Pension Losses

The EAT has given Judgment in the case of Sibbit v The Governors of St Cuthbert's Catholic Primary School (HHJ McMullen presiding) which is a case dealing with the appropriate assessment of pension loss.

The case illustrates the correct approach to be followed by the Employment Tribunal when using the Guidance to Tribunals on the assessment of compensation for pension loss, and, crucially, in making the decision as to whether the "simplified loss approach" or the "substantial loss approach" ought to be followed.

In this case, Mrs Sibbit was a teacher dismissed on grounds of gross misconduct by the Respondent.

She was 58 at the time and intended to retire within 12 months of her dismissal, meaning that she would have a further one-year's pensionable service remaining but for her dismissal.

The Employment Tribunal found her to be unfairly dismissed and awarded pension loss in accordance with the simplified loss approach.

The Claimant appealed, arguing that the substantial loss approach ought to have been followed. The EAT agreed, stating that on the facts, the correct application of Section 123 (1) of The Employment Rights Act 1996 was for the Tribunal to follow the substantial loss approach set out in the Guidance.

The EAT held that they were entitled to interfere with the Tribunal's judgment; saying it was wrong as a matter of principle for the Tribunal to have awarded pension loss in accordance with the simplified loss approach when the guidance clearly indicated that the substantial loss approach would be more appropriate.