Ian Paul McKavney v Serco Group Plc & Ors [2026] EWHC 508 (Ch)

[2026] EWHC 508 (Ch)

Case No Ch-2024-000269

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

CHANCERY APPEALS (ChD)

ON APPEAL FROM THE DETERMINATION OF THE DEPUTY PENSIONS

OMBUDSMAN DATED 30 SEPTEMBER 2024

Venue Royal Courts of Justice, Rolls Building,, Fetter Lane, London, EC4A 1NL

Date 10 March 2026

Before

MR JUSTICE TROWER

Between

IAN PAUL MCKAVNEYAppellant

(1) SERCO GROUP PLCRespondents

(2) MAGNOX LIMITEDRespondent

(3) AMEC FIRST WHEELER PLCRespondent

(4) THE TRUSTEES OF THE SERCO PENSION AND LIFE ASSURANCE SCHEMERespondent

(5) NUCLEAR DECOMMISSIONING AUTHORITYRespondent

Ian Paul McKavney appeared as a litigant in person as the Appellant for in person

Richard Hitchcock KC and Naomi Ling (instructed by CMS Cameron McKenna Nabarro Olswang LLP) for First and Fourth Respondents

Hearing Hearing date: 19 February 2026

APPROVED JUDGMENT

Introduction

[1]This is an appeal against a determination of the Pensions Ombudsman (the “Ombudsman”) dated 30 September 2024 (the “Determination”). The Ombudsman refused to uphold a complaint by the appellant, Mr Ian Mcaveney (the “Appellant”), that he had not received early payment in respect of his deferred pension benefits under the Serco Pension and Life Assurance Scheme (the “SPLAS”) when he should have done so.

[2]The Determination refers to Serco Group Plc, which responded to the original complaint on behalf of Serco Limited. Nothing turns on the difference between the two companies, and I shall refer to them both as Serco interchangeably and without distinction.

[3]The Appellant had originally been employed by Magnox Electric Ltd (“Magnox”). His contract of employment was transferred to Serco in 2005 and then from Serco to Energy Safety and Risk Consultants (UK) Ltd (“ESRC”), a subsidiary of Amec Foster Wheeler PLC (“AMEC”), in 2012. The Ombudsman rejected his claim that he was entitled to immediate payment of his benefits either when his employment was transferred from Serco to ESRC in June 2012 or following his redundancy from ESRC on 2 November 2015.

[4]The Determination considered a number of aspects of the Appellant’s complaint in respect of which the Appellant was refused permission to appeal. The part of the Determination with which this appeal has been concerned was the Ombudsman's conclusion that Serco and the trustees of the SPLAS (the “Trustees”) had correctly interpreted and applied the relevant rules. The Appellant’s challenge to this conclusion raised a point of law on which, subject to the court's permission, he was entitled to appeal pursuant to section 151(4) of the Pension Schemes Act 1993.

[5]At the hearing of the appeal, the Appellant appeared in person. He was very well-versed in the detail of what had occurred. It was clear that he felt very strongly about the way in which his claim had been dealt with, not least because it had taken a very long time to resolve. Despite the strength of his feelings, he was for the most part able to focus on the issues to which the appeal was confined and explained his arguments in a firm but clear manner.

[6]The original Respondents to the appeal were Serco, Magnox, AMEC, the Trustees and the Nuclear Decommissioning Authority. By the time of this hearing, the only active Respondents to the appeal were Serco and the Trustees. They appeared by Mr Richard Hitchcock KC and Ms Naomi Ling.

Magnox and the ESPS

[7]Until 31 October 2005, the Appellant was a member of the Magnox Section of the Electricity Supply Pension Scheme (“the ESPS”), a public sector pension scheme for the Electricity Supply Industry (“ESI”). He was also a protected employee and therefore a protected person within the meaning of the Electricity (Protected Persons) (England and Wales) Pension Regulations 1990 (SI 1990 / 346) (the “PPR”).

[8]As the Appellant was a protected employee within the meaning of the PPR, his accrued and future pension rights had valuable protections under the PPR. The PPR were designed to provide for the protection of the pension rights of employees in the electricity supply industry from the time of privatisation, the relevant date for which was 31 March 1990. Part of this protection was that the Appellant’s accrued pension benefits in the ESPS or an alternative scheme (both of which were relevant schemes for the purposes of the PPR) were protected on transfer. As was explained in the Explanatory Notes:

“The protection continues to apply when a protected employee moves within the industry and the Regulations set out the level of pension rights to be provided on transfers between companies in different circumstances. The protection will cease to apply if continuity of employment in the industry is broken.”

[9]Regulations 13, 14 and 15 of the PPR provided that, on any change of a protected employee’s employer to another employer which was also a participant (or wholly owned by a participant) in the ESPS, that new employer was obliged either to apply to participate in the ESPS (if it did not already do so) or to provide an alternative scheme for his benefit. The rights to which he was entitled under any alternative scheme were to be no worse than the future pension rights which he enjoyed immediately before ceasing to participate in the ESPS.

[10]A relevant scheme was defined as the ESPS or an alternative scheme. An alternative scheme was a scheme which provided for a number of matters including the receipt of a transfer payment in respect of the accrued pension rights referred to in Regulation 6 of the PPR and the future pension rights referred to in Regulation 7 of the PPR.

[11]The following provisions of Regulation 6 of the PPR were relevant to the protections of a protected person’s accrued pension rights on transfer to a relevant scheme:

“6(4) If a protected person shall transfer or be transferred to a relevant scheme, and if a transfer payment shall be made in respect of his accrued pension rights to that scheme, the employer providing that scheme shall procure that the rules of that scheme will secure accrued pension rights which, on the basis of good actuarial practice, are at least equivalent in value to his accrued pension rights so transferred from the former scheme. 6(5) Any new employer shall also procure that if the protected person notifies or is deemed to have notified his new employer in accordance with the terms (if any) of the relevant scheme provided by the new employer, and otherwise within two years of transferring to the new employer, that he desires to transfer his accrued pension rights to the relevant scheme provided by the new employer, he shall be entitled to transfer to that relevant scheme in accordance with paragraph (4) any accrued pension rights which are capable of being transferred.”

[12]The following provisions of Regulation 7 of the PPR were relevant to the protections of a protected employee’s future pension rights on transfer to a relevant scheme:

“(1) The rights described in paragraphs (2) and (3) are the future pension rights for the purpose of these Regulations. (2) The right of a protected employee to participate in a relevant scheme and (subject to paragraph (5)) (a) … (b) Where that scheme is an alternative scheme, to accrue pension rights on the same basis as that applicable to other protected employees in that scheme; … Provided that the pension rights referred to in sub-paragraphs (b) and (d) of this paragraph do not include any addition to or improvement of the pension rights provided by the alternative scheme in question which is made after the date upon which it is provided pursuant to these Regulations. (3) Subject to paragraph (4), the right of a protected employee, who is participating in a relevant scheme and who changes employer to an employer who provides a relevant scheme in which no protected employees are then participating, to accrue pension rights which are no worse than transfer rights.”

[13]There are a number of rules of the ESPS which related to the issues which have argued on the appeal, but two are of particular significance. The first is Rule 16(2), which provided as follows:

“16(2) The Benefits specified in and calculated as provided by Rule 14 shall, in the case of a Member who is retired compulsorily by the Employer employing him on or after attaining age 50, be paid to him if such Retirement is consequent on reorganisation or redundancy and may, in the discretion of such Employer, be paid to him if such Retirement is for any other cause.”

[14]The reference in Rule 16(2) to the Benefits specified in and calculated as provided by Rule 14 was a reference to an annual pension for life at a specified fraction of the Member’s pensionable salary for each year of contributing service and a lump sum payment. There was no reference to any discount for early receipt.

[15]As to the other defined words in Rule 16(2): i) “Retirement”, which must be compulsory for the provisions of Rule 16(2) to be engaged, was defined to mean: “the termination of employment with the Boards on or after attaining Normal Pension Age or through Ill-Health or in a case in which Benefits are paid under the provisions of Rule 16; and retires and retired have corresponding meanings” .” ii) “Service” means “unbroken employment with the Boards ….”. iii) “Employer” was defined as “a Principal Employer, a Participating Subsidiary and (in relation to any period prior to the Transfer Date where the context so requires) a Board”.

[16]The second ESPS rule of particular significance is Rule 17, the material parts of which were as follows:

“17(1) A Member who leaves Service (otherwise than with an entitlement to Benefits under Rules 4(1), 14, 15, 16 or 17A) and who at the time he leaves Service has at least one year’s Qualifying Service or in respect of whom a Transfer Value Payment shall have been received from any Personal Pension Scheme shall be granted Frozen Benefits of a value and payable on the terms set out in paragraphs (1A) to (1H). “17(1A) Benefits calculated as specified in Rule 14 shall be paid to a Member entitled to Frozen Benefits, and he shall be treated as having retired: … (c) on his reaching age 50 where he has ceased to be a Contributor on leaving Service prior to that age consequent on reorganisation or redundancy unless, with the consent of his Employer, he has waived his right on so leaving to have his Frozen Benefits payable from that age.”

[17]The reference in Rule 17(1) to a Transfer Value Payment was to an amount payable in respect of any Member who leaves Service, and then becomes a member of another scheme, requests such a payment to be made and surrenders his entitlement to benefits to which he would otherwise be entitled. As to the other material defined terms used in Rule 17: i) The phrase “Frozen Benefits” was defined in a Deed of Amendment dated 17 October 2003 as “the benefits specified in Rule 17(1) …”. ii) “Employer” had the same definition as the one which applied to Rule 16(2). As in the definition of “Employer”, the word “Service” where it was used in Rule 17(1) meant continuous employment with any of the employers under the ESPS.

[18]The grant of Frozen Benefits for which Rule 17(1) made provision was therefore expressed to arise where a Member left Service and had no entitlement to Benefits under Rule16. The relevant terms on which they were payable included treating him as if he had retired at 50, in circumstances in which he had left Service before 50 “consequent on reorganisation or redundancy”. Neither the word reorganisation nor the word redundancy was defined in the ESPS, whether for the purposes of Rule 16 or Rule

17. The meaning these words had in this context is a matter to which I will revert later in this judgment.

Transfer to Serco and the SPLAS

[19]On 31 October 2005, the Appellant’s employment was transferred from Magnox to E&TS Limited (“E&TS”), pursuant to the Transfer of Undertakings (Protection of Employment) Regulations 1981 (SI 1981/1794). On the following day, E&TS was acquired by Serco, at which stage the Appellant’s employment was transferred on to Serco itself.

[20]The Determination recorded that transferring employees were informed in a booklet produced at the time of the Magnox / E&TS transfer that Magnox and Serco had arrived at a commercial agreement which also complied with the requirements of the PPR. This was that, whether or not they decided to transfer their accrued pension entitlements into the SPLAS, the severance benefits which would be received if employees were later made redundant by Serco, would be the same.

[21]At some stage in the course of the transfer process, a new Section F was introduced for the SPLAS to apply with effect from 1 November 2005. Section F was applicable to Magnox Members, defined as members of the SPLAS who, immediately before becoming a Member, were members of the Magnox Group of the ESPS. Like the rules contained in other Sections of the SPLAS, the rules contained in Section F were described as Sub-Rules, while the generally applicable rules of the SPLAS were described as Rules or General Rules.

[22]With effect from 1 November 2005, and at his election, the Appellant’s benefits in the ESPS were transferred to the SPLAS in consideration for a transfer payment made from the ESPS to the SPLAS. On transfer, he became what was called a “Protected Magnox Member” for the purposes of Section F.

[23]It was not in dispute that the provisions of the PPR were relevant and admissible background material for the purposes of construing Section F. This is evident both from the fact that Protected Magnox Members were defined in Section F as Magnox Members who were protected persons for the purposes of the PPR and from the following parts of Sub-Rule 1:

“1 APPLICATION AND INTERPRETATION OF THE MAGNOX SECTION 1.1 Section F shall apply to Magnox Members 1.2 In respect of Protected Magnox Members, these Sub-Rules (when read in conjunction with the Rules) are intended to meet the requirements for an alternative scheme for the purposes of the Protected Persons Regulations and are subject to those Regulations. 1.3 Where an individual benefit provided to a Protected Magnox Member under the Scheme is less than the equivalent individual benefit which would have been provided to a Protected Magnox Member on the basis of the provisions of the ESPS as at 31 March 1990, the Trustees shall take such steps as are required in order to deal with the discrepancy.”

[24]Much of the argument revolved around the meaning and effect of Sub-Rules 4 and 6 of Section F. Sub-Rule 4 was entitled “BENEFITS ON RETIREMENT APPLICABLE TO GENERAL RULE 4”. This reference to General Rule 4 was a reference back to the benefits payable under the General Rules not just on a Member’s retirement on the Normal Pension Date, but also on their early retirement and on their late retirement. The apparent purpose of Sub-Rule 4 was to make specific provision for how the retirement benefits payable under General Rule 4, would apply in relation to Magnox Members.

[25]Sub-Rule4.1 was concerned with what was called “Normal retirement of a Magnox Member” applicable to General Rule 4.1, i.e. retirement on their Normal Pension Date. (In Section F the Normal Pension Age for men was 63 or 60 for pre-April 1988 employees). Sub-Rule

4.2 dealt with early retirement of an active Magnox Member as follows:

“4.2 Early retirement of an Active Member applicable to General Rule 4.2 4.2.1 A Normal Pension and Retirement Lump Sum shall be payable under General Rule 4.2.1 where an Active Member retires: 4.2.1.1 on or after his 60th birthday; 4.2.2.2 with the consent of the Principal Company on or after his 50th birthday and having completed 10 or more years’ service; 4.2.1.3 on or after age 50 where the Member is compulsorily retired from Service by his Employer due to redundancy or a reorganisation of the Employer’s business; or 4.2.1.4 with the consent of the Principal Company and the Trustees at any time due to incapacity and, where either the incapacity has not resulted from service with the employer or the trustees have agreed to the service requirement not applying, having completed 5 or more years’ Service. 4.2.2 The Normal Pension and Retirement Lump Sum payable under General Rule 4.2.2 in respect of an Active Member shall be: 4.2.2.1 … an amount equal to the Normal Pension and Retirement Lump Sum which would have been payable to him at Normal Pension Age but calculated at the date of his actual retirement. Unless the Magnox Member has reached his 50th birthday and has 10 years’ Pensionable Service or is compulsorily retired from Service by his Employer due to redundancy or a reorganisation of the Employer’s business, the Normal Pension and Retirement Lump Sum will be reduced by the Trustees on Actuarial Advice to take account of early payment in respect of the period between the date of retirement and Normal Pension Age.” 4.2.1.1 on or after his 60th birthday; 4.2.2.2 with the consent of the Principal Company on or after his 50th birthday and having completed 10 or more years’ service; 4.2.1.3 on or after age 50 where the Member is compulsorily retired from Service by his Employer due to redundancy or a reorganisation of the Employer’s business; or 4.2.1.4 with the consent of the Principal Company and the Trustees at any time due to incapacity and, where either the incapacity has not resulted from service with the employer or the trustees have agreed to the service requirement not applying, having completed 5 or more years’ Service. 4.2.2.1 … an amount equal to the Normal Pension and Retirement Lump Sum which would have been payable to him at Normal Pension Age but calculated at the date of his actual retirement. Unless the Magnox Member has reached his 50th birthday and has 10 years’ Pensionable Service or is compulsorily retired from Service by his Employer due to redundancy or a reorganisation of the Employer’s business, the Normal Pension and Retirement Lump Sum will be reduced by the Trustees on Actuarial Advice to take account of early payment in respect of the period between the date of retirement and Normal Pension Age.”

[26]Sub-Rules4.2.1 and

4.2.2 therefore provided that, where the conditions set out in Sub-Rule 4.2.1.3 are satisfied (which the Appellant contended to be the case when he ceased to be an Active Member of the SPLAS), the Active Member concerned was entitled to receipt of a Normal Pension and Retirement Lump Sum without reduction for early payment.

[27]Section F Sub-Rule 6 was entitled TERMINATION OF PENSIONABLE SERVICE and made provision for payments on termination of Pensionable Service other than on death or retirement. Both the equivalence of the title and the contents of the rule made clear that it was a version of the termination of pensionable service provisions contained in General Rule 8, adapted to meet the position of Magnox Members. The relevant parts of Sub-Rule 6 provided as follows: “6.2 If a Magnox Member leaves Pensionable Service other than on death or retirement having completed more than one years’ Qualifying Service or in respect of whom a transfer payment has been received from a Personal Pension Scheme, he shall be entitled to the following benefits: … 6.2.3 Early retirement due to redundancy or reorganisation: 6.2.3.1 Subject to Sub-Rule 6.2.3.2, where the Magnox Member’s Service ended, in the Trustees’ opinion, due to redundancy or a reorganisation of the Employers’ business, the Magnox Member will receive a Normal Pension payable during his lifetime and Retirement Lump Sum immediately (or, if later, from age 50) calculated as at the date when the Magnox Member’s Service ended (or, if later, from age 50). … 6.2.6 Transfers from the Scheme A transfer payment paid in respect of a Protected Magnox Member in accordance with General Rule 8.3 shall not be less than the Minimum Transfer.” 6.2.3.1 Subject to Sub-Rule 6.2.3.2, where the Magnox Member’s Service ended, in the Trustees’ opinion, due to redundancy or a reorganisation of the Employers’ business, the Magnox Member will receive a Normal Pension payable during his lifetime and Retirement Lump Sum immediately (or, if later, from age 50) calculated as at the date when the Magnox Member’s Service ended (or, if later, from age 50).

[28]“Pensionable Service” had a specific meaning for the purposes of Section F which was slightly different from the definition in the General Rules. It meant: “(a) any period of continuous Service during which the person concerned pays contributions to the Scheme or during which the person concerned is listed as an Active Protected Magnox Member; plus (b) any credited pensionable service provided to or in respect of the Magnox Member; plus (c) any Added Years to which a Magnox Member is entitled …” and then there was a proviso for details of the calculation.

[29]The words “Service” and “Employer” did not have a specific defined meaning in Section F, but their meaning was to be found in the General Rules for the SPLAS: i) “Service” was defined in Schedule 1 to the General Rules as permanent employment with any of the Employers and was to be deemed continuous although broken by periods of one month or less or performed partly with one Employer and partly with another. ii) “Employers” were defined as “the Principal Company and any Associated Employers which are participating in the Scheme”. The Principal Company was Serco Limited and Associated Employers were employers who controlled or were controlled by Serco Limited or a third party who also controlled Serco Limited.

[30]The relevant parts of the General Rule 8 transfer payment provisions referred to in Sub-Rule 6.2.6 were as follows:

“8.3.1 If the Member becomes a member of another Registered Pension Scheme, the Trustees may … pay a transfer payment to the other Registered Pension Scheme. For the avoidance of doubt, a Member shall have the right to request a transfer payment in the circumstances prescribed under the PSA. “8.3.2 A Member who has a right to request a transfer payment may by giving written notice to the Trustees request them to transfer part of his transfer payment to another Registered Pension Scheme willing to accept the transfer payment. For the avoidance of doubt, the Trustees have an absolute discretion as to whether they will accept a request made under this General Rule 8.3.2. … “8.5 Discharge of the Scheme from liability After the making of a transfer payment or the issue of a policy under this General Rule, the Member and any other person who would receive a benefit in respect of the Member shall have no claim under the Scheme in respect of the benefits to which the payment or policy relates and the Trustees and the Fund shall be discharged of all liability for payment of those benefits to the Member and any such person.”

Transfer from Serco to AMEC and the Appellant’s subsequent redundancy

[31]On 22 June 2012, the Appellant’s employment was transferred from Serco to ESRC, then a subsidiary of Serco, pursuant to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006 / 246) (“TUPE”). A week later, on 29 June 2012, AMEC purchased ESRC, which then ceased to be a participating employer in the SPLAS and became a participating employer in the AMEC pension scheme (the “ASPS”).

[32]The effect of Regulation 4 of TUPE (as had been the case with Regulation 5 of the earlier 1981 version of TUPE) was that a relevant transfer did not operate so as to terminate the contract of employment of any employee of the transferor. Rather, any such contract had effect after the transfer as if originally made by the person so employed and the transferee. As with the predecessor legislation, Regulation 10 of TUPE provided that Regulation 4 did not apply to so much of a contract of employment as related to an occupational pension scheme.

[33]At the time of this transfer, the Section F Magnox Members, including the Appellant, had a legal right under Regulation 6(5) of the PPR to transfer their accrued pension rights derived from Section F of the SPLAS to the ASPS, provided they notified ESRC of their desire to do so within two years of the transfer of their employment from Serco to ESRC. They were informed that this would be on a like-for-like basis and that, if they exercised the option, they would no longer have a Serco-linked pension.

[34]The Appellant chose not to take that course, either at the time of the transfer or within the permitted two-year period thereafter. The position from then was that the Appellant’s active membership of the SPLAS came to an end. He retained his accrued benefits in the SPLAS and joined the ASPS for future accruals with effect from 1 July 2012.

[35]Although not directly relevant to the questions of construction which arise on this appeal, the Ombudsman pointed out in paragraph 57.6 of the Determination that there would have been a number of factors relevant to the Appellant’s decision which would have made it reasonable for him to conclude that he was likely to be better off deferring his benefits. Those factors included the respective covenant strength and reputation of Serco and AMEC, the risk of redundancy which may have appeared low at the time and the rate of revaluation of deferred benefits appearing to be higher than the prospect of future salary increases from his employment by AMEC.

[36]The Determination also recited that, during the course of 2013, which was before the expiry of the Regulation 6(5) two-year period, the Appellant had correspondence with both Mercer (the administrators of the SPLAS) and the Trustees relating to his entitlement to receive his SPLAS deferred benefits early in the event of his redundancy. In the course of that correspondence: i) he was informed by Mercer that, as he had left the SPLAS after the age of 50, he would not now be able to draw his benefits until the age of 60, unless he qualified for ill-health retirement; and ii) he was informed by the Trustees that his deferred benefits in the SPLAS would not be paid early on redundancy from AMEC.

[37]On 2 November 2015, the Appellant was made redundant by ESRC aged 56. He received an immediate unreduced pension from the ASPS in respect of the benefits accrued since 29 June 2012, when his employer became a participating employer in the ASPS. However, he received no early payment of an unreduced pension from the SPLAS in respect of the earlier accruals. It was the position of the Trustees that an immediate pension payable before the age of 60 would only arise if he had been made redundant by Serco, and was not a benefit to which he was entitled having been made redundant by ESRC.

[38]One of the first steps which the Appellant took when he was told by the Trustees that he was not entitled to early payment of his deferred benefits in the SPLAS as a result of his redundancy from ESRC was to write to AMEC with a request that his accrued benefits under the SPLAS be transferred to the ASPS. AMEC refused that request on the grounds that it was made outside the two year window for which provision was made by Regulation 6(5) of the PPR, and that he had already left ESRC’s employment by the time he made the request.

[39]The next step taken by the Appellant was to raise a complaint under the SPLAS’ internal dispute resolution procedure. This was rejected on the basis that a deferred early retirement pension was only payable where the relevant Magnox Member left the SPLAS having been made redundant by Serco or an associate employer of Serco. It was not payable where the deferred Member left subsequent employment due to redundancy by an employer who was not an associated employer of Serco. It was said that the relevant rules reflected the provisions of Rules 16(2) and 17(1A) of the ESPS.

The Appellant’s complaint to the Ombudsman and the Trustees’ response

[40]The Appellant made a number of different but closely linked complaints to the Ombudsman. They were all directed at the question of why, following his redundancy from ERSC, he was not entitled to receive his deferred pension from the SPLAS prior to his normal pension age. The way in which the Appellant formulated that aspect of his complaints which matters most for present purposes is recited in a number of parts of the Determination, but is clearly summarised in paragraph 56.17:

“SPLAS Rules 4.2.1.3 and 6.2.3.1 required the payment of an early pension, in relation to accrued benefits under SPLAS, at onward transfer from Serco to AMEC. “This benefit replicates the original ESPS benefit, its incorporation into SPLAS being consistent with ESI statutes. It is also consistent with Serco's obligations to Magnox under clause 11 of [the Sale Agreement].”

[41]Amongst the Appellant’s other complaints were criticisms of what he called the misleading assurances that were given at the time of the TUPE transfer from Magnox to Serco. He also explained in great detail the significance of the commercial arrangements between Magnox and Serco, to ensure that the various entities to which he and the other Magnox Members were transferred continued to preserve their rights under the ESPS. The Ombudsman's determinations in relation to those matters are not the subject of this appeal, because permission to appeal on the relevant grounds was refused. However, I accept that the Appellant is sincere in his submission that they provide important context for determination of the grounds of appeal for which permission has been granted.

[42]The Trustees advanced their arguments in opposition to the construction elements of the complaint made to the Ombudsman as follows. They said, by reference to Sub-Rule 6.2.3.1 of Section F, that the Appellant’s service with Serco ended as a result of a transfer of employment to AMEC and not due to redundancy. The Appellant was subsequently made redundant by AMEC, which was not an employer or associated employer within the SPLAS. It followed that there was no obligation on the Trustees to pay him an early pension from SPLAS on redundancy from AMEC.

[43]As to those parts of Sub-Rule 6.2.3.1, which referred to service ending due to a reorganisation of the employer’s business, it was said that the concept of reorganisation in this context was not intended to expand the protection for Magnox Members to a situation in which their Service ended other than by reason of termination of employment. In particular, it was not intended to cover a TUPE transfer, the very essence of which is to provide continuity of employment in which pension rights on early retirement or redundancy transfer from the old employer to the new one. Sub-Rule 6.2.3.1 was not engaged because the Appellant’s employment was not terminated by Serco but was transferred under TUPE to ESRC and ultimately on to AMEC.

[44]The Trustees then went on to submit that the word “reorganisation” is not defined in the SPLAS rules, but is normally used in connection with termination of employment where individual job roles are no longer required, a usage which is similar to redundancy as defined under section 139 of the Employment Rights Act 1996 (“s.139”). They argued that both redundancy and reorganisation are interlinked because they each require termination of employment due to the role or function ceasing to be required. The Trustees pointed out that, if this were not to be the case, every Member who was transferred from one employer to another under TUPE would potentially be (or become) entitled to unreduced early retirement benefits, which was a very surprising result.

The Ombudsman’s Determination

[45]The Ombudsman’s conclusions on the points of construction with which the appeal is concerned were contained in paragraphs 90 to 130 of the Determination. He started his analysis with an examination of the relevant SPLAS rules (Sub-Rules 4.2.3.1 and 6.2.3.1 of Section F). He then turned to consider the effect of Rules 16(2) and 17(1A) of the ESPS, which were relevant in light of the protections to which the Appellant was entitled under the PPR at the time of the Magnox transfer.

[46]Dealing first with Sub-Rule 4.2.3.1, the Ombudsman pointed out that, in light of the Serco / ESRC TUPE transfer, ESRC was an Employer (as defined) of the Appellant from 22 June 2012 until ESRC was purchased by AMEC a week later. At that stage it ceased to be an Employer (as defined) because it was no longer a participating employer in the SPLAS. However, he considered that the question of whether Sub-Rule 4.2.1.3 was engaged turned on whether the Appellant had been compulsorily retired from Service. He considered that the word “retired” needed to be interpreted so as to have the meaning that a reasonable person with the background knowledge available to the parties would have understood it to mean when they used it. In his view, the word “retire” means “to leave one's job” or “stop working”.

[47]The Ombudsman also explained that the context within which the reference to retirement was made was one in which the Appellant left active membership of the SPLAS by reason of the transfer of his employment from Serco to the ESRC under TUPE. This was then followed shortly thereafter by the sale of ESRC to AMEC, at which point the Appellant’s active membership of the SPLAS came to an end. In light of this, he expressed his conclusion on the correct meaning and effect of Sub-Rule 4.2.1.3 of Section F as follows (see [100] of the Determination):

“Under Regulation 4(1) of TUPE ..., [the Appellant's] contract of employment with Serco was not terminated because of the TUPE transfer, his employment contract continued after the transfer as though it had originally been made between the Appellant and ESRC. The subsequent purchase of ESRC by AMEC did not affect [the Appellant’s] contract of employment with ESRC. So, I do not conclude that [the Appellant] retired, or was retired, on the termination of his active membership of SPLAS. On that basis, I find that [the Appellant] has no entitlement under SPLAS Rule 4.2.1.3, to an early pension.”

[48]The Ombudsman then considered whether Rules 16(2) and 17(1A) of the ESPS would have provided benefits to the Appellant in excess of those to which he is entitled under Sub-Rule 4.2.1.3 of Section F. He said that the Appellant had focused in particular on the ESPS Rule 17(1A)(c), which stated that a Member shall be treated as having retired on his reaching age 50 where he has ceased to be a Contributor on leaving Service prior to that age consequent on reorganisation or redundancy. He held that Rule 17(1A)(c) only applied where active membership of the ESPS ceased prior to the Member's 50th birthday. It followed that a comparison between Rule 17(1A)(c) of the ESPS and Sub-Rule 4.2.1.3 of Section F did not assist the Appellant because he was aged over 50 when his active membership of the SPLAS ended.

[49]Turning to Sub-Rule 6.2.3.1, the Ombudsman started with the question of when and how the Appellant's Service (as defined) had ended. He held that it ended when the Appellant ceased to be in permanent employment with a company that was an Employer (i.e., a company controlled by Serco). This occurred when ESRC ceased to be an Employer on its sale to AMEC. At that time, both the Appellant’s Service and the Appellant’s Pensionable Service came to an end.

[50]The Ombudsman also explained that Regulation 6(5) of the PPR required a new employer to allow a protected person to transfer their accrued pension benefits into the new scheme by giving notice within two years of joining the new employer. He said that it was a fundamental aim of the PPR to protect a protected employee from being worse off as a consequence of the transfer of their employment. Part of this protection was to ensure that a person whose employment was transferred had the opportunity to transfer their benefits to a PPR-compliant pension scheme in which their new employer participated. The protected employee would then be able to retain the same rights for their total accrued pension, as if they had remained in the ESPS.

[51]He said that Sub-Rules 1.2 and 1.3 of Section F made clear that the Magnox Section was intended to be consistent with the PPR. If the consequence of Sub-Rule 6.2.3.1 was to put a pension into payment at the time at which the Appellant’s Service came to an end, the employee would lose his opportunity for Regulation 6(5) to operate, so as to permit a transfer of his accrued benefits into the new scheme by notice given during the course of the succeeding two-years. His conclusion was that, in order for Sub-Rule 6.2.3.1 to comply with the requirements of the PPR, benefits could not be immediately payable under that Sub-Rule where the protected employee continued in employment with an employer who was subject to the PPR.

[52]The Ombudsman then applied this finding to the Appellant and concluded that his accrued pension under the SPLAS was not payable under Sub-Rule 6.2.3.1 because, although he left Service for the purposes of Section F he remained in continuous employment with ESRC. He retained the ability to transfer his accrued pension under the SPLAS to the ASPS within two years in accordance with Regulation 6(5). He pointed out that, if the Appellant had exercised his right to transfer under Regulation 6(5), he would have been entitled on his later redundancy from ESRC to an unreduced pension in respect of all his Pensionable Service.

[53]The Ombudsman explained that there were potential advantages for a Magnox Member such as the Appellant to leave his accrued pension in the SPLAS, of which the Appellant may have taken advantage when he took no steps to transfer his accrued pension benefits to the ASPS during the course of the applicable two-year period. I have already mentioned these potential advantages, but they included the possibility that his deferred pension under the SPLAS might be revalued at a greater rate than any future salary increase, and that the Appellant might have chosen to continue working for ESRC beyond his Normal Pension Date under the SPLAS while still receiving his SPLAS pension.

[54]The Ombudsman also held that it was significant that Sub-Rule 6.2.3.1 referred to the ending of the Magnox Member’s Service as opposed to their Pensionable Service. He considered that the use of the word “Service” rather than the phrase “Pensionable Service” suggested that the Sub-Rule was intended to apply where employment had ceased rather than where the relevant Magnox Member continued to be employed, but outside the Serco group. He said that this was consistent with the principle that the PPR allowed protected employees to transfer their accrued pensions to their new employer while they remained in employment, but were entitled to early payment of benefits from the age of 50 if they ceased employment due to redundancy or reorganisation.

[55]He also had regard to Rules 16 and 17(1A)(c) of the ESPS when reaching his conclusion on the true construction of Sub-Rule 6.2.3.1 of Section F. He held that Rule 16(2) only provided an early pension for a Member who was “retired compulsorily by the Employer”, but the Appellant could not be found to have been “retired” by any of the SPLAS Employers, because his contract of employment with Serco was not terminated by the TUPE transfer. It continued as if it had originally been made with ESRC and it remained unaffected by the subsequent purchase of ESRC by AMEC. These were essentially the same points that he had already made in his analysis of Sub-Rule 4.2.1.3 without regard to Rule 16(2) of the ESPS.

[56]The Ombudsman also reached the same conclusion in relation to the impact of Rule 17(1A)(c) of the ESPS. He agreed that Rule 17(1A)(c) would have applied to the Appellant if he had been aged under 50, when he left active membership of the SPLAS. But he said that, as the Appellant was past the age of 50 when his active membership ceased in 2012, he did not consider Rule 17(1A)(c) to be relevant to his analysis of Sub-Rule 6.2.3.1.

The Appellant’s criticisms of the Determination

[57]The Appellant argued that the Determination was wrong in law, because his employment with Serco had been compulsorily ended at onward transfer to AMEC and that the SPLAS rules triggered an early pension in such circumstances. At the hearing of the appeal he continued to criticise the extent to which the Magnox Members were made fully aware of their rights on transfer, but accepted that the issues for determination related to the true construction of the rules of the SPLAS, and Section F in particular. Although, as will be apparent, a number of the points made by the Appellant overlapped with one another, I can summarise them as follows.

[58]The Appellant described the SPLAS rules as being a mirror of the ESPS rules on the compulsory ending of employment, which he said were clear and unambiguous. He therefore chose to start with the ESPS rules in his explanation as to why the Ombudsman had reached the wrong conclusion. The Appellant said that an employee left Service within the meaning of the ESPS not just if he was made redundant, but also if he was transferred to another employer who was not an “Employer” (as defined) with the consequence that active membership was no longer available to the employee. This was then reflected in the language of Rule 16(2) of the ESPS, which gave the employee an immediate right to an early pension on leaving Service consequent on redundancy or reorganisation on or after the age of 50.

[59]As to Rule 17, the Appellant submitted that this provided that, on leaving Service before benefits were payable, active accruals were frozen under Rule 17(1) and then became payable on reaching normal pension age from previously frozen accruals under Rule 17(1A). If an employee were to leave Service before reaching the age of 50 due to redundancy or reorganisation, and thereby ceased to be a contributor, a pension would become payable on reaching age 50 from previously frozen accruals under Rule 17(1A)(c).

[60]The next stage in the Appellant’s argument was that the Ombudsman was wrong to adopt the approach that he did to retirement, because he ignored the fact that retirement was defined by reference to termination of employment with a participating Employer. The Ombudsman had taken his definition for retired (in the sense of not working) from his analysis of the SPLAS Rules and used it for retirement in Rule 16(2), despite the Appellant’s request that the Respondents provide the ESPS definitions. He noted that, if employment was no longer with an Employer participating in the ESPS, the employee would no longer be in Service (as defined) under the ESPS and would therefore be retired.

[61]He went on to submit that the Ombudsman’s finding that the employee’s contract of employment must be terminated, (i.e., that the employee must be made redundant in order for the right to an early pension to have arisen) was wrong, because the early pension benefit was triggered under the Rules of the ESPS in the event of a compulsory retirement consequent not just on redundancy but also on reorganisation. He said that the concept of reorganisation encompassed a situation in which a contract of employment continues, but the employee is nonetheless retired for these purposes, because their employment is “outside the scheme”, by which he meant that their employment continued with an employer who was not (or was no longer) an Employer participating in the ESPS. He said it was plain that reorganisation of the Principal Employer’s business was what had occurred in the present case.

[62]He also submitted that the Ombudsman’s definition of retirement conflicted with the language of Rule 17(1A)(c), which provided that a Member was to be treated as having retired when he has ceased to be a Contributor on leaving Service prior to that age consequent on reorganisation or redundancy. The Appellant reiterated that this showed that the status of retirement was capable of applying irrespective of whether a contract of employment continues “beyond the Scheme”, by which I took him to be submitting that, irrespective of whether Rule 17(1A) applied to him as an employee who was over 50 by the time of the Serco / AMEC transfer, retirement as a concept did not necessarily require the cessation of all employment.

[63]The Appellant also submitted that there was an internal contradiction in the Determination, because the Ombudsman appeared to have accepted in paragraph 162 of the Determination that, if he had not elected to transfer his accrued benefits from the ESPS to the SPLAS when his employment was transferred to E&TS in 2005, Rule 17(1A)(c) would have applied to him, because he had not yet reached the age of 50. Accordingly, the Ombudsman’s position suggested that for the Appellant to retain his early retirement benefits consequent to the transfer of his employment in 2005, he should not have transferred his accrued pension rights to the SPLAS. This was said to conflict with his position expressed in paragraph 141 of the Determination that the PPRs require transfer of accrued pension rights to achieve retention of benefits.

[64]The Appellant’s next point was that what he called the Ombudsman’s version of events opened up the ability of Employers to reorganise their businesses in such a way that they ended their employees’ contracts of employment, and then refused a transfer of accrued benefits for unprotected employees (which he said were the majority). He submitted that this would circumvent the redundancy provisions, which would have been a key reason why the concept of reorganisation was incorporated into the rules of the ESCS.

[65]The Appellant then went on to make the following points in relation to the interpretation of Section F of the SPLAS, most of which were essentially a slightly different way of putting the same points he had already made in relation to the ESPS.

[66]He said that where an employee is in Service (as defined), his SPLAS membership continued to be available to him if his employment was transferred to another SPLAS Employer. However, if the employee left Service, whether through redundancy or transfer to an employer who was not an Employer (as defined), active membership would not be available to the employee. This meant that, if the employee were to leave Service consequent on redundancy or reorganisation on or after the age of 50, an early pension would become payable immediately under Sub-Rules 4.2.1.3 and 6.2.3.1.

[67]The Appellant argued that the Ombudsman was wrong to hold that the concept of being retired from Service (Sub-Rule 4.2.1.3) and the concept of Service having ended (Sub-Rule 6.2.3.1) were both concerned with a situation in which the employee’s employment must have terminated, rather than the situation (as he would have it) in which permanent employment with any of the Employers had come to an end. He also said that his position would be consistent with the definition of Full-time Employment in Sub-Rule 1.4.6 of Section F which relates to a contract of employment with an Employer and with the definition of Continuous Employment in the ESPS which refers to employment with any one or more of the Employers. He therefore criticised the Ombudsman’s finding in relation to Sub-Rule 6.2.3.1 (see paragraph 123 of the Determination) that the use of “Service” suggests that the Rule was intended to apply where employment had ceased, rather than when the member continued to be employed but outside the “corporate group”.

[68]He also submitted that the Trustees were wrong to adopt the construction they did to the concept of reorganisation, which he said was contrary to the conclusion reached by the Ombudsman in relation to the sale of ESRC to AMEC. He said that what occurred at the time of the Serco / AMEC transfer was plainly a reorganisation of Serco’s business, involving as it did Serco’s exit from the nuclear field. The result was therefore compulsory retirement from Service (or the ending of Service) and the Trustees were wrong to suggest that it did not trigger an immediate right to a pension.

[69]The Appellant also relied on the fact that, in his second preliminary determination dated 13 November 2023, the Ombudsman expressed the view that the sale of Serco to AMEC on 1 July 2012 amounted to a reorganisation of the Employer’s business. He alleged that the contradictions which this view would have introduced if it were to be stated in the Ombudsman’s conclusions, were avoided by not adopting that view in his final Determination.

Correct approach to construction: the Law

[70]As Mr Hitchcock submitted, the leading case on the construction of pension schemes is the decision of the Supreme Court in Buckinghamshire v Barnardo’s

[2018] UKSC 55

[2019] ICR 495

. In the course of his judgment, Lord Hodge reiterated at [13] that, in deciding which interpretative tools will best assist in ascertaining the meaning of an instrument, and the weight to be given to each of them, the court must have regard to the nature and circumstances of the particular instrument. He then said (at [14]) that a pension scheme has several distinctive characteristics which are relevant to the court’s selection of the appropriate interpretative tools:

“First, it is a formal legal document which has been prepared by skilled and specialist legal draftsmen. Secondly, unlike many commercial contracts, it is not the product of commercial negotiation between parties who may have conflicting interests and who may conclude their agreement under considerable pressure of time, leaving loose ends to be sorted out in future. Thirdly, it is an instrument which is designed to operate in the long term, defining people’s rights long after the economic and other circumstances, which existed at the time when it was signed, may have ceased to exist. Fourthly, the scheme confers important rights on parties, the members of the pension scheme, who were not parties to the instrument and who may have joined the scheme many years after it was initiated. Fifthly, members of a pension scheme may not have easy access to expert legal advice or be able readily to ascertain the circumstances which existed when the scheme was established.”

[71]There is nothing about the ESPS or SPLAS which indicates or means that these distinctive characteristics do not apply in this case. Their existence have a number of consequences identified by Lord Hodge: i) It is appropriate for the court to give weight to textual analysis, by concentrating on the words which the draftsman has chosen to use and by attaching less weight to the background factual matrix than might be appropriate in certain commercial contracts [15]. ii) Undue technicality should be avoided. Regard should be had to the practical consequences of any construction and a purposive construction should be adopted where appropriate. Provisions should be construed to give reasonable and practical effect to the scheme [16]. iii) It is relevant that a pension scheme will have been drafted to comply with the UK’s tax regime to preserve the considerable benefits which the UK’s tax regime confers on such schemes. They must therefore be construed “against their fiscal backgrounds” [17]. iv) A focus on textual analysis in the context of the deed containing the scheme must not prevent the court from being alive to the possibility that the draftsman has made a mistake in the use of language or grammar which can be corrected by construction, where the court can clearly identify both the mistake and the nature of the correction [18].

Discussion

[72]As Mr Hitchcock and Ms Ling explained in their skeleton argument, the Appellant has accrued pension benefits in three separate schemes: the ESPS until 31st October 2005, the SPLAS from 1 November 2005 to 30th June 2012 and the ASPS from 1 July 2012 until 2 November 2015. He was entitled pursuant to the PPR to be provided with pension benefits in each new scheme to which he transferred, which were no less valuable than those he had earned in the ESPS. He was also entitled to have his accrued pension benefits transferred to the pension scheme of any new employer, a right which continued to be exercisable for two years after the date of each transfer.

[73]This is important background to the resolution of the dispute in relation to the true construction of Section F of the SPLAS, being the scheme from which the Appellant has sought early payment of his pension benefits. While the starting point must be the language of Section F, in light of the Protected Magnox Members’ rights as protected employees under the PPR, which were themselves referred to in Sub-Rules 1.2 and 1.3 of Section F, the language in which their benefits were described in the ESPS is itself of relevance to the true construction of Sub-Rules 4.2.1.3 and 6.2.3.1.

[74]The same can be said about those parts of the PPR, which granted protected employees the right to transfer accrued benefits to a new employer for a period of two-years after the date of the transfer. In the same way that it will often be necessary to construe a pension scheme against its fiscal background, it is also necessary to have regard to the requirements of the PPR in construing Section F. Sub-Rule 1.2 was explicit in stating that Section F was intended to meet the requirements for an alternative scheme for the purposes of the PPR, and thereby to give effect to the rights of the Protected Magnox Members.

[75]In my judgment, and in agreement with the Ombudsman, this context is critical to an understanding of the true meaning and effect of the two Section F Sub-Rules on which the Appellant relied (Sub-Rules 4.2.1.3 and 6.2.3.1). The same can be said of the two equivalent rules which were contained in the ESPS (Rules 16(2) and 17(1A)), given that the 1990 amendments to the ESPS Rules made explicit reference to the PPR. The PPR had therefore been relevant to the true construction of the ESPS for 15 years prior to the transfer of the Appellant’s employment to Serco in 2005, even though (as the Appellant put it) the origin of the ESPS benefits predated the PPR. Any construction of those Rules and Sub-Rules which cuts across the protections given to protected employees by the PPR is unlikely to be the correct one unless it is apparent that the language must have some other meaning.

[76]The first Section F Sub-Rule on which the Appellant relied as the source of his entitlement to early payment was Sub-Rule 4.2.1.3. The whole of Sub-Rule 4 was concerned with a Magnox Member’s benefits on retirement. The word “retirement” denotes the coming to an end of an employee’s employment, but whether that is a general cessation of work or a cessation for a particular reason such as age, conduct or extraneous circumstance will depend on the context in which it is used. That context may be determined by the language of the provision in which the word is to be found, the purpose for which the provision exists or both.

[77]All four of the paragraphs in Sub-Rule 4.2.1 described different circumstances in which a Normal Pension and Retirement Lump Sum became payable in respect of an active Magnox Member where he was no longer an employee because he had retired. Thus, the opening words of sub rule 4.2.1 described a state of retirement, while the four paragraphs which follow described the circumstance in which the state of retirement was to be treated as having been achieved.

[78]The third of these four is the one which matters for present purposes, but the way in which the other three were expressed is of some relevance. The first (Sub-Rule4.2.1.1 ) was retirement on or after the active Magnox Member’s 60th birthday. The second (Sub-Rule

4.2.1.2 ) was retirement on or after the active Magnox Member’s 50th birthday and at least 10 years Service. The fourth (Sub-Rule 4.2.1.4) was retirement on Incapacity not resulting from Service where the active Magnox Member concerned had completed at least 5 years Service. The second and fourth Sub-Rules required the consent of the Principal Company and/or the Trustees.

[79]Unlike Sub-Rule 4.2.1.3, these other three Sub-Rules made no reference to the concept of retirement from Service (as defined), or indeed from anything else. Likewise, the reference back to General Rule 4.2.1 was a reference back to the general provisions entitled “Early Retirement” which provided that, where a Member retired before his Normal Pension Date, he was entitled to elect for an immediate annual pension provided he satisfied the requirements set out in the relevant Section (i.e. in the present case Section F). In this general context, there was no reference to the concept of retirement from something that added an additional quality or limitation to the concept of stopping working without more.

[80]The potential significance of this difference is illuminated by a discussion of the meaning of the word “retire” in the judgment of Pumfrey J in Hoover Limited v Hetherington

[2002] Pens LR 297

, where the court was concerned to determine whether the word “retire” denoted a permanent withdrawal from paid work of any kind or was qualified in some other way. The conclusion reached by Pumfrey J was that it all depends on the relevant context.

[81]Thus, while the description of someone as having retired will often mean that they have given up work (or are only carrying on what might colloquially be called a retirement job), a description of someone as having retired from something is less likely to mean that someone has ceased work altogether. It may only denote that they have finally withdrawn from some office, business or employment, without necessarily saying anything about any other office, business or employment they may then undertake (see at [26]).

[82]The court must of course be very cautious before placing reliance on another court's decision as to the meaning of language used in another scheme, even where that language is very similar. To do so runs the risk of failing to construe the relevant provision in its proper context, and against all the admissible background (see e.g., the judgment of Leech J in CMG Pension Trustees Ltd v CGI IT UK Ltd

[2022] EWHC 2130 (Ch)

at [74] and [75]). Nonetheless, it is right to observe that in Hoover, Pumfrey J concluded that, where the phrase was “if a member retires from service” which meant, in the particular context with which he was concerned, no more than the cessation of employment as a director or permanent employee with one of the particular employers with which that case was concerned.

[83]At first glance, this description of a limited form of retirement might be thought to count against the Ombudsman’s conclusion that being retired meant “to stop working” without more. However, there is another relevant difference between the drafting of Sub-Rule 4.2.1.3 and the language used in the other three circumstances in which a Normal Pension and Retirement Lump Sum becomes payable under Sub-Rule 4.2.1. Each of the other three circumstances, which describe when an active Magnox Member must have retired so that a Normal Pension and Retirement Lump Sum is immediately payable, occurs other than at the instigation of the Employer, although they may require its consent. By contrast, Sub-Rule 4.2.1.3 uses the concept of “retirement” in a very particular sense as something which is done to the active Magnox Member, as appears from the language which provides that he must have been “compulsorily retired from Service” by his Employer.

[84]This adds a specific requirement that the retirement must have been at the insistence of the employer, or by a process which cannot be characterised as voluntary so far as the active Magnox Member is concerned. The phrase carried with it the involuntary termination of that Member’s contract of employment with the Employer, and echoed the language of Rule 16(2) of the ESPS, which referred to “a Member who is retired compulsorily by the Employer”.

[85]In other words, the concept of the active Magnox Member being compulsorily retired is more naturally descriptive of that Member’s employment coming to an end through the termination of his contract of employment, than it is to the change of his Employer through the TUPE transfer of his contract of employment to another employer. True it is that, in the case of a TUPE transfer, one party to the contract changes without the necessary consent of the other, but it changes in a context where there is no compulsion imposed on the employee in the sense contemplated by the Rule. He is simply faced with a change of employer in circumstances in which the relevant contract is deemed to continue not to terminate.

[86]I agree with the Ombudsman that, for this reason alone, the Appellant is unable to bring himself within the language of Sub-Rule 4.2.1.3. I also consider that the natural use of this language is further emphasised by the requirement that the compulsory retirement from Service must be due to one of two identified circumstances. The first is redundancy and the second is reorganisation, both of which were also used as prerequisites to the entitlement to early payment provided for by Rule 16(2) of the ESPS.

[87]It is clear to me that, although, when AMEC acquired ESRC, the Appellant was no longer employed by an Employer (as defined), and was therefore no longer in Service (as defined), this was not due to redundancy. It was due to a TUPE transfer, followed by the sale of the transferee to another company. The legal consequence was that the Appellant’s employment(a) continued without cessation, and

(b) is to be treated in law as having originally been made with the transferee.

[88]In contrast, redundancy is a word that in this, as in many other contexts, has a technical meaning which encapsulates the dismissal of the employee from a role for a particular reason, such as the employer intending to cease to carry on the business for the purposes of which the employee was employed (see s.139, and also see section 195 of the Trade Union and Labour Relations (Consolidation) Act 1992). That is not what occurred in this case.

[89]The second identified circumstance was reorganisation of the Employer’s business. As I have already explained, the Appellant said that this was exactly what was being done by Serco when it effected both the TUPE transfer to ESRC and the on-sale of ESRC to AMEC in 2012. He argued that the reason for this was that what occurred was part of what the Appellant called Serco’s exiting of the nuclear field, which was on any view a business reorganisation.

[90]On this issue, the Appellant was entitled to point to the fact that a reorganisation of a business can take many forms and that the phrase does not carry the same technical meaning as redundancy. That is right as far as it goes, but it seems to me that it is a phrase which, like redundancy, has to be construed in its proper context. This context includes the use of the phrase “compulsory retirement from Service” and the word redundancy in the same Sub-Rule.

[91]Mr Hitchcock submitted that the way in which Sub-Rule 4.2.1.3 was drafted was strongly indicative of the fact that, in referring to compulsory retirement due to a “reorganisation” of the Employer’s business, the drafter had in mind the type of circumstances which arose in Shawkat v Nottingham City Hospital NHS Trust (No 2)

[2001] IRLR 555

at [12] and [13]. In Shawkat, the Court of Appeal concluded that a dismissal caused by a reorganisation of an employer’s business, which led to changes in the job specification of a thoracic surgeon, did not itself satisfy the requirements for a redundancy (and therefore the redundancy payment sought by him when he was dismissed for refusing to accept them was not payable). It therefore followed that what occurred was not a compulsory retirement of the surgeon from service with his employer through redundancy, but it was a compulsory retirement from service with his employer due to a reorganisation of its business.

[92]I consider that there is force in that submission. In my view, the type of reorganisation with which the drafter of Sub-Rule 4.2.1.3 was more obviously concerned was the type of reorganisation leading to dismissal other than through redundancy with which the Court of Appeal was concerned in Shawkat. Whether this is the only form of reorganisation of the Employer’s business to which Sub-Rule 4.2.1.3 referred is affected by the impact of the Appellant’s arguments on the proper operation of the PPR to which I will revert.

[93]A number of the same points arise in relation to the true construction of Sub-Rule 6.2.3.1, the second of the SPLAS Sub-Rules on which the Appellant relied to demonstrate that he was entitled to early payment from the SPLAS in 2012. Sub-Rule 6.2 is concerned with a Magnox Member who leaves Pensionable Service other than on death or retirement, where he has completed more than one year's Qualifying Service, but in respect of whom no transfer payment has been received from another scheme. It is therefore dealing with a situation in which the Magnox Member’s Pensionable Service comes to an end for some reason other than retirement.

[94]I agree with Mr Hitchcock's submission that, although the opening words of Sub-Rule 6.2.3 describe what follows as “Early retirement due to redundancy or reorganisation”, it is plain from its context that the phrase is used simply to describe a circumstance in which Service has come to an end due to redundancy or reorganisation.

[95]The Ombudsman acknowledged that the TUPE transfer and on-sale of ESRC to AMEC meant that the Appellant’s Service ended because, when ESRC ceased to participate in the SPLAS, it also ceased to be an Employer. To that extent the Appellant could bring himself within the language of Sub-Rule 6.2.3.1. On one level, I can see the force of that argument, but there are a number of reasons for thinking that this would be a surprising result and is likely to be wrong.

[96]As Mr Hitchcock pointed out, one of these was that the consequence of this construction would be that any TUPE business transfer would lead to an immediate entitlement to an early retirement pension for the Magnox Member aged over 50. This would be the case even though his employment remained continuous under a contract which had effect after the transfer as if originally made by the person so employed and the transferee. In my view, the drafter’s intent that this should not be the outcome is also indicated by two aspects of the language, which are closely interrelated and which taken together indicate that this is not the right answer.

[97]The first is the nature of the Ombudsman’s analysis in paragraphs 119 to 124 of the Determination, in which he explained the significance of the fact that the main body of Sub-Rule 6.2.3.1 refers to the Magnox Member’s “Service” having “ended”. He held, and I agree, that this must be something different from and additional to the situation in which a Magnox Member “leaves Pensionable Service”, which is the gateway for all of the entitlements referred to in Sub-Rule 6.2, otherwise there would have been no need for the different words to be used.

[98]It is plainly correct that the Appellant left Pensionable Service at the time that ESRC was sold to AMEC (and was therefore no longer an Employer, as defined), but I do not think that, construed in its proper context, his Service also ended at the same time so as to satisfy the requirements of Sub-Rule 6.2.3.1. In my view, the drafter intended to use the contrasting phrase that Service must have ended, so as to convey something different, viz., to focus on the question of whether employment had also ceased altogether, as distinct from the situation in which the Magnox Member concerned continued to be employed but outside what the Ombudsman called “the corporate group”.

[99]I can see that this would have been clearer if the word service (without first letter capitalisation) had been used, but my opinion as to the drafter’s true intent is fortified by the second aspect of the language. The ending of Service is preceded by a description of what has occurred as early retirement “due to redundancy or reorganisation”. Those two reasons for the early retirement are then repeated in the body of the Sub-Rule as being the cause of the cessation of Service. This replicates the language and effect of Rule 17(1A)(c) of the ESPS, which in this, as on other relevant respects seems to me to be the same in its impact as Sub-Rule 6.2.3.1.

[100]In my judgment, this qualification as to the cause of cessation has a similar effect to the same language used in Sub-Rule 4.2.1.3. For the reasons I have already explained, what occurred was plainly not redundancy, nor did it amount to the limited form of reorganisation of the Employer’s business that I have already described as being the type of reorganisation with which Sub-Rule 4.2.1.3 was concerned. No reason has been advanced to suggest that the word “reorganisation” should be given a different meaning in the two Sub-Rules, and I have been unable to identify why that might be the case.

[101]Indeed, in relation to both Sub-Rules 4.2.1.3 and 6.2.3.1, the commercial context points strongly against the construction for which the Appellant contends. There are two interlinked reasons for this, bearing in mind that, when they are engaged, the entitlement arises without more and the benefits become immediately payable.

[102]The first is that, if the Appellant were to be correct, his pension would automatically have come into immediate payment at the moment he was no longer in Service with an Employer (as defined). This would mean that he would no longer be entitled to exercise his two-year entitlement under Regulation 6(5) of the PPR, to transfer his accrued pension rights to any alternative scheme which his new employer would, on transfer, be required to provide. This is an improbable result in circumstances in which Sub-Rule 1.2 of Section F is explicit that “these Sub-Rules (when read in conjunction with the Rules) are intended to meet the requirements for an alternative scheme for the purposes of the [PPR] and are subject to those Regulations.”

[103]The second is that the Appellant was entitled to exercise his legal entitlement under Regulation 6(5), to have his accrued rights under the SPLAS transferred to the ESPS as a relevant scheme provided by his new employer, ESRC. In those circumstances, it is difficult to see what reason there could have been for the SPLAS to give him an alternative ex post facto option, capable of being exercised after the two-year period, to claim early payment of his pension simply because his employment had been transferred. It had always been open to him to protect his early payment benefit against future redundancy by requesting a transfer of his accrued rights so long as he did so within two-years of the date of the TUPE transfer.

[104]I have therefore decided that the Ombudsman reached the correct conclusion in large part for the reasons he gave. Although there are some aspects of the Determination in relation to which I have adopted a slightly different analysis, the differences are largely ones of emphasis rather than substance. My conclusion is the same as the one reflected in paragraph 204.2 of the Determination. The Appellant did not become entitled to immediate payment of his SPLAS pension either on the sale of ESRC from Serco to AMEC or on his redundancy from ESRC in 2015. The appeal is therefore dismissed.