LOCAL GOVERNMENT PENSION APPEAL

SUPERANNUATION ACT 1972

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 6 January 2000 in which you appeal (under regulation 102 of the 1997 regulations) on behalf of Mr XXX, to the Secretary of State for the Environment, Transport and the Regions against the decision of Ms XXX, the Appointed Person in relation to Mr XXX’s local government pension scheme (LGPS) dispute with the XXX council (the council).

2.                  The Appointed Person upheld the council’s decision that the overtime payments paid to Mr XXX were not pensionable because the overtime worked was not contractual.

3.                  The question for decision: The question for decision by the Secretary of State is whether the payments received by Mr XXX for overtime from 1 April 1994 until he ceased employment in March 1996 were pensionable remuneration for the purposes of the 1995 regulations.

4.                  The Secretary of State has considered all the representations and evidence.  Copies of documents supplied by the Appointed Person were sent to you under cover of the Department’s letter of 15 February 2000.

5.                  Secretary of State’s decision: The Secretary of State has taken into account the appropriate regulations.  He finds that the payments received by Mr XXX for overtime were not pensionable remuneration for the purposes of the 1995 regulations.  His decision confirms that made by the Appointed Person.  The Secretary of State’s reasons and the regulatory provisions which he considers apply in Mr XXX’s case are set out in the annex to this letter, which forms an integral part of this decision.  He is acting judicially and has no power to modify the way the regulatory provisions apply to the facts of the case.  Having made his decision he has no power to alter it and his officials cannot discuss the case further.  The decision is binding and can only be overturned by a judgement of the High Court or the Pensions Ombudsman.

6.                  This completes the second stage of the internal dispute resolution procedure.  The Pensions Advisory Service (OPAS) is available to assist members and beneficiaries in connection with difficulties which they have failed to resolve.  Their address is 11 Belgrave Road, London, SW1V 1RB (telephone number 020 7233 8080).

7.                  The Pensions Ombudsman may investigate and determine any complaint of maladministrationor any dispute of fact or law in relation to the LGPS made or referred in accordance with the Pension Schemes Act 1993.  His address is 11 Belgrave Road, London, SW1V 1RB (telephone number 020 7834 9144).

EVIDENCE RECEIVED

1.                  The following evidence has been received and taken into account:

(a)               from you: letters dated 6 January and 24 February 2000 (with enclosures); and

(b)               from the Appointed Person: letter dated 7 February 2000 (with the enclosures copied to you with the Department’s letter of 15 February).

REGULATIONS CONSIDERED AND REASONS FOR DECISION

2.                  From the evidence submitted the following relevant points have been noted:

(a)               Mr XXX was employed by the council as a Scientific Officer (Commercial Premises)/Meat Inspector;

(b)               on 1 April 1994 the council assumed new responsibilities in relation to imported foods taken into Heathrow Cargo Terrminal.  Roster arrangements were set up for Environmental Health Officers (EHOs) and Technical/Scientific Officers to cover the new duties with weekday daytime rosters for normal working hours, overtime between 18:00 and 21:00 hours on weekdays and 09:00 and 14:00 at weekends, and for standby outside those hours.  Mr XXX took part in the roster arrangements for Scientific Officers; and

(c)               Mr XXX ceased local government employment in March 1996.

3.                  The Appointed Person found that the overtime payments Mr XXX received for service outside normal working hours were not pensionable as overtime was not contractual. Mr XXX was not obliged by contract to work overtime, staff were aware of the scope to change the roster and there was nothing to show that its flexibility was so limited as to force staff to work overtime.  There was no evidence that failure to work any overtime would have resulted in a breach of contract of employment, or disciplinary action being taken by the council.

4.                  The Secretary of State in reaching his decision has had regard to the regulations which, in his view, apply.  The Appointed Person established that when Mr XXX retired the 1995 regulations applied to the calculation of his pension.  The level of his pension depended on his pensionable pay (pensionable remuneration) in his last year with the council.  This was calculated by reference to regulation D1.  This in turn referred to “remuneration” which was defined in regulation C2.  The definition specifically excluded “payments for non-contractual overtime”.  The issue to be resolved is whether payments for overtime were contractual or non-contractual for the purposes of the 1995 regulations.

5.                  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, 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.

6.                  It is not disputed that Mr XXX’s contract of employment was not changed so as to require him to work overtime.  This is not conclusive since, in the Secretary of State’s view, contractual terms are not restricted to those specified in a documented contract of employment.  Contractual terms are those required to fulfil, not just those written into, the contract of employment.

7.                  The Secretary of State has considered Mr XXX’s job description.  He notes that the only copy submitted to him is one signed and dated 28 February 1989.  He notes that the main scope of his job was to work directly to the Environmental Health (Commercial Premises) Officers as directed for the carrying out of the day-to-day statutory duties described under Statutes and Regulations etc, that listed under the heading Duties Personally Performed was “To undertake such of his duties outside normal working hours as may be required or appropriate”.  The Secretary of State does not consider this implies that contractual overtime was required or worked.  In any event this job description pre-dates the duties in contention and the Secretary of State can draw no relevant conclusion from it.

8.                  The Secretary of State accepts that the council were statutorily required to undertake new functions in relation to imported foods from 1 April 1994. He also accepts that the resultant new duties could not have been properly carried out unless either staff worked overtime or other arrangements were made. He also accepts that in practice the new duties were carried out with staff working overtime.  This does not, in the Secretary of State’s view, mean that overtime was contractually required of any particular employee.

9.                  The new overtime was worked according to a roster.  A memorandum issued by XXX, Divisional Director of Environmental Services, dated 14 March 1994 set out the arrangements for the roster to be established with effect from 1 April 1994.  For Technical and Scientific Officers this said  “An additional roster … will also be established in order to staff the office from 18:00 to 21:00 hrs on weekdays and from 09:00 to 14:00 hrs on Saturday and Sunday”.  The relevant roster was attached to a memorandum from XXX (Divisional EHO) dated 25 March 1994 which referred to “recent discussions”.

10.              It is accepted that once an employee was on the rosters, certain formal arrangements applied for example over swapping duties, annual leave and flexi-day arrangements.  In the Secretary of State’s view, neither the existence of the overtime roster nor the accompanying arrangements demonstrate that overtime was contractual.  The question is whether participation in the overtime roster was voluntary, or whether refusal would have been regarded as a breach of contract which could have been dealt with as a disciplinary offence. The council maintain that staff were given the option of being included on the roster and could have withdrawn their name at any time or negotiated a level of involvement which suited them. They say arrangements were set up on a voluntary basis; there was no obligation to work overtime and not all staff did.  Mr XXX claims that he was not informed that he had an option not to participate in the roster.

11.              The Secretary of State accepts that it cannot be proved conclusively whether Mr XXX was aware that participation in the overtime roster was voluntary.  There is nothing in the papers setting up the roster arrangements that specifically refers to optional participation. Equally, the Secretary of State does not find that the papers show or imply that participation was compulsory and overtime obligatory.

12.              The Secretary of State notes that the council, in XXX’s (Personnel Manager) memo to Mr XXX dated 16 January 1996, refers to the degree of co-operation shown by staff.  In manuscript comments on this Mr XXX says “the airport duties could not have functioned without the goodwill and co-operation of the staff”.  In the Secretary of State’s view, this terminology implies a reliance on voluntary rather than compulsory activity.

13.              The Secretary of State further notes that the council, through their grievance procedure as well as through the first stage of Mr XXX’s pension appeal, have thoroughly investigated Mr XXX’s claims and concluded that overtime was non-contractual.

14.              The Secretary of State, taking all these factors into account, agrees with the conclusions of the Appointed Person.  He does not find any compelling evidence to show that Mr XXX was required to work overtime because participating in the roster arrangements was compulsory either because it was so specified, or because there was in practice no option, or because he was deliberately led to believe such.  Nor has any evidence been produced to show that he could have been subject to disciplinary procedures for not participating in the overtime working.  He accordingly finds the overtime non-contractual and dismisses the appeal.