Calculating Pension Losses

[Thanks to Ed McFarlane of Deminos HR for preparing this case summary]

May an employment tribunal adopt a flexible approach to calculating pension loss, for example by using different multipliers to those annexed to employment tribunal pension loss guidelines?

A qualified 'yes', provided it gives cogent and credible reasons for so doing, says the EAT (Langstaff J presiding) in an obiter Judgment on a remedy appeal in Chief Constable of West Midlands Police v Gardner.

The EAT heard the remedy appeal despite overturning the Respondent's liability, and gave guidance on the approaches to calculating pension loss.

The employment tribunal calculated pension loss on the basis of a 'substantial loss' approach, but by using different multipliers from those in the 2003 booklet Compensation for Loss of Pension Rights Employment Tribunals 3rd Edition.

The Claimant's appeal criticised what it termed a 'pick and mix' approach to calculating pension loss. The EAT held that the tribunal had not committed an error of law, but noted that when a tribunal departs from an established approach, it must do so for good reason and state what its reasons are. The EAT stated that it would not recommend straying from established approaches "...except where it is plain that the interests of justice require it...".

The Judgment contains a useful discussion of the various approaches to pension loss and compensation.