British trade unions lose appeal over $24 billion cost of pension reform

LONDON (Reuters) -Two British trade unions on Wednesday lost an appeal over changes to public sector pensions they argued allows the government to unlawfully pass the 19-billion-pound ($23.7 billion) cost of pension reforms on to workers.

The Fire Brigades Union (FBU) and the British Medical Association (BMA) said Britain’s finance ministry was effectively making members of newer pension schemes foot the bill for its own mistake.

A judge at London’s High Court had dismissed the two unions’ case in March last year. The Court of Appeal dismissed the unions’ appeal against that decision on Wednesday.

The unions’ legal action followed a 2018 court ruling that the exclusion of younger staff from more beneficial, “legacy” pension schemes, as part of wider government reforms, amounted to unlawful age discrimination.

That ruling landed the government with an estimated 17-19 billion pound bill for future pension payments to around three million public sector workers.

In 2021, the government included that cost in the valuation of public sector pension schemes – without which, the unions said, scheme members’ benefits would have increased or their contributions would have been reduced.

The FBU and the BMA took their legal challenge to the Court of Appeal in February, arguing the government had failed to consult on the changes and that the effects were unlawfully discriminatory.

But Judge Elisabeth Laing said in a written ruling that there was no “unambiguous promise of consultation” and that “the indirect discrimination against younger members of the new schemes was justified”.

A spokesperson for Britain’s finance ministry welcomed the ruling, which they said “will ensure that the costs of public service pension schemes continue to be allocated fairly between scheme members and taxpayers”.

BMA pensions committee chair Vishal Sharma called on the government to “take responsibility for its own mess”.

“We firmly believe that affected doctors and other public sector workers must not pick up the bill for the government’s unlawful discrimination and we will be considering our next steps,” he added.

FBU General Secretary Matt Wrack also said the union was considering its next steps.

($1 = 0.8029 pounds)

(Reporting by Sam Tobin; editing by Sarah Young, Sachin Ravikumar and Jane Merriman)