a matter of EU law.
- Whether section 62 of the Pensions Act 1995, which came into force on 1 January 1996, closed the Barber window and thereby allowed domestic law to govern equalisation and levelling down from that date.
Arguments of the Parties
Appellant's Arguments (Company A)
- Section 62 gave domestic law effect to legally enforceable equalised benefits, implementing Article 119 and thereby closing the Barber window as of 1 January 1996.
- This implementation satisfied the legal enforceability and certainty requirements set out by the Advocate General and the CJEU in the Safeway CJEU judgment.
- The closure of the Barber window marks the transition from EU law remedies (levelling up) to domestic law remedies (levelling down), with section 62 marking this transition.
- The 1996 Deed was effective from 1 January 1996 to level down NPAs, notwithstanding the prior period where Article 119 prohibited levelling down.
Appellee's Arguments (Representative of Members)
- The Barber window was not closed by section 62 because CJEU jurisprudence requires that measures closing the window be adopted by the pension scheme itself, not merely by legislation.
- Legislation implementing Article 119 is insufficient to close the Barber window; only a measure taken by the Scheme, such as the 1996 Deed, qualifies.
- Section 62 cannot reduce rights below those afforded by Article 119 and thus cannot permit levelling down before the Scheme itself adopts such measures.
- Allowing section 62 to close the Barber window would circumvent EU law protections and undermine legal certainty and immediate elimination of discrimination.
- The statutory power of amendment under section 65(3) of the Pensions Act 1995 indicates that further action by the Scheme itself is necessary to implement equality fully.
Trustee's Position
- The Trustee took a neutral position on the outcome of the third issue.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Barber v Guardian Royal Exchange Assurance Group (C-262/88) [1991] 1 QB 344 |
Established the "Barber window" concept; direct effect of Article 119 prohibits sex discrimination in pension NPAs from 17 May 1990 onwards. |
Defined the start of the period requiring levelling up of pension rights and the temporal limits on retroactivity of EU equal treatment law. |
| State of the Netherlands v Federatie Nederlandse Vakbeweging (C-71/85) [1987] 3 CMLR 767 |
EU law applies directly during periods of non-compliance by member states; levelling up applies until domestic law compliance. |
Supported the transitional regime of levelling up before domestic law implementation. |
| Kowalska v Freie und Hansestadt Hamburg (C-33/89) [1992] ICR 29 |
Indirect discrimination under Article 119 must be remedied by equal treatment in collective agreements. |
Confirmed that, absent correct national implementation, EU law requires levelling up as the valid reference. |
| Helga Nimz v Freie und Hansestadt Hamburg (C-184/89) [1992] 3 CMLR 699 |
Reaffirmed the requirement to apply equal treatment immediately, setting aside discriminatory national provisions. |
Supported the immediate effect of EU equal treatment rights before national law compliance. |
| Coloroll Pension Trustees Ltd v Russell (C-200/91) [1995] ICR 179 |
National courts must set aside discriminatory provisions and apply equal treatment until national law is compliant. |
Clarified the obligation to grant disadvantaged class the same advantages as the favoured class pending domestic implementation. |
| Van den Akker v Shell (C-28/93) [1994] ECR I-4527 |
Confirmed principles of equal treatment and transitional levelling up. |
Reinforced the transitional nature of EU law enforcement pending domestic compliance. |
| Smith v Avdel Systems Ltd (C-408/92) [1995] ICR 596 |
Confirmed immediate and full application of Article 119 once discrimination is found. |
Supported the principle that measures to end discrimination cannot be subject to conditions maintaining discrimination. |
| Safeway Limited v Andrew Newton and Safeway Pension Trustees Limited (C-171/18) [2020] 1 CMLR 1321 |
Retrospective equalisation measures without objective justification prohibited; defined criteria for closing Barber window. |
Set the legal test for closure of the Barber window: measures must be immediate, full, unconditional, and legally certain. |
| Foster Wheeler Ltd v Hanley and others [2009] PLR 39 |
Interpretation that statutory provisions modifying scheme rules conform with Article 119. |
Supported the view that statutory intervention can effectively amend the Scheme to comply with EU law. |
| Hofmann v Barmer Ersatzkasse (Case 184/83) [1985] ICR 731 |
Member states enjoy discretion in social protection measures within EU law framework. |
Supported the principle that domestic law can regulate benefit levels post-equalisation. |
| Commission of the European Communities v Kingdom of Belgium (C-229/89) [1991] ECR 1-2205 |
Member states retain powers to define social policy measures in compliance with EU law. |
Confirmed domestic discretion in implementing equal treatment measures. |
| Molenbroek v Bestuur van de Sociale Verzekeringsbank (C-226/91) [1992] ECR 1-5943 |
Confirmed member state discretion in social security measures consistent with EU law. |
Reinforced domestic law's role post-equalisation. |
| Aventis Pasteur SA v OB (C-358/08) [2010] 2 CMLR 16 |
Legal certainty requires measures implementing EU rights to be sufficiently precise, clear and foreseeable. |
Applied to reject non-binding practices as measures closing the Barber window. |
| Euro Park Service v Ministre des Finances et des Comptes publics (C-14/16) [2017] 3 CMLR 17 |
Confirmed requirements of legal certainty and binding effect for measures implementing EU rights. |
Supported the test for closing the Barber window. |
Court's Reasoning and Analysis
The court analysed the effect of section 62 of the Pensions Act 1995 in the context of the EU equal treatment principle under Article 119. It considered whether section 62 constituted a measure sufficient to close the Barber window, i.e., to end the transitional period requiring levelling up and permit levelling down under domestic law.
The court rejected the argument that only measures adopted by the pension scheme itself could close the Barber window. It reasoned that a domestic enactment expressly imposing an equal treatment rule, such as section 62, which deems schemes to include such a rule, effectively amends the Scheme for compliance with EU law. This statutory modification has the same effect as a textual amendment by the Scheme itself.
The court emphasised that section 62 goes beyond Article 119 by requiring discriminatory terms to be modified so that they do not treat one sex less favourably, thus mandating levelling up. The measure under section 62 is immediate, full, unconditional, and legally certain, fulfilling the CJEU's criteria for closing the Barber window.
The court further held that section 62 does not undermine EU law protections during the Barber window; rather, it implements Article 119 rights domestically, allowing the transition to Period 3 where levelling down is permitted. The statutory power of amendment under section 65(3), allowing Scheme amendments, was viewed as facilitating administrative conformity rather than indicating a lack of enforceable rights prior to such amendments.
In conclusion, the court found that section 62 satisfied the legal test for closing the Barber window, thereby allowing domestic law to apply from 1 January 1996.
Holding and Implications
The court allowed the appeal and held that the Barber window was closed with effect from 1 January 1996 by operation of section 62 of the Pensions Act 1995.
This decision means that from 1 January 1996 onwards, domestic law governs the equalisation of NPAs, permitting levelling down of pension ages under the Scheme. The implication is that the Scheme's amendment by deed in 1996 was effective from that date, notwithstanding the earlier period where EU law required levelling up. No new precedent beyond the direct effect on the parties was established.