States is accused of breaking its pension promises

An industrial tribunal got under way yesterday to hear long-running claims by States’ employees.

Two groups of police officers and civil servants are actioning the States over the changes it made to the public sector pension scheme in 2016, changing it from a final salary scheme to a career averaged revalued earnings scheme.

Much of the opening day of the hearing was given over to Advocate Simon Geall, representing 53 officers who are members of the Guernsey Police Association, who said that the States’ pension promise was given as a key part of the remuneration package it offered to employees.

Now, he said, the States was effectively suggesting that it ‘had had its fingers crossed behind its back’ at the time, which had allowed it to renege on that promise.

He took the panel, chaired by Professor Roy Lowe, through contracts of employment given to officers from 1992 to 2007, each of which set out the rules of the pension scheme.

He quoted wording which referred to the need for staff to join the scheme, the fact that they would have to pay a percentage of their salary into it, and what their benefits would be.

The contracts included expressions such as ‘you will be entitled to’, ‘you will receive’ and similar, which he said clearly showed that this was the employee’s entitlement.

There were no caveats or any references to the employer’s ability to vary the rules of the scheme.

‘It’s absolutely crystal clear that these employees were promised pension benefits calculated on the basis of the 1972 rules,’ he said.

However, the rules were subsequently changed, leading to the present dispute.

After the change, the wording of contracts was modified to include expressions that indicated these rules could be amended from time to time: ‘The contrast between these terms [and the previous ones] could not be starker,’ said the advocate.

The rule changes were made following a States debate on a policy letter from the then Policy Council.

At the time, States members were told that the proposals represented the biggest change to employees’ terms and conditions for half a century.

But Advocate Geall said there was no legal analysis of the changes proposed by the policy letter either in the report or during the debate. He said that the States had ‘railroaded’ the changes through despite there being no consultation with employees.

But even if the tribunal found that the States did have the power to amend the rules, that was all it could do – yet it had replaced the 1972 rules completely – actions that were tantamount to a breach of contract, he said.

The second applicant at the tribunal is a group of unidentified civil servants, referred to as the Group of 50, or G50, which was represented by Richard Sheldon.

He said that while many of the arguments about wording made by Advocate Geall were shared, the contracts of employment for the civil servants were slightly different to those of the police officers.

There was reference in a booklet relating to the pension rules that staff would become members of the pension scheme from 1972 ‘as amended’.

‘The G50’s position is that the pension rules... did form a part of the terms and conditions of employment,’ he said.

‘Just because the respondent [the States] chooses to change the rules, does not change the contract.’

• The hearing is taking place at the Peninsula Hotel and is open to the public. It is expected to last four days.