Non-pensionable bonuses, discrimination?

Case ref: 3.5/ August 2004

Summary of case

Our member Mr X has had his last 3 years pay increases paid in the form of non pensionable bonuses. He has reached the top of his scale and as such further advances payable to him are not consolidated into his salary.

Advice requested

Is there any prospect of pursuing any claims on the grounds of age or sex discrimination.

Key advice provided by Thompsons

The full text of the advice letter for this referral is highlighted below: 

"Your member finds himself in this position as he has been a civil servant for 35 years and is an older employee. He wishes first of all for me to assess his chances in a discrimination claim. At this time, there is no law preventing age discrimination, if indeed that has happened here. Thus the Employment Tribunal has no jurisdiction to hear such a claim.

"If your member is still in the same position when the legislation is brought in, he may wish to have his claim reassessed at that time. In addition, I would not assess any claim for sex discrimination on this basis as having greater than 50% chance of success.

"Your member would have to compare himself to lower paid women who would ultimately endure the same payment process as your member should they work for the civil service for long enough. Unless there is a woman in exactly Mr X's position on the pay scale who is not receiving non-consolidated bonuses by receiving pensionable salary instead, our arguments are weak. 

"I have not seen your member's contract, but unless it states he is entitled to a pensionable increase in his salary every year until he retires which I very much doubt, he will not have a claim for breach of contract. I do not think there is a claim here either that the implied term of mutual trust and confidence has been breached. There is no right to a pay rise at all and the fact that your member does at least receive the bonuses each year despite his salary scale position suggests or could suggest to a court goodwill on the part of the employer.

"It is not insignificant either that pay increases are negotiated for the members by the union and are accepted by way of democratic vote. There is an argument that this incorporates them into the contract and that they are mutually agreed therefore there cannot possibly be a breach. 

"Finally, I cannot see how there could possibly be a breach under the Human Rights Act especially in view of the fact that there is no right to a pay rise. Your member argues that his bonuses not being pensionable affect his family financially, however, if that were a breach so would every termination of employment situation. The Human Rights Act generally is not concerned with financial matters of this nature."

Legal department comment

Of particular significance here is the point that at present Tribunals have no jurisdiction to hear claims on the grounds of age discrimination and will only be able to do so when legislation is brought in. Also that unless the contract says differently, there is no prospect of pursuing a breach of contract claim for a pensionable pay increase.

Finally, the comment that the Human Rights Act "generally is not concerned with financial matters of this nature" may be relevant advice for wider casework.

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