Safeway Ltd v Newton & Anor

This is another case concerning the equalisation of pension benefits for men and women. It relates to the Safeway Pension Scheme (“the Scheme”) of which the Second Defendant (“SPTL”) is the sole trustee. The question before me is whether the normal pension age (“NPA”) of men and women was equalised at age 65 with effect from 1 December 1991 or only from 2 May 1996. A very large sum of money turns on the answer to that question. The Claimant (“Safeway”) is a subsidiary of WM Morrison Supermarkets plc and the principal sponsoring employer with an interest in arguing that the NPA for men and women was equalised with effect from 1 December 1991. The First Defendant (“Mr Newton”) is an active member of the Scheme who is acting in a representative capacity for all those with an interest in arguing that NPAs were not equalised until 2 May 1996.

The issues arise as the result of a written announcement to members dated 1 September 1991 (“the 1991 Announcement”), its content being repeated in a letter dated 1 December 1991 (“the 1991 Letter”) (together “the1991 Notices”). The 1991 Announcement and the 1991 Letter announced the introduction of an equal NPA of 65 for men and women with effect from 1 December 1991. Formal recognition in the Scheme documentation of the common NPA is to be found in the subsequent definitive trust deed (consolidating amendments since the previous definitive trust deed) dated 2 May 1996 (“the 1996 Deed”).

The issue is whether the 1991 Announcement and the 1991 Letter were effective to introduce a common NPA of 65 so as to satisfy the requirements of EU law in respect of service from 1 December 1991. Safeway contends that it was effective to do so with the result that the NPA for men and women in respect of all of their service from that date was equalised at age 65. Mr Newton contends that the 1991 Announcement and the 1991 Letter were not effective for that purpose with the result that NPA for men and women in relation to service between 1 December 1991 and 2 May 1996 was age 60, the benefit of the disadvantaged class (men) for that period being increased to that of the advantaged class (women) for that period.

There are two main issues:

The Scheme is a conventional balance of cost scheme providing final salary benefits. The Third Schedule to the Definitive Trust Deed and Rules dated 1 April 1984 (“the 1984 Deed”) contained the Rules of the Scheme. Rule 2 contained a number of definitions including a definition of “Normal Pension Age” which for women was age 60 and for men was age 65.

Rule 23 gave the Principal Company power by written notice to the Trustees to augment the benefits conferred by the Rules either in respect of all beneficiaries or in respect of any beneficiary or class of beneficiaries.

By a deed of amendment dated 23 March 1987, a new Rule 35 was inserted. This required the Trustees from time to time and at least once every three years to carry out a review of pensions in payment (or contingently payable to spouses and dependants). They then had a discretion, after consulting the Scheme actuary and with the consent of the Principal Employer, to increase such pensions.

The Scheme contained a power of amendment. It was to be found in Clause 19 . At all material times, it provided as follows:

“The Principal Company may at any time and from time to time with the consent of the Trustees by Supplemental Deed executed by the Principal Company and the Trustees alter or add to any of the trusts powers and provisions of the Scheme including this Trust Deed and the Rules and all Deeds and other instruments in writing supplemental to this Trust Deed and the Deeds specified in the Second Schedule hereto and may exercise such powers so as to take effect from a date specified in the Supplemental Deed which may be the date of such Deed or the date of any prior written announcement to Members of the alteration or addition or a date occurring at any reasonable time previous or subsequent to the date of such Deed so as to give the amendment or addition retrospective or future effect as the case may be.”

The 1996 Deed was a consolidating and amending deed wholly superseding the previous Definitive Trust Deed and Rules. It took effect from 26 April 1988, defined as the Revision Date. It is unnecessary to comment on its detail. I need only note that it contains a definition of “Normal Pension Age” which included the following:

“(1)

as regards all Members except a 1973 Plan Member from the Revision Date until 30^th November 1991, the last day of the month on which the Member attains the age of 65 years if male or 60 years if female and,

(2)

as regards all Members from 1st December 1991 except a 1973 Plan Member or those who are already Pensioners, Deferred Pensioners or Postponed Pensioners at that date, the date on which the Member attains the age of 65 years;”

Nothing turns, for present purposes, on the exceptions referred to in (1) or (2). However, EU law required benefits in respect of service from 17 May 1990 until 30 November 1991 to be equal so that NPA for men in respect of service during that period was, notwithstanding (1), 60 not 65. One reading of (2) is that an NPA of 65 was adopted in relation to all service where the Member remained in service after 1 December 1991. In practice, however, the Scheme is administered on the basis that an NPA of age 60 applies to benefits accrued between 17 May 1990 and 1 December 1991.

The catalyst for the change in NPA was, of course, the decision of the ECJ (now the CJEU: I will refer to it in this judgment as the ECJ) in Barber v Guardian Royal Exchange Assurance Group (Case C-262/88) [1991] 1 QB 344 [1990] ICR 616 (“Barber”).

The response of Safeway and SPTL to Barberis described in the witness statement of John Kinch. He was, throughout the relevant period, (i) the Company Secretary of Safeway (previously called Safeway plc and before that Argyll Group plc) (ii) a director and Company Secretary of the company now known as Safeway Stores Ltd which was and is the principal operating company in the group and (iii) a director and the secretary of SPTL. The key events which he identifies, and about which there is no dispute, are these:

The 1991 Announcement was headed “Change to your Scheme Benefits”. It explained immediately after that heading that the announcement:

“brings you advance news of two significant changes to [the Scheme] which [Safeway and SPTL] intend to introduce with effect from 1^st December 1991.”

The second of the changes was:

“A common Normal Pension Age for men and women of 65 – treating men and women differently in employment practices has long been outlawed. Surprisingly, in the pensions arena it has been possible to allow different treatment, especially with regard to pension ages. A recent case in the European Court is set to change all that. See right.”

There then appears to the right a note about Barber. Although it was still uncertain what impact the decision would have, it was explained that Safeway and SPTL:

“have decided that it is right to act now to equalise Normal Pension Age. They are continuing to monitor the situation and will make any further changes which may be required as a result of clarification of the effects of the judgment.”

Further detail was given on the second page of the 1991 Announcement. The heading explained that SPTL had decided to set the single NPA for men and women at age 65. Under a section headed “Options for an early retirement, available to all”, the following was to be found:

“Of course, not everyone wants to work up to 65: you may already be dreaming about your retirement at age 60…. So your initial reaction to the change in Normal Pension Age may be one of gloom! However, in keeping with the current practice for male members with a Normal Pension Age of 65, the pension earned for service up to your early retirement will not be reduced for early payment if you retire from service between ages 60 and 65. You will need Company consent and, so that if the Company is more able to comply with your wishes, you must give at least 3 months’ irrevocable notice in writing….”

The 1991 Announcement was signed “J.P. Kinch, Secretary”. Mr Kinch’s evidence, for what it is worth, is to the effect that “Secretary” was a designation which he would use to reflect his position within both Safeway and SPTL: he would have used the designation “Company Secretary” if he had been acting solely for Safeway. Looking back, he thinks that:

“ whilst the announcement was primarily a communication from the Group to its employees, it [the 1991 Announcement] was very much a joint statement with the Trustee which had approved the announcement at its meeting on 29 July 1991. I certainly have no doubt that I had the authority of both the Trustee and the Principal Company to make this announcement or, to put it another way, I am absolutely confident that I would not have sent this announcement out without the clear authority and approval of both the Principal Company and the Trustee.”

In my view, the 1991 Announcement is properly to be seen as coming from both Safeway and SPTL. If and to the extent that an announcement within the meaning of Clause 19 was required to be one which was made with the consent of SPTL, I am satisfied that the 1991 Announcement was made with that consent. I do not, in any case, understand Mr Short to contend otherwise.

In italics and in smaller type-face than the body of the document, there appears at the foot of the page the following rubric:

“It is emphasised that the Trust Deed and Rules are the legal basis of the Safeway Pension and Family Benefits Scheme, and that this announcement is intended only for the purposes of general guidance and information. You should note that the changes described in the leaflet represent an alteration to your Terms and Conditions of employment.”

The 1991 Letter was issued on behalf of a number of companies in the group. It was signed by Mr Kinch for and on behalf of those companies. Safeway itself was included in that number, but SPTL was not. It is a short letter and I set it out in full:

“This letter is addressed to those employees of the companies listed above who are members or eligible to become members of the Safeway Pension and Family Benefits Scheme (“the Scheme”). The purpose of this letter is to formally confirm that the changes to pension benefits under the Scheme described in the announcement dated 1^st September 1991 have been made with effect from 1^st December 1991. All such employees should note therefore, that their terms and conditions of employment have been amended from today on the basis outlined in the September announcement.”

Copies of that letter were provided to managers to distribute to employees. The covering memorandum asked managers to arrange for each employee to receive a copy of the letter on 2 December 1991 or as soon as possible thereafter. It is accepted that I should proceed on the basis that the 1991 Letter was effectively provided to each employee with effect from 1 December 1991. No point is being taken by Mr Newton in relation to:

Mr Newton, of course, is a party to these proceedings in a representative capacity and Mr Newton’s neutrality on those two aspects is subject to the Court making a direction that submissions on this point should be made on his behalf. I did not make at the hearing and do not propose to make now any such direction. Even in litigation involving as much money as this litigation does, there still needs to be proportionality about the conduct of the litigation and about what points can sensibly be ignored. In my view it is appropriate to proceed (i) on the basis that the 1991 Announcement and the 1991 Letter between them constituted an announcement for the purposes of Clause 19 even if the 1991 Letter was not in fact received by some Members and (ii) on the basis that the 1991 Letter was issued on the date which it bears.

Since 1 December 1991, the Scheme has been operated on the footing that NPA was effectively equalised at age 65 on that date. That is the clear evidence of Mr Kinch who is in a strong position to know. As he says in paragraph 77 of his witness statement dated 16 January 2015 when commenting on the 1996 Deed:

“It was certainly my understanding that we had already fully committed ourselves to the equalisation of NPAs at 65 with effect from 1 December 1991, that we had acted and administered the Scheme on that basis and that we were merely giving formal effect to a change that had already taken place”.

To take one example, the actuarial valuation report dated 12 May 1993 carried out by Bacon & Woodrow as at 1 April 1992 contains, at Appendix 2, a list of benefit changes since the previous valuation. It notes that NPA was changed to age 65 for all men and women with effect from 1 December 1991 whilst also noting that members were permitted to retire from age 60 on unreduced pension subject to Safeway’s consent and on 3 months’ notice. The results and recommendations (in particular the recommendation concerning contributions) contained in the report “reflected the amendments made to the Scheme relating to the equal treatment of men and women”: see paragraph 2.7 of the Summary of Results on p 3.

Whilst the NPAs of members under the 1984 Deed were age 60 for women and age 65 for men, the general (but not universal) practice of Safeway was to permit members to retire from age 60 with an unreduced pension on three months’ notice being given. This practice was reflected in the 1991 Announcement as can be seen from the passage which I have quoted at paragraph 16 above. This practice lasted for both men and women until April 2003, when the funding levels of the Scheme had deteriorated to such an extent that Safeway considered that the practice could no longer be supported. All other Scheme benefits, for instance transfer values, were, however, paid with effect from 1 December 1991 on the footing of a common NPA for men and women of 65 in respect of benefit accrual from 1 December 1991.

Although the issue of construction of Clause 19 concerning the effect of the 1991 Announcement and the 1991 Letter on members’ benefits is perhaps logically the first issue which needs to be addressed, it is not possible to understand the significance of the issue – and thus precisely how the issue is to be formulated – without an appreciation of the requirements of EU law in relation to equal pay under EU law. I therefore propose to look at those principles first.

At the material times, the principle of equal pay was laid down in article 119 of the EEC Treaty in the following terms:

“1.

Each Member State shall during the first stage ensure and subsequently maintain the application of the principle that men and women should receive equal pay for equal work.

2.

For the purpose of this article, "pay" means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment, from his employer.”

The principle of equal pay was subsequently re-enacted in article 141 of the EEC Treaty and is now found in article 157 of the Treaty on the Functioning of the EU. I will refer to it in this judgment as article 119. It is worth making the preliminary observation that, as Mr Short submits, the principle of equal pay is of great importance in the European Community. As the ECJ put it in Coloroll Pension Trustees Ltd. v Russell (Case C-200/91) [1995] 2 CMLR 357; [1995] ICR 179 (“Coloroll”) at [26]:

“…it must be remembered that the principle of equal pay is one of the foundations of the Community and that article 119 creates rights for individuals which the national courts must safeguard. Article 119 being mandatory in nature, the prohibition on discrimination between men and women applies not only to the acts of public authorities but also to all contracts between private individuals and to all collective agreements intended to regulate paid employment: see Defrenne v Sabena (Case 43/75)) [1976] ICR 547, 566, 568, paras 12 and 39.”

As the Advocate General (Van Gerven) said in his joint opinion in Coloroll and other cases at [57] (as set out in the body of that paragraph in the ICR report at p 126):

“It is precisely the fundamental nature of the principle of equal treatment in the Community legal order that has repeatedly led the Court to interpret narrowly the derogations from it permitted by the Community legislature: see Roberts v. Tate & Lyle Industries Ltd [1986] (Case 151/84) [1986] ICT para. 35; Marshall v. Southampton and South-West Hampshire Area Health Authority (Teaching)(Case 152/84) [1986] ICR 335, para 54 and Beets-Proper v. F. Van Lanschot Bankiers NV (Case 262/84) [1986] ICR 706, para 38.”

In my decision in Harland & Wolff, I gave a brief description of where the law had got to. I repeat it here:

“5.

Article 119 requires member states to ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied. This article is of direct effect and can be relied on by, for instance, employees against employers to secure equality of pay. In the seminal case of [Barber], the Court of Justice of the European Communities stated the application of this provision to pension benefits, in particular deciding that it was unlawful to discriminate between men and women by providing benefits by reference to different ages at which pension becomes payable. It was, as is well known, common for pension schemes to provide different retirement ages for men and women (typically 65 and 60 respectively); the decision in Barber and the requirement to remove this discrimination was a cause of great activity in the period after the judgment of the Court of Justice (which was delivered on 17 May 1990).

6.

Because of the uncertainty, partly engendered by certain Community instruments and the decision of the Court of Justice in Newstead v Department of Transport (Case 192/85) [1988] ICR 332, about whether article 119 applies to benefits provided by a contracted-out pension scheme (the scheme in the present case was such a scheme at the time of the amendments in 1993), a temporal limitation was laid down by the Court of Justice in its decision in Barber: as the court put it, overriding considerations of legal certainty required the effects of the judgment to be limited in time.

7.

Unfortunately, the scope of that temporal limitation was itself a matter of great uncertainty. Many of the uncertainties were resolved in a series of cases: Van den Akker v Stichting Shell Pensioenfonds (Case C-28/93) [1994] ECR I-4527, [Coloroll], Smith v Avdel Systems Ltd (Case C- 408/92) 1995] ICR 596. These are conveniently reported together at [1994] Pen LR 211. The effect of these cases is summarised by Lewison J in Trustee Solutions Ltd v Dubery [2007] ICR 412, at para 4:

“Following subsequent cases, particularly [Coloroll], the effects of the Barber judgment on the requirements for equal treatment of men and women were confirmed as follows: (i) For pensionable service prior to 17 May 1990 (the date of the Barber judgment) it was not unlawful for male and female pension benefits to be provided at different retirement ages. (ii) A scheme could be amended so as to equalise benefits for men and women, if the rules of the scheme permitted such amendment. The nature of the amendment could either reduce the normal male retirement age, or increase the normal female retirement age, or both; provided that both sexes were treated equally. (iii) For pensionable service between 17 May 1990 and the operative date of any valid amendment…… male members of a pension scheme were entitled to be treated as if their normal retirement age was the same age as that applicable to female members (usually 60). This period is known, in the jargon, as “the Barber window”.”

It can be seen that, during the Barber window, the disadvantaged class was to receive the same benefits as the advantaged class. Achieving equality in this way is often referred to as “levelling up” and the phrase “levelling down” is often used in a corresponding way.

I will refer to the last two of the cases referred to above as “Avdel” and “Dubery”. To that list I should add Ten Oever v Stichting Bedrijfspensioenfonds voor het Glazenwassers- en Schoonmaakbedrijf (C-109/91) [1995] ICR 74 (“Ten Oever”).

At the date of Barber, there was no domestic provision giving effect to article 119 in relation to pension provision: the terms and conditions of employment relating to retirement were excluded from the operation of the Equal Pay Act 1970 by section 7 of that Act; article 119 was, however, of direct effect as noted in the passage I have just quoted from Harland & Wolff. Effect was given to article 119 in domestic law by sections 62 to 65 Pensions Act 1995 which came into force on 1 January 1996. These provisions are relied on by Mr Green; I will be considering them in due course.

In order to address the arguments which have been raised, it is necessary for me to go into the cases in the ECJ in rather greater depth than I did in Harland & Wolff. I need to mention some of the earlier cases in order to put into context what was said in later cases, in particular in Avdel, Coloroll and Ten Oever.

I start with Defrenne v Sabena (No. 2) (Case 43/75) [1976] ICR 547 (“Defrenne”). This explained the context of article 119 and went on to reject the suggestion that equal pay could be achieved otherwise than by increasing the pay of the disadvantaged group to match that of the advantaged group, ie by levelling up. The following is to be found at [8] to [15] of the judgment of the Court:

“8 Article 119 pursues a double aim.

9 First, in the light of the different stages of the development of social legislation in the various Member States, the aim of Article 119 is to avoid a situation in which undertakings established in States which have actually implemented the principle of equal pay suffer a competitive disadvantage in intra-Community competition as compared with undertakings established in States which have not yet eliminated discrimination against women workers as regards pay.

10 Secondly, this provision forms part of the social objectives of the Community, which is not merely an economic union, but is at the same time intended, by common action, to ensure social progress and seek the constant improvement of the living and working conditions of their peoples, as is emphasized by the Preamble to the Treaty.

11 This aim is accentuated by the insertion of Article 119 into the body of a chapter devoted to social policy whose preliminary provision, Article 117, marks 'the need to promote improved working conditions and an improved standard of living for workers, so as to make possible their harmonization while the improvement is being maintained'.

12 This double aim, which is at once economic and social, shows that the principle of equal pay forms part of the foundations of the Community.

13 Furthermore, this explains why the Treaty has provided for the complete implementation of this principle by the end of the first stage of the transitional period.

14 Therefore, in interpreting this provision, it is impossible to base any argument on the dilatoriness and resistance which have delayed the actual implementation of this basic principle in certain Member States.

15 In particular, since Article 119 appears in the context of the harmonization of working conditions while the improvement is being maintained, the objection that the terms of this article may be observed in other ways than by raising the lowest salaries may be set aside.”

The next case is Razzouk and Beydoun v EC Commission (Cases 75/82 and 117/82) [1984] 3 C.M.L.R. 470 (“Razzouk”) in which the ECJ considered the pension arrangements made for Commission staff. This was discriminatory in that it provided survivors’ pensions for widows but not widowers. The Advocate General (Slynn) agreed that this was discriminatory and should be annulled, but said (see pp 485-6 of his Opinion) that the Court should not make any decision as to the rights under the scheme as it was for the Commission to introduce equality.

The Court did not agree with this last conclusion. It said this:

“[19] As a result of this annulment it is incumbent on the Community legislature to draw the conclusions from this judgment by taking suitable measures to establish equality between the sexes as regards Community pension arrangements. In the meantime it is for the Commission to reconsider the plaintiff's request by applying the provisions of the Staff Regulations relating to the widow's pension which at present remain the only valid system of reference.”

One there sees reference to a “valid system of reference”. This is the frame of reference by which the directly enforceable rights of a member of the disadvantaged class is to be ascertained. To put this in another way, the valid system of reference comprises the arrangements (in that case, the Staff Regulations) by which the rights of the advantaged class are to be ascertained. I will, in due course, need to identify the relevant frame of reference in the present case by which the rights of the advantaged class (women) are to be ascertained in order to assess how the directly enforceable rights of the disadvantaged class (men) are to be given effect.

The approach of providing the disadvantaged class the same rights as those of the advantaged class is found in other cases relating to pensions and other forms of pay under article 119 as well as in relation to parallel rights to equal treatment in the field of social security provisions. I give some examples in the following paragraphs. Others can be found in [10] of the Advocate General’s Opinion in Avdel.

The Netherlands v Federatie Nederlandse Vakbeweging (“FNV”) (Case 71/85) [1987] 3 C.M.L.R. 767) was a case which concerned discrimination in the provision of social security, contrary to article 4 of Council Directive 79/7/EC on the progressive implementation of the principle of equal treatment for men and women in matters of social security. The ECJ held that article 4 was of direct effect and said at [22]:

“[22] It follows that until such time as the national government adopts the necessary implementing measures women are entitled to be treated in the same manner, and to have the same rules applied to them, as men who are in the same situation since, where the directive has not been implemented, those rules remain the only valid point of reference.”

Nimz v. Freie und Hansestadt Hamburg (Case C-184/89) [1992] 3 CMLR 699 (“Nimz”) concerned a discriminatory provision in a collective agreement. The ECJ held:

“[18] It follows from Case C-33/89 cited above, that, where there is indirect discrimination in a clause in a collective wage agreement, the class of persons placed at a disadvantage by reason of that discrimination must be treated in the same way and made subject to the same scheme as other workers, such scheme remaining, for want of correct application of Article 119 EEC in national law, the only valid system of reference.”

The issue was addressed in the context of retirement benefits in Coloroll, Ten Oever and Avdel.

The starting point is the combined Opinion of the Advocate General (Van Gerven) referred to at paragraph 29 above. At [59] of his Opinion, the Advocate General identified one question as concerning “the financial shaping of the equal treatment principle, in particular whether this must be put into effect by increasing the benefits granted to the disadvantaged sex or whether it may also be put into effect by reducing the benefits granted to workers of the advantaged sex”. This question arose, so far as concerns Coloroll, out of the questions referred by the High Court. The questions can be found at [16] of the judgment of the Court. Question 1(2) (ii) asked whether the direct effect of article 119 could be relied on “to require the employer and/or the trustees to use such powers as they may have, whether by amendment of the rules of the scheme or otherwise, to secure that the benefits payable under the scheme reflect the principle of equal pay” and, if the answer to that question was Yes, the next question was “(iii) does the principle of equality require the benefits of the disadvantaged sex to be increased in all cases, or is it consistent with article 119 for the benefit of the other sex to be reduced?”. Question 1(2)(iii), in referring back to a positive answer to Question 1(2)(ii), included, it seems to me, within its scope the question whether it was open to the trustees to use their power of amendment (assuming of course that they had such a power as a matter of domestic law) so as to reduce the benefits of the advantaged class.

The Advocate General’s answer is found in [60] and [61]. After referring to Defrenne v Sabena he said this:

“60.

……… The court’s statement may accordingly be regarded as only having in view discrimination occurring in the past. The fact that, in relation to such discrimination and pending a measure eliminating it, an increase of the lowest salaries is required has been confirmed by more recent case law, particularly since [Razzouk] para 19…… the court has indicated that “the only valid frame of reference” for an immediate implementation of the principle of equal treatment, so long as a scheme is still not adapted to that principle, is to be found in the pension scheme rules in force.

That means that, pending new adjusted rules, the rule applicable under the existing scheme provisions to members of the more favoured sex must also be applied to members of the less favoured sex. [Footnote 125: The court applied that criterion in particular in order to ensure application of the principle of equal treatment laid down in article 4(1) of Directive (79/7/E.E.C.) for as long as this Directive is not being implemented, in full, by the national legislature……] As regards the past, or, more precisely, as regards pension benefits which relate to periods of service performed in the past, the principle of equal treatment therefore requires that the benefits of the disadvantaged sex be brought up to the level of those of the advantaged sex.”

In contrast, the position in relation to future periods of service was different:

“However, in the case of benefits based on new rules adapted to the principle of equal treatment which govern periods of service in the future, the situation is different. Like the Commission, I take the view that Community law does not preclude a reduction of such benefits, so long as those benefits are set at a level which is the same for men and women. To take any other view would entail undesirable Community interference in a policy area which, in the present state of Community law, belongs to the sphere of competency of member states, which, as the court has repeatedly emphasised, “enjoy a reasonable margin of discretion as regards both the nature of the protective measures and the detailed arrangements for their implementation.…..”

His proposed answers in Coloroll [66] accordingly includes these:

“(3)

The Trustees of an occupational pension scheme are obliged under article 119 to do everything within their powers in order to ensure that benefits to be paid to employees or those entitled under them comply with the principle of equal treatment laid down in this article. (4) So long as article 119 has not been properly implemented, the pension benefits of the disadvantaged sex must be brought up to the level of those of the advantaged sex [with an exception relating to “periods of service in the future].”

The next relevant guidance came from the same Advocate General in Avdel prior to delivery by the ECJ of its judgment in Coloroll and the related cases. Before turning to that, I mention the reference to the ECJ from the Industrial Tribunal which can be found at [1993] PLR 19. The case concerned various groups of women whose retirement ages had been changed from 60 to 65. They included employees who had retired, those who were working, those who had left the scheme and those who had died. The result was that early retirement factors were applied from age 65 and transfer values were calculated on the basis of a retirement age of 65. This adversely affected the accrued and prospective rights of the women.

The reference records, at [25], that the rules of the Scheme were amended with effect from 1 July 1991 to provide for a normal pension date for men and women of 65 years. This change was notified to members by a notice dated June 1991. The reference does not set out the amendment power, but it is reasonable to assume that the amendment took effect pursuant to a valid exercise of that power.

That assumption is confirmed by reference to the actual amendment power which has been obtained and shown to me. The power was one “to amend or modify” the trust deed or rules and was vested in the Trustees with the consent of the Principal Employer and after consulting the Actuary. It was exercisable “so that any such alteration or modification may have retrospective effect”. It was exercisable by deed or by the insertion, in the case of the Rules, of particulars of the amendment in the Schedule to the Rules. The power was subject to a number of provisos one of which was this:

“(f)

If notice in writing of any such alteration or modification shall be published in such form and in such manner as the Trustees and the Principal Employer shall agree the trusts powers and provisions of this Deed and of the Rules shall, pending the execution of the Deed or the insertion of the particulars in the Schedule as aforesaid, be deemed to be altered or modified in such manner and to such extent as the Trustees shall determine to give effect to the provisions set out in such notice…..”

Notice having been given in June 1991, clearly the substance of the notice took effect as of 1 July 1991 either by virtue of proviso (f) or because the appropriate formal amendment had been made by that date. The reference does not disclose which was the case and it makes no practical difference. The amendment, if valid, applied to all service including service prior to the date of the notice and was in that sense retrospective in its effect.

The first question referred by the Industrial Tribunal to the ECJ was this:

“(1)

Where an occupational pension scheme has different normal pension ages for men and women (65 and 60 respectively), and where an employer seeks, in the light of [Barber] to eliminate that discrimination, is it inconsistent with article 119 of the EEC Treaty for the employer to adopt a common pension age of 65 for men and women … (ii) in respect of occupational pension benefits received by employees which are based on years of service on or after 17 May 1990, but before the date of equalisation, when the date of equalisation was 1 July 1991 …?”

The same Advocate General (Van Gerven) gave an Opinion in this case. He drew the distinction between benefits which were based on “periods of service completed in the past to which discriminatory rules applied” and benefits that were “related to service performed after the introduction of new rules adapted to the principal of equal treatment”. I need to set out some passages from his Opinion, starting with a question which he asked himself. The question was this: “Is the raising of the pension age of female employees to that of male employees, in order to comply with the court’s judgment in Barber, compatible with article 119 of the EEC Treaty?” For reasons which will become apparent in due course, Mr Green attaches importance to the words “in order to comply with the court’s judgment in Barber”. In answering his own question, the Advocate General, in addressing the general principles, said this:

“9.

Although the matter in issue is delicate, my view is that the fundamental answer is quite clear under Community law. A similar question has been referred to the court in [Coloroll] in which the High Court of Justice (Chancery Division) seeks to ascertain whether the implementation of the principle of equal treatment requires that the benefits for the disadvantaged sex be increased in all cases or, on the contrary, whether it is consistent with article 119 for the benefits of the other sex to be lowered: question 1(2)(iii) in that case. In my joint opinion of 28 April 1993 in [Ten Oever] and other cases … , point 60, taking the court's case law as my basis, I drew a distinction between pension benefits according to whether they were based on discrimination occurring in the past (after the judgment in [Barber]) or they were related to service performed after the introduction of new rules adapted to the principle of equal treatment as a result of that judgment. That distinction must also be maintained in the present cases.

10.

As regards benefits based on periods of service completed in the past to which discriminatory rules applied, it is necessary, pending rules to abolish such discrimination, to increase the level of benefits of the disadvantaged sex so as to bring it up to that of the advantaged sex. In cases involving sex discrimination the court has consistently held that the more favourable rules must be applied to the less favoured sex, those rules forming “the only valid frame of reference” for immediate implementation of the principle of equal treatment…..

11.

The situation is fundamentally different so far as concerns benefits based on new rules adapted to the principle of equal treatment and relating to future periods of service, that is to say periods completed after the entry into force of the rules. [He then repeated much the same as he had said in his Opinion on Coloroll as set out at paragraph 46 above.]…… The court's finding [in Defrenne] may accordingly be regarded as applying only to discrimination in the past, with regard to which the court, as already stated, requires that the more favourable rules should also apply to the less favoured group….”

…….”

Applying those principles to the facts in Avdel, the Advocate General said this:

“14.

Next, there is levelling-up of pensionable ages [note that, although the age was raised, the benefit was levelled down] of male and female employees as regards pension benefits acquired by virtue of periods of service completed between 17 May 1990 and the date of levelling-up, which in this case was 1 July 1991. Since these periods of service are posterior to the judgment in Barber, full application must be given to the rule derived from the case law of the court that the principle of equal treatment requires that the rule or rules applying to the more favoured sex (in this case, women) must also be applied to the less favoured sex (in this case men).

Unlike the Commission …… I therefore take the view that article 119 of the E.E.C. Treaty does not permit levelling-up of pensionable ages as regards benefits acquired by virtue of those periods of service…..

15.

Finally, as regards the levelling-up of pensionable ages for benefits acquired by virtue of periods of service posterior to the date of levelling-up, I would…. agree ….that such a step is not contrary to article 119 of the EEC Treaty, provided at least that it complies in full with the principle of equal treatment.”

That last paragraph is reflected in the Advocate General’s conclusions:

“29.

.… Community law does, however, preclude such a step [raising pensionable age] in relation to periods of service completed between 17 May 1990 and the date on which pensionable ages are levelled. In the case of the last mentioned periods of service, the principle of equal treatment must be implemented by applying the rules enjoyed by the members of the more favoured sex to members of the less favoured sex.”

The judgments in Coloroll and related cases and in Avdel were given in September 1994. The results followed the Opinions of the Advocate General. In Coloroll, the Judge Rapporteur, Judge Mancini, recorded under the heading “Effects of article 119 of the EEC Treaty on the rules of the scheme” one contention of Mrs Broughton (who was arguing for the most limited scope of article 119). She argued that the consequences of such sex inequality as may be found to exist are to be determined in accordance with national law. Thus, in an appropriate case, inequality may be corrected by making appropriate changes to the benefits received by the advantaged class, without equalisation having necessarily to be secured by increasing the benefits of the disadvantaged class. That argument was directed not only at achieving equality of benefits relating to periods after the change but also at achieving equality of benefits relating to earlier periods.

I have already set out [15] of the judgment in Defrenne at paragraph 35 above. The Court ruled against the argument that compliance with article 119 could be achieved otherwise than by raising the lowest salaries in view of “the connection between article 119 and harmonisation of working conditions”. That ruling was referred to by the Court at [30] of its judgment in Coloroll. In [31] of that judgment, the Court referred to Nimz (see paragraph 41 above) and the need, in effect, to level up. It continued in [32] to [36] to say this:

“32.

It follows that, once the court has found that discrimination in relation to pay exists and so long as measures for bringing about equal treatment have not been adopted by the scheme, the only proper way of complying with article 119 is to grant to the persons in the disadvantaged class the same advantages as those enjoyed by the persons in the favoured class.

33.

The situation is different as regards periods of service completed after the entry into force of rules to eliminate discrimination, since article 119 does not then preclude measures to achieve equal treatment by reducing the advantages of the persons previously favoured. Article 119 merely requires that men and women should receive the same pay for the same work without imposing any specific level of pay.

….

36.

The answer to be given to the second part of the first question must therefore be that, in so far as national law prohibits employers and trustees from acting beyond the scope of their respective powers or in disregard of the provisions of the trust deed, they are bound to use all the means available under domestic law, such as recourse to the national courts, in order to eliminate all discrimination in the matter of pay. Moreover, as regards periods of service completed after the court's finding of discrimination but before the entry into force of the measures designed to eliminate it, correct implementation of the principle of equal pay requires that the disadvantaged employees should be granted the same advantages as those previously enjoyed by the other employees. However, as regards periods of service subsequent to the entry into force of those measures, article 119 does not preclude equal treatment from being achieved by reducing the advantages which the advantaged employees used to enjoy.…”

It is clear from this analysis that if trustees and employers have power in accordance with national law to achieve equal treatment, and so do not have to have recourse to the national courts, they must exercise their powers to achieve that end. Accordingly, if a scheme contains a power of amendment which can be used to achieve equal treatment, then it must be used to do precisely that. The second sentence of [36] applies whether that equal treatment is achieved through the use of express powers, such as a power of amendment of the trust deed and rules governing a pension scheme, or through recourse to the courts.

On the same day as judgment was given in Coloroll, the ECJ delivered its judgment in Avdel. All of the judges sitting in Avdel also sat in Coloroll. It cannot be suggested that there is any conflict or inconsistency between the two decisions. They must be read together in a way which is compatible. As appears from [5] of the judgment, the Court was well aware that the change in retirement age for women from 60 to 65 related to benefits payable in respect of periods of service both prior and subsequent to 1 July 1991 (the effective date of the changes). I need to include, at this stage, a fairly long citation:

“13.

It was in order to comply with the Barber judgment that the occupational scheme concerned in the main proceedings adopted the measure now in dispute. In order to do so, it opted for one of the two possible ways of achieving equal treatment: instead of granting men the same advantage as that enjoyed by women and thus lowering their retirement age to that for women, the scheme raised the retirement age for women to that for men, even for the past, including the period prior to the Barber judgment, and as a result the position of women was made less favourable.

14.

That being so, the point raised is whether it is permissible, for the purpose of achieving equality, to take away from the favoured class (in this case, women), both for the past and for the future, the advantage enjoyed by that class, the reference date being either the date of entry into force of such a measure (in this case, 1 July 1991) or the date (17 May 1990) of the Barber judgment which identified the discrimination to be eliminated.

15.

and 16. [In paragraph 15, the Court made the same points as it had made in Defrenne and Coloroll, in relation to harmonisation, as to which see paragraph 57 above, and in paragraph 16 it again referred to the “only valid point of reference”.]

[17] It follows that, once the court has found that discrimination in relation to pay exists and so long as measures for bringing about equal treatment have not been adopted by the scheme, the only proper way of complying with article 119 is to grant to the persons in the disadvantaged class the same advantages as those enjoyed by the persons in the favoured class.

18.

Application of this principle to the present case means that, as regards the period between 17 May 1990 (the date of the Barber judgment) and 1 July 1991 (the date on which the scheme adopted measures to achieve equality) the pension rights of men must be calculated on the basis of the same retirement age as that for women.

…

21.

As regards periods of service completed after the entry into force, in this case on 1 July 1991, of rules designed to eliminate discrimination, article 119 of the Treaty does not preclude measures which achieve equal treatment by reducing the advantages of the persons previously favoured. Article 119 merely requires that men and women should receive the same pay for the same work without imposing any specific level of pay.

22.

The answer to the first question must therefore be that article 119 of the Treaty precludes an employer who adopts measures necessary to comply with the Barber judgment from raising the retirement age for women to that for men in relation to periods of service completed between 17 May 1990, the date of that judgment, and the date on which those measures come into force. On the other hand, as regards periods of service completed after the latter date, article 119 does not prevent an employer from taking that step. …”

In the last EU case which I wish to mention at this stage, Fisscher v Voorhuis Hengeglo BV (Case C-128/93) [1995] I.C.R. 635 (“Fisscher”), the issue related to the fact that married women had historically been excluded from the scheme but had been permitted by virtue of an amendment dated 1 January 1991 to join with effect from 1 January 1988. This practice of excluding women was challenged by a female member on the grounds that it was contrary to article 119 and so she claimed to be entitled to retroactive membership as from 1 January 1978. Having concluded that the exclusion of married women from the Scheme was contrary to article 119 so that female members were entitled to a retroactive right to join the Scheme, the ECJ was asked to address the question whether that meant that female members were not bound to pay the premiums which they would have had to pay had they been admitted earlier to the Scheme.

The answer to that question given by the ECJ was that women were bound to pay those premiums for the following reasons given at [34] to [36] of the Judgment:

“34.

As far as the right to be a member of an occupational scheme is concerned, Article 119 requires that a worker should not suffer discrimination based on sex by being excluded from such a scheme.

35.

This means that where such discrimination has been suffered, equal treatment is to be achieved by placing the worker discriminated against in the same situation as that of workers of the other sex.

36.

It follows that the worker cannot claim more favourable treatment, particularly in financial terms than he would have had if he had been duly accepted as a member”.

I have mentioned sections 62 to 65 Pensions Act 1995 (“PA 95”) at paragraph 33 above. I now need to look at them.

Section 62 is headed “The equal treatment rule”. It provides materially as follows:

“(1)

An occupational pension scheme which does not contain an equal treatment rule shall be treated as including one.

(2)

An equal treatment rule is a rule which relates to the terms on which

(a)

persons become members of the scheme, and

(b)

members of the scheme are treated.

(3)

Subject to subsection (6), an equal treatment rule has the effect that where

(a)

a woman is employed on like work with a man in the same employment,

(b)

a woman is employed on work rated as equivalent with that of a man in the same employment, or

(c)

a woman is employed on work which, not being work in relation to which paragraph (a) or (b) applies, is, in terms of the demands made on her …. of equal value to that of a man in the same employment,

but (apart from the rule) any of the terms referred to in subsection (2) is or becomes less favourable to the woman than it is to the man, the term shall be treated as so modified as not to be less favourable…..”

Section 63 is a supplementary provision. Subsection (6) provides that section 62 is to be treated as having had effect in relation to any pensionable service on or after 17 May 1990.

Section 65 provides for the consequential alteration of schemes. So far as material, it provides:

“(1)

The trustees or managers of an occupational pension scheme may, if

(a)

they do not (apart from this section) have power to make such alteration to the scheme as may be required to secure conformity with an equal treatment rule, or

(b)

….

by resolution make such alterations to the scheme.

(2)

The alterations may have effect in relation to a period before the alterations are made.”

The meaning of these provisions is a matter of contention. Mr Green’s submission is that section 62 brought about a situation under which all occupational pension schemes became automatically compliant with article 119 on 1 January 1996; the section amounted to the “measures” which the case law has demonstrated to be required in order to bring about equal treatment. Although scheme documentation ought to be amended so that the wording of that documentation reflects the equal treatment rule, it is not necessary for that to be done for the scheme to be treated as so amended and, if it is so treated, then that is enough for the purposes of article 119. Mr Short says that that is a misunderstanding of the purpose and effect of section 62. I will deal with this dispute later in this judgment.

I dealt with a very similar issue in my decision in Harland & Wolff. Mr Short submits that the present case is, in fact, indistinguishable and that my decision was correct. Mr Green submits that my decision is distinguishable, or if not distinguishable, should not be followed because the argument which he now pursues was not taken in Harland & Wolff.

In [12] of my judgment in Harland & Wolff, I recorded one argument of Mr Paines QC (who appeared for the employer) whose case was that the retrospective amendment of the trust deed and rules was effective. The argument as I recorded it was that article 119 only requires equality of treatment and did not require that any particular level of benefit was required. Prior to the amendments in 1993, the benefits provided under the trust deed and rules were subject to amendment pursuant to the power contained in rule 32 and such amendment could result in a reduction. Pursuant to the exercise of that power, the rules were rewritten so that the new normal retirement date for women was applied with effect from 17 May 1990, an element of retrospection being expressly permitted by the amendment power. Accordingly, the benefits of men and women had been (retrospectively) equalised with effect from 17 May 1990. Ultimately, I rejected that argument. I do not understand Mr Green to submit that I was wrong to do so. But what he does say is that the argument which he, Mr Green, now presents and to which I will come in due course, is a different argument, which Mr Paines did not raise. Had Mr Paines done so, my answer would, Mr Green says, inevitably have been different.

In [18] and [19] I addressed what the Advocate General and the Court had meant in using the phrases “same arrangements” and “only valid point of reference”. I concluded that they must have been intending to refer not simply to the level of benefits and the time of payment of benefits, but also to other provisions of the scheme which define and limit the benefits (such as a forfeiture provision). Even so, I considered that it was unclear whether or not account was to be taken of a power of amendment which might be exercised validly under domestic law with retrospective effect.

In [22] I observed that the critical difference between the situations before and after the entry into force of new rules appeared to be that, after that time, article 119 imposes no specific level of pay whereas before that time, it is the rules in force which are the only valid point of reference, so that equal treatment requires the same level of pay to be enjoyed by both classes as were enjoyed by the advantaged class. Those “rules” on Mr Green’s submissions, include the pre-existing power of amendment. He submits that the power of amendment is part of the arrangements to which the benefits of a member are subject since it is the entire scheme which forms the only valid point of reference.

In Harland & Wolff, I took the phrase “entry into force” from the words of the Advocate General and the Court in Coloroll and Avdel. They reflect the consistent requirement demonstrated in the cases that discrimination prior to the date on which steps are taken to introduce equality must be remedied by levelling up. As Mr Short submits, the past did not end, and the future did not begin, until those steps were taken. In Coloroll, the Court at [32] referred to the entry into force of “measures” although I do not perceive any difference in substance between the entry into force of measures and the taking of steps, in each case to achieve equality of treatment.

In the context of a pension scheme, the obvious way in which the appropriate steps or measures can be taken is by an amendment to the provisions of the scheme. I do not say that that is the only way in which equal treatment can be achieved, but what is clear is that the steps or measures which are taken must put the disadvantaged class into the same position as the advantaged class by levelling up for the period from 17 May 1990 until equal treatment has been achieved (that is to say the time of entry into force of those measures or those steps taking effect).

At [25] of my judgment, I observed that the terms of the amendment power in Avdel did not appear from any of the decisions or judgments in that case. I did, however, note that it was clear that everyone proceeded on the basis that, as a matter of domestic law, the amendments to the scheme were valid and effective to reduce benefits for women in respect of the three periods (i) prior to 17 May 1990 (ii) from then to 1 July 1991 and (ii) thereafter, so that the amendment was of retrospective effect. That is confirmed by reference to the power of amendment which is now before the Court: see paragraph 49 above.

In saying what I did at [26] of my judgment, to the effect that no-one had argued that it was permissible to reduce women’s benefits earned in the period 17 May 1990 to 1 July 1991, I now see that I had overlooked the Commission’s argument recorded in the second paragraph of [21] of the report for the hearing: see [1995] ICR at 605C. It was therefore a live issue whether equality could be achieved by the adoption of a common normal retirement date of age 65 for all periods of service. My oversight did not affect my eventual decision, but it is right to record it here because it is relevant to what the Court did and did not actually decide in Avdel.

In [31] and [32] I considered the Advocate General’s opinion, concluding that it was clear that he did not regard service prior to the actual amendment to be “future” (in accordance with his division of service into past and future) simply because, after 1 July 1991, the amendment was fully retrospective. And then in [33] to [35] I considered the judgment of the Court. In [34] I said this:

“34.

The question then identified (see p 627, para 14) was whether it was permissible to take away from the favoured class “the advantage enjoyed” by that class, the reference date being either the “date of entry into force of such measure (in this case 1 July 1991) or the date (17 May 1990) of the Barber judgment.”

Mr Green draws attention to the fact that that summary of what the Court said in [14] omitted the words “for the purpose of achieving equality” after “whether it was permissible”. He presents an argument based on the effect of those words to which I will come in due course: see paragraph 143ff below.

My discussion of the issues in Harland & Wolff runs from [36] to [45] and my conclusions are to be found at [46] to [51]. In [36] I identified a certain logic in the submissions of Mr Paines QC, submissions based on the fact that a woman’s benefits were always vulnerable to reduction pursuant to a proper exercise of the power of amendment (at least until they had fallen into payment): there is no reason why a requirement to treat men and women in the same way should result in men being granted a benefit better than that currently enjoyed by women, namely one entrenched against subsequent amendment. As I recorded Mr Paines’ submission, there can “be nothing objectionable… in levelling down the women’s benefits to achieve equality since that is precisely what the power of amendment permits”.

In [37], I mentioned the argument based on In re Collard’s Will Trusts [1961] Ch 293 (“Collard”). Equality could have been achieved by levelling up and then the benefits of both men and women could have been retrospectively altered pursuant to the amendment power so as to provide for a common normal retirement age of age 65; in accordance with Collard, this court will not require two steps to be taken, that is to say, reducing the normal retirement age to age 60 and then increasing it for both men and women to age 65, but will give effect to the single step, namely, increasing the normal retirement age to age 65. Jumping ahead, I mention again the argument now raised by Mr Green but not raised in Harland & Wolff and which I will consider later: namely that section 62 PA 95 of itself brought about equal treatment in a way which satisfied the requirements of article 119. There is no need to invoke Collard because, by the time of the 1996 Deed, NRA had been equalised at age 60 as a result of section 62; all that the 1996 Deed did was to change the common NRA from age 60 to age 65, something which was entirely consistent with article 119.

Mr Newman (who appeared for the trustees) submitted that Avdel had decided the very point at issue in Harland & Wolff, namely that there had to be levelling up even where the power of amendment in point permitted levelling down. But Mr Paines submitted that a careful reading of Avdel shows that it did not establish the proposition that benefits must be levelled up in respect of the Barber window in all cases. It all depended on the precise scope of the amending power. As to Mr Paines’ argument, I said this:

“40.

The first point [Mr Paines] raises is that the court, in using the phrase “date of entry into force” of the equalising measure, was looking at the date from which it took effect according to its terms. Thus, in [Avdel] itself, that date was 1 July 1991. In the present case, so far as the change in NRD is concerned, the amendment is expressly backdated to 17 May 1990 and that backdating was expressly authorised by the amending power in rule 32. The second point, which goes with it, is that when one reads the 1993 deed and rules after their execution, it can be seen that the benefits accruing for both men and women during the Barber window were based on a common NRD of age 63: because the amending power is expressly retrospective, the amendment takes effect, he says, for all purposes as if the new NRD had actually been in place on 17 May 1990.

41.

I reject that interpretation of the judgment in [Avdel]…... [W]hat the court decided was that benefit accrual during the Barber window had to be at the rate appropriate to the advantaged class. It reached that conclusion against the background of the exercise of a power of amendment which resulted, as much for women attaining age 60 after 1 July 1991 as for those attaining that age during the period 17 May 1990 to 1 July 1991, in a reduction of benefits. I am of the firm view, on a proper reading of the judgment, that the court was concerned to look at the (discriminatory) benefits before any change in the rules designed to achieve equalisation had been made and to compare that position with the position which obtained after that change…..”

After noting in [42] that the substance of the amendment in Avdel was that it was fully retrospective for all service (in that, after 1 July 1991, the benefits for men and women in respect of their entire service were based on a pensionable age of 65) I went on, in [43] and [44] to say this:

“43.

It is impossible, to my mind at least, to think that the court's approach would have been any different from what it was in [Avdel] in the case of an amendment which, as a matter of form, stated that it was retrospective and was made pursuant to a power of amendment expressly providing for such retrospectivity. In both cases, the apparent benefit provided by the scheme prior to amendment is subject to reduction. The right arising under article 119 prior to the actual amendment, ie the right to equal treatment, is a substantive right. If it is correct that the article 119 right immediately before the making of an amendment can be adversely affected by the exercise of a power where both the power and its exercise are expressed to be fully retrospective then I can see no reason why the same should not apply in the case of the exercise of a power where the power can be, and has in fact been, exercised in a way which is retrospective. There is, in my judgment, no valid distinction for present purposes between the two types of power and their exercise.

44.

Another way of making this point is to look at the position immediately before the execution of the 1993 deed and rules in the present case. At that stage, before any attempt has been made to rewrite history by making a retrospective amendment, men are entitled to claim, in respect of service after 17 May 1990, benefits on the same basis as those accruing to women. The question is then asked: can this right which men have be adversely affected, as a matter of Community law, by amendment? The answer to that question cannot, it seems to me, depend on the precise wording of the power under which it is sought to act. The question in all cases, assuming that the amendment is effective under national law, is whether levelling down is permitted. [Avdel] has answered that question in the negative.”

In [46] I concluded that, in respect of the Barber window, men were entitled to have their benefits levelled up to those of women on the basis of a normal retirement date of age 60. The 1993 deed and rules did not provide this accrual and could not stand consistently with article 119. The arguments which I had addressed up to that point were concerned with a single exercise of the power of amendment which, materially, did only one thing, namely it reduced benefits for women by introducing a common normal retirement date for men and women of age 63. In [47] to [50] I addressed the argument based on Collard. I concluded that a member’s rights under article 119 are not entrenched for all time, saying that it did not follow from Avdel that an amendment to the scheme many years in the future and having nothing to do with equalisation issues would be invalid. If a scheme is amended so as to provide, expressly, for the equal treatment which article 119 requires then those benefits should, I considered, be subject, in principle, to the scheme amendment power.

I went on, however, in [49] to consider whether Community law would permit a two-stage process under which benefits were levelled up and then, in the space of a short time, the benefits of both men and women were reduced. I concluded that the decision of the ECJ in Avdel was essentially inconsistent with the validity, from a Community law perspective, of this two-stage approach.

Mr Green has two main submissions. The first relates to the true meaning and effect of Clause 19. He says that Harland & Wolff is not engaged: the present case is not one which concerns a retrospective adoption of “measures” at all. The second relates to the effect of section 62 Pensions Act 1995: that section, he says, brought about the required equal treatment as from 1 January 1996 without the need for any amendment to the scheme provisions in order for EU law to have been fully complied with. The 1996 Deed applied the same treatment in respect of men and women to the (equal) benefits of men and women so that article 119 has no relevance to the validity of the 1996 Deed.

If those submissions are wrong, his secondary submission is that Harland & Wolff represents an excessive application of EU law and should not be followed. I deal with the meaning and effect of Clause 19 first.

The general approach to construction of pension scheme documents is well known. I have summarised it in my judgments in PNPF Trust Company Limited v Taylor [2010] EWHC 1573, [2010] PLR 261 at [127] to [145] and IBM United Kingdom Holdings v Dalgleish [2014] EWHC 980 (Ch) at [215] to [218]. I do not need to repeat again what I said there. However, Mr Green also relies on my decision in Premier Foods Group Services Ltdv RHM Pension Trust Ltd [2012] EWHC 447, [2012] PLR 151 (“Premier Foods”). I do not think that I said anything novel in my judgment about the general approach. Mr Green relies – at least he says it makes salutary reading - on what I said at [54]. I need to set it out in order to address his submission:

“54.

Mr Simmonds says that, on his construction, this is not really a problem because the Trustee knows that, within a reasonably short time, everything will be retrospectively validated. I find that an unsatisfactory answer. I am not attracted, to say the least, by a construction which necessarily involves a Trustee acting other than in accordance with the provisions of the trust even when, in practical terms, any breach can be retrospectively validated. But where the breach cannot be retrospectively validated, such a construction is almost impossible to defend. …. Certainly, when faced with competing constructions one of which does, and one of which does not, involve a breach of trust, I prefer the one which does not in the absence of compelling reasons to the contrary.”

I derive no assistance from that particular submission in the context of the present case. What I said there concerned giving validity to a deed as an effective exercise of the relevant power of amendment. I held that the Deed of Intention in that case was effective as a matter of construction, to exercise the power of amendment which was exercisable by deed, adopting the approach to construction indicated in [54]. That case was not only entirely different from the present case, but I do not consider that any parallel can usefully be drawn between it and the present case. It is one thing (as in Premier Foods) to construe a deed (the Deed of Intention in that case) as effective to exercise a power of amendment rather than simply as an expression of intention; it is quite another to construe the power of amendment itself so as to give effect to a document which is not a deed (the 1991 Announcement and/or the 1991 Letter in the present case) as an exercise of a power of amendment which is expressed to be exercisable by deed.

Mr Green focuses on [17] and [29] of the judgment of the ECJ in Avdel which requires, in order to achieve compliance with EU law, “measures for bringing about equal treatment to have been adopted by the scheme”. Equal treatment is achieved upon “the entry into force” of those measures. I have discussed the concept of “measures” and the meaning of “entry into force” at paragraphs 70ff above. In particular, I have said that it is clear that the steps or measures which are taken must put the disadvantaged class into the same position as the advantaged class by levelling up for the period from 17 May 1990 until equal treatment has been achieved (that is to say the time of entry into force of those measures or those steps taking effect).

Mr Green says that it is a question of domestic law when the relevant measures were adopted and entered into force. The relevant questions in the present case are whether the 1991 Announcement amounted to the necessary “measures” and if so when did the entry into force of those measures occur. As to the first of those questions, Mr Green identifies the issue as being whether a common NPA of age 65 was as of 1 December 1991 implemented under and in accordance with the trusts and provisions of the Scheme. His case is that the 1991 Letter were effective, as a matter of domestic law, to implement an increase in the NPA of women from 60 to 65 in a way which amounted to “measures” for the purposes of EU law. In terms of the “past” and the “future” as discussed by the Advocate General in Coloroll and Avdel, the past ended on 30 November 1991 and the future began on 1 December 1991.

The words of Clause 19 (the full text is set out at paragraph 8 above) of importance are these:

“which may be the date of such Deed or the date of any prior written announcement to Members of the alteration or addition or a date occurring at any reasonable time previous or subsequent to the date of such Deed so as to give the amendment or addition retrospective or future effect as the case may be.”

I have highlighted in bold face the words (“the bold-faced words” to adopt Mr Green’s definition) which are the critical words on which Mr Green relies. He submits that the effect of the bold-faced words is that, once there had been issued a “written announcement to Members of the alteration or addition” (in the present case, the 1991 Notices), SPTL was explicitly, alternatively by necessary implication, authorised under and in accordance with the trusts of the Scheme to operate it on the basis that the change announced was effective, pending the subsequent making of a formal deed confirming the same. Thus one finds arrangements (to use my word), namely the 1991 Notices, which he submits constitute “measures” and the entry into force of those measures occurred on 1 December 1991 since that is clearly the date when the arrangements came into effect. I agree this far: that if the 1991 Notices constituted measures sufficient to comply with the EU requirements concerning equal treatment, then the measures did, indeed, come into force on 1 December 1991.

Mr Green does not submit that the Scheme was actually amended by the 1991 Notices when Clause 19 requires amendments to be made by deed. However, his case is that SPTL would not be acting other than under and in accordance with the trusts and provisions of the Scheme if it were to conduct itself in accordance with an announcement within the bold-faced words even at a time before the announcement had been given formal effect by an amendment by deed to the trust deed and rules. The purpose of the bold-faced words is, he says, to legitimise as a matter of trust law and administration the implementation of “the written announcement to members” pending its being swept up in the next definitive deed or other supplemental instrument (which in fact took place in the 1996 Deed).

His case is that Clause 19 is predicated upon trustees, who act upon an announcement pending the making of a confirmatory deed bringing the text of the rules into conformity with the way in which the Scheme has been operated, having acted in a manner authorised by their trusts, not having been in breach of trust in doing so, and on members not being entitled to assert otherwise. As he puts it, “Clause 19 is in the nature of a compound amendment power, that enables trustees to proceed pro tem as if the textual rules had been amended, pending the textual rules actually being brought up to date by a supplemental deed, so as to catch-up with what has been announced”. I am not sure whether Mr Green’s case goes as far as saying that an announcement which has not reached the stage of implementation at all is nonetheless a “measure” but it is not necessary for him to do so.

He says that Clause 19 is obviously concerned with announcements which have been acted on and that it is obviously not concerned with announcements which have not been acted on. I do not necessarily accept the second proposition but I do not think anything turns on that. The important point is that some announcements will relate to immediate changes or to changes which are intended to take effect at some date in the future, and are in fact implemented, but before the relevant amendment by deed has been made.

Mr Green draws an analogy with an interim trust deed. Trustees are often enabled to run a scheme in accordance with announcements and booklets pending their incorporation into a definitive deed. In effect, Clause 19 preserves, he says, that possibility even after the definitive deed is made. This result, I observe, is to include within Clause 19, as a matter of interpretation, a power or direction to similar effect as proviso (f) to the power of amendment in Avdel. I do not derive any assistance from that analogy in the task of interpretation. At most it is an example of a situation where the operative trusts are to be found outside the formal scheme document (the interim deed) and demonstrates that there is nothing inherently odd about the result for which he contends. In any case the power of amendment in Avdel demonstrates even more clearly than the interim deed analogy one way in which matters could rationally and sensibly be constructed.

Mr Green says that the present case is entirely different from Harland & Wolff: there is no element of retrospectivity because what was done pursuant to the 1991 Notices was done prospectively with effect from 1 December 1991 and done perfectly properly as of 1 December 1991 pursuant to the bold-faced words. Accordingly, Harland & Wolff is simply not engaged.

Further, there are these differences from the position in Harland & Wolff:

Consistently with those submissions, Mr Green asks rhetorically what would have happened if a male member had come along between 1 December 1991 and 2 May 1996 and sought to argue that his NPA was 60 as of right (rather than subject to Safeway’s discretion) in relation to the post-1 December 1991 period, because a supplemental deed had not been executed in the meantime. His answer is that SPTL and Safeway would have been fully entitled to reject such a claim; and they would have been entitled to back up their refusal with a supplemental deed confirming the change of NPA with effect from 1 December 1991 in accordance with the written announcements. Mr Green asked his rhetorical question by reference to a man (presumably focusing on the man’s rights under article 119). But the question arises with even more force in relation to a woman who has a right to an NRA of 60 without any need to rely on article 119 at all. No doubt Mr Green’s answer would be the same as in the case of a man.

He submits, in any case, that such a scenario is unreal and that his rhetorical question does not represent a genuine test of whether “measures” were adopted or brought into effect on 1 December 1991. But continuing with the question, he says that SPTL and Safeway could have chosen to admit the man’s claim and not to execute a supplementary deed in relation to him. This, he says, would be the conferring of a discretionary benefit on the man at that time (as was done in fact in relation to most people taking early retirement at age 60 until 2003). This submission appears to me to be inconsistent with the proposition that Clause 19 provides simply an authority for SPTL to act in accordance with the 1991 Notices; if it had been merely an authority, the decision not to make a supplemental deed would simply leave matters as they are, namely with the benefits as set out in the unamended trust deed and rules and a decision not to depart from them. This submission, however, appears to me to accept that there would be a discretionary improvement in benefits awarded to the man which would not be the case if Clause 19 had merely conferred an authority to act in accordance with the 1991 Notices.

Mr Green draws attention to the fact that the 1991 Announcement also informed members of a benefit improvement, namely a right to an increase in pension in payment in excess of gmps by 5% pa or RPI if less. He asserts that SPTL’s implementation of that benefit improvement did not involve a breach of trust. There was no breach of trust, he says, because the bold-faced words authorised the adoption of the changes under and in accordance with the trusts of the Scheme even before a formal amendment was made to the wording of the Scheme documentation.

Mr Newton’s case is that, on the proper construction of Clause 19, any amendment was made on the date of the deed making the amendment. He acknowledges that, as a matter of domestic law, such an amendment could take effect from a date prior to the deed so that the adoption of a common NPA of age 60 for men and women by the 1996 Deed with effect from 1 December 1991 would have been valid. However, until the 1996 Deed, benefits had not been equalised, the 1991 Notices were ineffective on their own to achieve that result so that, until that date, women continued to have an NPA of age 60. And so Mr Short challenges Mr Green’s submission that, by virtue of the 1991 Notices, a common NPA for men and women was implemented “under and in accordance with the trusts of the Scheme” as a result of the 1991 Notices.

Although it is therefore common ground that a formal amendment was not effected under Clause 19 until the 1996 Deed, I think that it is important to consider in some detail what Clause 19 requires for there to be such an amendment. In that context, I need to rehearse some of Mr Short’s submissions which now seem to be of other than central significance.

Mr Short draws attention to the structure of Clause 19 which can be divided into two parts:

He submits that the words of Clause 19 are unambiguous: an alteration has to be made by deed but the deed, when made, may have retrospective effect. The unambiguous words of the clause are the primaryguide to its meaning, reliance being placed on:

In the context of a pension scheme, the requirement for formalities to be observed is important. In particular, the requirement in a power of amendment for a deed is an important protection for members and the court should be very careful before departing from the plain words. Mr Short relies on Bestrustees v Stuart [2001] PLR 283 at [33]. It is worth having the facts of that case in mind. Following Barber, the employer and the trustees of the scheme issued an announcement to members on 26 April 1994 which purported to change normal retirement date to a common age of 65, having previously been 65 for men and 60 for women. The announcement, which was made by the employer, stated that the formal scheme rules were being amended with effect from 6 April 1994 to give effect to such changes. On 23 May 1996, a new set of rules was brought into force to give effect to the changes in the earlier announcement. The power of amendment provided that the employer:

“may… authorise the trustee in writing to alter or add to the terms and provisions of the rules in the trust, powers and provisions of this deed, and any such alteration or addition may have retrospective effect. The trustees shall forthwith declare any such alteration or addition to the rules in writing under its hand, or any such alteration or additions to this deed in writing under its hand and seal….. This deed and/or the rules shall stand amended accordingly with effect from the effect [perhaps this should be “date”] of such declaration or from such other date, whether future or past, as is stated in such declaration…..”

There was a proviso which protected pensions in payment and accrued rights up to the date when the alteration took effect.

The announcement was intended to be effective only from 26 April 1994 and not from any earlier date. Neuberger J held that it was ineffective of itself to amount to the written declaration envisaged by the power of amendment from which I have quoted the relevant words above. The Judge started his discussion by reference to the position in relation to the period from 26 April 1994 (the date of the announcement) to 22 May 1996 (the date of the amending deed). At [31], he set out and adopted six features of the amending power. For present purposes, I need to identify four of those: