Collective agreement on pension rights between employees and employers following restructuring of working practices and remuneration binding on individual employees.
Following the privatisation of British Rail, the new Railways Pension Scheme ('RPS') was established for the industry, governed by a Trustee (the third defendant). The employees of the plaintiff company, South West Trains (SWT) were covered by the SWT sub-section ('the Section') of the Shared Costs Section of the RPS, to which a proportion of the assets of the Shared Costs Section was transferred. A Pensions Committee representing employer and employees was set up and the fourth to ninth defendants were the first members of that committee. The pension was calculated by reference to the 'Pay' received in the last year of service. SWT renegotiated the terms and conditions of three categories of staff, drivers, revenue protection inspectors and fleet staff. The case of the drivers was typical and the case was decided on that basis. Under the old system the drivers had been paid #11-12,000 in salary (on which the pension was calculated) and another #11,000 in allowances (which were not taken into account for pension purposes). Under the new system, each driver received a salary of #25,000 pa with no significant allowances, with the pension being calculated on a notional pay of #18,000 pa. In relation to the years of service up to restructuring a driver's pay was to be treated as being #11,950 pa. The drivers voted in favour of these proposals and they were put into effect. However, when SWT and the Trustee sought the approval of the Pensions Committee for a draft Deed to change the Rules of the Section to reflect the agreement, Mr Brady (the eighth defendant) objected to the Deed on the ground that it appeared to worsen the position of the drivers. SWT sought a declaration that the drivers were debarred from obtaining pensions at a higher rate than those contained in the proposals and consequential relief, including an authorisation for the Trustee to execute a Deed amending the Rules of the Section appropriately and a declaration that the Pensions Committee ought to request the Trustee to execute such a deed. It was common ground that the Deed before the court reflected the enforceable agreement (if there was one) between SWT and the drivers. The first and second defendants represented the drivers and their dependants. The tenth defendant represented the employees who did not fall into one of the three categories affected by the restructuring, who would be adversely affected if SWT failed in the proceedings, as there would be a substantial deficit in the assets of the Section. The issues in the case were as follows; (1) On the assumption that, as a matter of common law, there was a binding pensions agreement which would otherwise be fully enforceable by SWT against the drivers, would that agreement fall foul of the Railways Pensions Scheme Order 1994 in relation to drivers who were employed by the Board on 31 May 1994 (when the 1994 Order came into force)? (2) Assuming that there would otherwise be such a binding pensions agreement, was any aspect of it invalidated by s.67 of the Pensions Act 1995? (3) Was there in fact a binding pension agreement between each driver and SWT? (4) If there were such an agreement, (a) could it be enforced and (b) could the Section be varied so as to reflect that agreement? The possible issues of estoppel, good faith or obligation to co-operate were not in the event decided.
 OPLR 249 :  Pens LR 113 : Times, January 14, 1998
William Meade (Senior Clerk)