BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £1, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] | ||
The Judicial Committee of the Privy Council Decisions |
||
You are here: BAILII >> Databases >> The Judicial Committee of the Privy Council Decisions >> Antigua Public Utilities Authority v. Edwards (Antigua and Barbuda) [2003] UKPC 64 (02 October 2003) URL: http://www.bailii.org/uk/cases/UKPC/2003/64.html Cite as: [2004] Pens LR 303, [2003] UKPC 64 |
[New search] [Printable RTF version] [Help]
Antigua Public Utilities Authority v Edwards (Antigua and Barbuda) [2003] UKPC 64 (02 October 2003)
ADVANCE COPY
Privy Council Appeal No. 35 of 2002
Antigua Public Utilities Authority Appellant
v.
Malcolm Alphonso Edwards Respondents
FROM
THE EASTERN CARIBBEAN COURT OF
APPEAL OF ANTIGUA AND BARBUDA
---------------
JUDGMENT OF THE LORDS OF THE JUDICIAL
COMMITTEE OF THE PRIVY COUNCIL,
Delivered the 2nd October 2003
------------------
Present at the hearing:-
Lord Hoffmann
Lord Millett
Lord Scott of Foscote
Lord Walker of Gestingthorpe
Sir Christopher Staughton
[Delivered by Lord Walker of Gestingthorpe]
------------------
"On the satisfactory completion of the contract, you will be eligible for a gratuity at the rate of 12½% of your basic salary."
It was conceded that this was in practice understood as 12½% of aggregate salary earned during the term of the contract, not annual salary, and Mr Edwards received a gratuity on that basis at the end of his initial two-year term. It is also common ground that Mr Edwards, as a public officer on a fixed-term contract, would not have been entitled to a pension under the statutory scheme for public officers (although he would be entitled, and indeed is now entitled, to a modest pension under social security legislation).
"In view of the recent amendments to the second schedule of the Public Utilities and Port Authority Legislation, and in view of certain public pronouncements made by individuals purporting to be on behalf of the Public Service Association, I wish to indicate to you fully Government's policy regarding the staffing of both Statutory Authorities.
All Public Servants i.e. Civil Servants or members of the establishment will be seconded with their permission to various departments in which they now work; as seconded officers they will of course, continue to be members of the Public Service for all purposes, i.e. their emoluments, disciplinary proceedings and their pension schemes.
At a later date, those persons who elect voluntarily to leave the service and work for either of the Authorities shall have their service with the Authority deemed pensionable service, and this will be gazetted.
Government wishes to stress that Government Departments forming a part of the Statutory Authorities are not being handed over to private enterprise but are in fact genuine authorities wholly owned by the Government and people of the State, and will be operated by a Statutory Board answerable to a Minister of Government and thus through him to Parliament. Stanley Consultants, for a fee, will provide management services on contract, and will not have shares in or benefit from any profits of either Authority. To say, therefore, that these departments are being handed over to private enterprise and therefore changing the status of workers is false and calculated to mislead.
Government is satisfied that with your goodwill and cooperation this turnover can be effected with a minimum of problems and without any loss of status to public servants, and indeed feels that a wide range of benefits will arise not only to Public Servants and non-established staff, but to the State as a whole."
It is common ground that this letter was sent to all the staff affected by the changes, whether or not they were prospectively entitled to public service pensions. It was sent to and read by Mr Edwards. The letter's evident purpose was to reassure the staff to whom it was sent and to dispel doubts and rumours.
"2. I forward herewith individual letters addressed to the following officers of the Electricity Division who exercised their option to be seconded or to turn over to the Public Utilities Authority:-
[There follow two names of those who elected for secondment, and 26 names of those who elected for transfer, not including the name of Mr Edwards].
3. A further communication will be addressed to you with regard to the officer employed on contract.
4. There is no record in this office of any further options from established officers. Grateful to receive the options of the remaining officers of the Electricity Division in order that their positions may be clarified."
"I am to inform you that consequent upon a Government decision, the Public Service Commission has agreed that as you have signified your intention to be employed by the Public Utilities Authority, you be officially released from your appointment as [job description in the public service] with effect from 1st January, 1974.
2. Government has also confirmed that your service with the Public Utilities Authority will be pensionable and such pension rights will not be less favourable that those enjoyed with Government.
3. Your rights and other benefits will be borne by Government up to and including 31st December, 1973."
"The Authority shall establish and maintain a contributory pension (and medical insurance) fund for the benefit of all staff members. Each staff member shall contribute to the fund an amount equal to the contribution made by the Authority."
Mr Edwards' office was at one stage engaged in obtaining quotations for an insured scheme, but (as already mentioned) to this day no funded pension scheme has been established by the Authority.
N x M
800
(where M is the employee's monthly salary and N is his or her total service in months) and the gratuity was fifty times the monthly pension. Their Lordships were told that these benefits have in practice been paid (on an unfunded basis) out of central government funds, although there seems to be no legal basis for this.
"As you know, the issue of pension provision for APUA employees has been discussed for quite sometime. When the anomaly was realised, the former General Manager, Mr. M. Woodroffe, set the wheels in motion for the introduction of an APUA pension scheme. To this end, a draft proposal was circulated to the unions and senior management staff as a basis for discussion. This document is still being studied. Meanwhile, we have through your office requested proposals from selected insurance companies for an APUA contributory pension scheme. To date, the process has not been finalised. The reality of the situation now, is that APUA does not have a pension scheme. This is regrettable and really emphasises the urgent need to put a scheme in place.
I wish to advise therefore that you are not entitled to an APUA pension, however provision has been made under the Social Security Scheme. Under the circumstances, I am recommending that an ex gratia payment be made personal to you in an amount equivalent to one (1) year's salary."
"You must know or should at any rate know, at the time of vesting of the APUA, all pre-vesting rights of employees who had previously worked for either The Electricity Division, The Telephone Division or The Water Division of Government were transferred. Letters signed by the then Minister of Public Utilities and given to each employee stated that retirement benefits would be no less favourable to transferred employees, than those benefits would have been to those employees had they remained with Government. As you are perfectly well aware, this practice has been in effect for the last twenty years."
"It was an express condition of the Plaintiff and the other seconded employees that those persons taking up permanent employment with the Defendant would take with them all existing retirement benefits as government employees and that any retirement benefits introduced by the Defendant subsequently would be no less favourable than those of the government from whose employment they had been transferred, a letter to this effect was signed by the then Minister of Public Utilities and Communications and delivered to all transferred employees."
"… since at the turn over date to the Authority the Plaintiff was in actual fact an officer on contract in the employ of the Government, he would, as a result have had no accrued or existing retirement benefits to take with him to the Authority as a government employee at that point in time. Nor could he reasonably have expected that any retirement benefits by the Authority would be no less favourable than those enjoyed by other employees of the government who had transferred to the Authority, since in actual fact he would have no such pensionable emolument or entitlement in the first place."
The judge described the Authority's case as morally indefensible but legally unassailable. At the end of his judgment he accepted that the general practice in the Authority was for staff to retire at the age of 60. This disposed of Mr Edwards' alternative claim for wrongful dismissal, which is no longer an issue in the case. The judge declined to order costs against Mr Edwards.
"Cabinet confirms that Service with the Public Utilities Authority and the Antigua Port Authority will be pensionable and that such pension rights will not be less favourable than those presently enjoyed with Government."
It would be quite unrealistic to treat the Minister's letter of 3 July 1973 (as the judge seems to have done) as analogous to an ineffective pre-incorporation contract, or as a non-binding letter of comfort. It was intended to be binding and to be acted on. It was acted on by the letters subsequently sent out by the Chief Establishment Officer.
"Q. What was your understanding would be your position with regard to your retirement benefits following upon your secondment?
A. All employees of government were initially seconded to APUA and my understanding regarding my retirement benefits on such secondment was that they would be no less favourable than they would have been had if we stayed with Government and the formula used for calculating benefits would be the same as used by the Civil Servants under Cap. 210."
Mr Dingemans submitted that that (and another passage, less precisely recorded, in the evidence of Mr Edwards) was inconsistent with the case that Mr Edwards is now putting forward, because Mr Edwards was on contract as a public officer and so had no pension rights. That is the point which Georges J regarded as crucial. But if Mr Edwards had stayed as a public officer he would not have expected to continue as an electrical engineer on a fixed-term contract for the rest of his working life. Becoming entitled to retirement benefits is a long-term process, and the comparison between public service and employment with the Authority cannot realistically be frozen at a single moment of time, that is immediately before the "turn over" on 1 January 1974.