Our Ref: LGR85/18/71 441 INDEX
29 October 1998
LOCAL GOVERNMENT PENSIONS APPEAL
LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1995 (“the 1995 regulations”)LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (“the 1997 regulations”)
1. I refer to your letter of 10 June 1998 in which you appeal (under regulation 102 of the 1997 regulations) against the decision of Mr XXX, the Appointed Person. The Appointed Person determined that the payments for additional overtime worked were payments for non-contractual overtime and that they could not, therefore, be included in the calculation of your pensionable remuneration for the purposes of calculating your retirement benefits.
2. You appealed to the Secretary of State. You do not contend that the Appointed Person has incorrectly applied the regulations, rather you contend that your employer should have amended your contract. You further contend that you had signed your contract under protest because the overtime not covered by your contract, should have been shown as contractual.
3. The Secretary of State’s powers under regulation 102 are limited to reconsidering disagreements about a matter relating to the local government pension scheme (LGPS), which effectively means whether or not the pension scheme regulations have been correctly applied in the given circumstances. Questions relating to an employee’s contract of employment lie outside the pension scheme and are a matter between the employer and employee. They are not matters the Secretary of State can consider on appeal and he determines accordingly. However, the Secretary of State can consider whether overtime is contractual overtime for the purposes of the 1995 regulations (which were in force when you ceased employment).
4.The question for determination: The question for determination by the Secretary of State is whether the overtime payments not included in your contract are pensionable remuneration.
5. The Secretary of State has considered all the representations and evidence. Copies of all the documents supplied by the Appointed Person have been sent to you under cover of the Department’s letter dated 6 July 1998. Further information was sought from xxx Council (the council) and their letter of 1 September 1998 was copied to you on 9 September 1998.
6. Secretary of State’s determination: The Secretary of State having taken into account the appropriate regulations, finds that the additional overtime payments are not pensionable remuneration. His decision confirms that of the Appointed Person. The Secretary of State’s reasons and the regulations which he considers apply in your case are set out in the annex to this letter, which forms an integral part of the determination. Having made his determination, he has no powers to alter it but you may refer the matter to the Pensions Ombudsman or to the High Court. Because of this, the Secretary of State’s officials cannot discuss the case further.
7. This completes the second stage of the internal disputes resolution procedure. The Pensions Advisory Service (OPAS) is available to assist members and beneficiaries in connection with difficulties which they have failed to resolve. The address is 11 Belgrave Road, London, SE1V 1RB (telephone number 0171 233 8080).
8. The Pensions Ombudsman may investigate and determine any complaint or dispute of fact or law in relation to the local government pension scheme made or referred in accordance with the Pensions Schemes Act 1993. His address is 11 Belgrave Road, London, SW1V 1RB (telephone number 0171 834 9144).
EVIDENCE RECEIVED
1. The following evidence has been received and taken into account:
a. from Mr XXX: letters dated 10 June 1998 and 10 July 1998 with enclosures and 11 September 1998;
b. from the Appointed Person: letter dated 30 June 1998 with enclosures (listed in the Department’s letter dated 6 July 1998); and
c. from XXX Council: letter dated 1 September 1998.
REGULATIONS CONSIDERED AND REASONS FOR DECISION
2. From the evidence submitted the following relevant points have been noted:
a. your contract shows contractual overtime hours as Summer 19½ hours every 3 weeks and Winter 14 hours every 3 weeks; and
b. you worked overtime additional to that shown in your contract.
3. The Secretary of State in reaching his decision has had regard to the regulations which, in his view, apply. A person’s pensionable remuneration is used to calculate their local government pension. The 1995 regulations explain what a person’s pensionable remuneration consists of (regulations D1 and C2 of the 1995 regulations). The Secretary of State has had to consider whether the additional overtime payments made to you were for contractual or non-contractual overtime. This is because under the 1995 regulations non-contractual overtime payments are not considered as remuneration (regulation C2).
4.Your main contentions are that the additional overtime was necessary, not voluntary, as the council were contractually committed to carrying out the work; and that it is only with hindsight that the council can state that no disciplinary action would have been taken if you had refused to work the additional hours.
5. The council maintain that no disciplinary action would have been taken if on your own volition you had not agreed to work the additional hours outside the agreed contractual hours.
6. The Secretary of State takes the view that for the purposes of the 1995 regulations contractual overtime is work which is required under the terms of or to fulfil the person’s contract of employment and which is performed outside normal hours of employment, that is where failure or refusal to carry out the work would result in a breach of contract which could result in disciplinary action being taken. The Secretary of State notes all your contentions including specifically those referred to in paragraph 4 above. He takes the view that although the council considered it was necessary for Cleansing Officers to start work at 6.45 a.m and to supervise work at weekends this does not necessarily mean that this is contractual overtime. This will depend on the particular circumstances of the case. In your case it is noted that the council excluded this overtime from your contract, although other overtime was included. They have confirmed that they would not have taken disciplinary action if you had refused to work the additional overtime. The Secretary of State does not consider that on the evidence available that you have convincingly demonstrated that you would have been liable to be disciplined for breach of contract if you had refused to work the additional overtime.
7. On balance the Secretary of State concludes that the additional overtime payments were for non-contractual overtime and do not count as pensionable remuneration for the purposes of the 1995 regulations.