UK - A House of Lords' decision to block an appeal over pension rights by workers made redundant at tractor giant Agco has baffled lawyers.
Agco will now be able to treat nearly 1000 workers – made redundant when the US firm acquired Massey Ferguson and closed down its Coventry factory – as early retirees and give them 40% of their full benefit entitlement.
But lawyers say the appeal block leaves a number of legal issues unclarified.
Hammonds partner Andrew Powell said: “The House of Lords decision to block the appeal is baffling. It seems to me that there are still a few pertinent issues to resolve here over what constitutes early retirement. Bearing in mind last year’s Appeal Court ruling fell on a decision split two-to-one, this does not seem like a satisfactory resolution.”
Law firm Denton Wilde Sapte senior pension solicitor Nick Sargent said it was a great shame the House of Lords would not be adjudicating the appeal.
He said: “The point has wide significance, as scheme rules frequently make no explicit provision for early retirement on redundancy – and certainly not as to whether a distinction arises between voluntary and compulsory redundancy.”
The Transport & General Workers’ Union – which represents the former workers – insisted that counting redundant workers as retired for the sole purpose of reducing benefits was a travesty.
National organiser Peter Booth said: “We always held on to the belief that people who had to leave would be entitled to a full pension. It may be the law but it doesn’t feel like justice. Our members now face a bleak future with many having lost thousands.”
Norton Rose lawyer Lesley Browning said the case represented a serious lesson for trustees to ensure the wording of scheme rules were clear and concise.
She said: “They need to make the language much tighter. If Agco’s rules had said ‘on retirement, including redundancy’, then there would have been no case to answer. But because the wording was deficient it has had to go through this long process.”
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