Groundhog Day

SOMETIME this year, taxpayers will learn whether they face a multi-million-pound bill as a result of government ineptitude and inaction relating to the way it discharges its function as the island’s biggest direct employer. Equally unsurprising, the issue at hand involves the Superannuation Fund, the £1.6bn. pot from which it pays the pension benefits of its former staff and explains why the sums – and stakes – are so potentially huge.

That we are here goes back to at least 2010, following the unofficial industrial action by firefighters that brought the airport to a standstill, but more fundamentally to 1991. That’s when then Deputy Carol Fletcher scuppered plans to restrict the exceptionally broad definition of an industrial dispute.

The point here is the States has had ample time and opportunity to look at this key aspect of employment issues – and over the period has indeed been urged to do so – but chose not to. As the eminent KC and Lt-Bailiff Hazel Marshall said at the end of last year: ‘As no action has been taken to moderate this effect, it must be assumed that the States considers that it is in the best interests of Guernsey…’

Since the current situation is patently in no one’s best interests, we must view her judicial comments as a carefully expressed condemnation of decades of inaction by the States which has now left island taxpayers on the hook for unknown amounts of money over unquantifiable periods of time.

As you’ll have gathered, this is a complex area, which is why it was before the Lt-Bailiff, sitting alone, and resulted in a 54-page judgment from her after considering well in excess of 1,000 pages of exhibits and evidence.

The fundamental issue, however, is fairly simple – to what extent, if at all, can the States as employer impose pension scheme changes on an individual if he or she objects? Where it got more complicated is over any process there may be to express such a grievance.

For the Guernsey Police Association, the Association of Guernsey Firefighters and a shadowy bunch of senior civil servants who referred to themselves as ‘the Group of 50’, that route to protest was clear-cut. They went to the island’s Industrial Disputes Officer and invited him to register a dispute under the Industrial Disputes and Conditions of Employment Law of 1993.

Doing so would trigger an industrial tribunal, which would look at their grievances – basically that they have been short-changed by pension reforms of 2016 and subsequently – and make an award one way or another. If they ‘won’, that could apply to many other current and past States employees, substantially increasing pension and payroll costs.

So the IDO’s subsequent decision that there was indeed a dispute as defined by the 1993 law threw the States into a blind panic. Having persuaded taxpayers that the unaffordable pension scheme had been reformed, an independent tribunal could effectively wipe away such modest changes as have been negotiated and/or imposed.

As an aside, the pension scheme remains a predominantly defined benefit scheme with the taxpayer holding all the risk of making good any shortfall if the fund appears unable to meet its obligations, which are generally index-linked and so rise annually and affected by pay rises.

As a result, the sums involved in this dispute are potentially massive and the consequences hard to predict, so things got nasty. Government took its own statutory official, the Industrial Disputes Officer, to court via a judicial review to allege there was no dispute in law and so no tribunal could possibly go ahead.

In her meticulously reasoned judgment, however, Lt-Bailiff Marshall lays bare the deficiencies of the States approach in this matter, the lack of understanding of the 1993 law displayed by some of its own employment experts (not the IDO) and dismissing one of its key arguments as ‘an entirely unnatural interpretation’.

That said, the States did advance matters that the Lt-Bailiff felt should be authoritatively decided by a court of competent jurisdiction. Instead, however, they will now need to be considered by the forthcoming Industrial Disputes Tribunal. That’s because some of these central issues were not directly material to the actual question she was asked to consider in the judicial review and, secondly, because the necessary parties to any such binding determination were not before the court – a direct consequence of the legal approach taken by the States.

All this is pretty heavy going, so what does it mean? In essence this:

The States, led by the then Board of Employment, Industry and Commerce, tried to limit the definition of industrial dispute but were persuaded against doing so by former Deputy Fletcher, enabling the current ‘dispute’ to be registered. But for that, this current pension scheme challenge would not be happening.

The judicial review process used by the States to stop the challenge was misguided, bound to fail on proper interpretation of the 1993 law, while simultaneously preventing the serious judicial consideration of material points of law that do need to be resolved.

In short, it couldn’t really be worse for the taxpayer or, at the very least, in establishing clarity over contracts and the employment of States personnel.

The forthcoming tribunal, which will hear the pension disputes notified by Police and the civil service Group of 50 (the application by firefighters has been struck out), will have to consider these failures and no doubt comment on them.

However, we’ve been here before. The March 2010 Tribunal of Inquiry into the airport firefighters’ industrial action made expert, extensive and wide-ranging recommendations into industrial relations, the 1993 law, regulation of industrial action, crisis management, openness and transparency and structured collective bargaining.

In short, it was a comprehensive package of measures aimed at putting right the obvious deficiencies that led to that particularly damaging dispute and aimed at preventing such things in the future.

You’ve guessed it. All largely ignored, so another dispute flares up and another tribunal is called to sort out the things that the States hasn’t.

Welcome to Groundhog Day 2023.