Edwards v Minister of Finance and Others

• Jurisdiction: Bermuda
• Judgment Date: 05 April 2013
• Date: 05 April 2013
• Docket Number: Civil Jurisdiction 2012 No 88
• Court: Supreme Court (Bermuda)

2013 Bda LR 24

In The Supreme Court of Bermuda

Civil Jurisdiction 2012 No 88

In the matter of the Public Service Superannuation Act 1981

Between:

Hiram Edwards

Plaintiff

and

The Minister of Finance

The Attorney General

And

The Minister of Environment, Planning and Infrastructure Strategy

Defendants

Mr K James for the Plaintiff

Ms S Dill for the Defendants

The following cases were referred to in the judgment:

Paponette v AG of Trinidad and TobagoELR [2012] 1 AC 1

Rowland v Environment AgencyELR [2005] Ch 1

Stretch v United KingdomHRC (2003) 38 EHRR 196

R v Home Secretary, Ex parte DoodyELR[1994] 1 AC 531

Re BarrettoUNK [1994] 1 All ER 447

Pepper v HartELR [1993] AC 593

R v Central Valuation OfficerUNK [2003] 4 All ER 209

Thomas v Attorney-GeneralUNK (1981) 32 WIR 375

Junos v Minister of Tourism and TransportBDLR [2009] Bda LR 26

Rolls Royce v Unite the UnionWLR [2010] 1 WLR 318

Logic Communications Ltd v Minister of Telecommunications and TeleBermuda International LtdBDLR [2000] Bda LR 23

Pension rights — Temporary employment following retirement — Whether full time or part time — Legitimate expectation — Overpayments of pension — Duty of fairness — Whether amendment to legislation has retroactive effect — Compulsory retirement — Revocation of appointment — Declaratory relief

JUDGMENT of Hellman J

Introduction

1. By an originating summons dated 7^th March 2012, and amended on 26^th June 2012, the Plaintiff, Hiram Edwards, seeks declaratory relief from the First through Third Defendants with respect to various issues, including pension payments which he claims are due to him under the Public Service Superannuation Act 1981 (‘the 1981 Act’).

2. The following issues arise:

• i. Whether the Plaintiff was re-employed in the post of temporary Assistant Telecommunications Inspector on a full time or alternatively a part time basis.

• ii. Whether, if the Plaintiff was re-employed in that post on a full time basis, he nevertheless had a legitimate expectation that he would be treated as a part time employee for purposes of his pension rights.

• iii. Whether, subject to issue (4) below, the deductions made to the Plaintiff's pension while he was re-employed as a temporary Assistant Telecommunications Inspector were lawful.

• iv. Whether the amended version of section 25(1) of the 1981 Act applied to the Plaintiff.

• v. Whether the compulsory retirement age contained in section 22(2) of the 1981 Act applied to the Plaintiff.

• vi. Whether the Plaintiff's appointment as Acting Director of Telecommunications was lawfully revoked.

3. The First Defendant is the Minister of Finance. Issues 1 through 4 concern decisions made by the Accountant General, who is answerable to the Minister.

4. The Second Defendant is the Attorney General. He defends issue 6 on behalf of the Cabinet Office.

5. The Third Defendant, the Minister of Environment, Planning and Infrastructure Strategy, is joined because the Ministry includes the Department of Telecommunications, in which the Plaintiff was re-employed. He defends issues 1, 2, and 4 through 6. At the time of the Plaintiff's re-employment, that Department was part of the former Ministry of Environment Planning and Infrastructure Strategy.

6. For ease of reference, in this judgment I shall simply refer to ‘the Defendants’ when referring to more than one Defendant.

7. I have had the benefit of both affidavit and oral evidence from the Plaintiff, and from various senior civil servants on behalf of the Defendants. I have also been ably assisted by submissions from counsel, Mr James for the Plaintiff and Ms Dill for the Defendants, for which I am grateful.

Whether the Plaintiff was re-employed in the post of temporary Assistant Telecommunications Inspector on a full time or alternatively a part time basis

8. On 26^th May 1996 the Plaintiff retired from the Bermuda Police Service, in which he held the rank of inspector. He had served in the police for more than 33 years. For more than 20 years he was assigned to the Police Radio and Telecommunications Department, where for a number of years he was officer in charge. Section 19(1)(a) of the 1981 Act provided that as he had contributed continuously to the Public Service Superannuation Fund (‘the Fund’) for more than 8 years, and had completed 25 years' service, he was entitled to a pension upon his retirement from public service. This was paid to him monthly.

9. On 1^st July 1997 the Plaintiff was re-employed by the Government of Bermuda as an Assistant Telecommunications Inspector. This was a temporary relief appointment on a fixed term contract while the Department of Telecommunications sought a permanent employee. A temporary relief employee is an employee who is working for the Government in an established post that has not been filled on a permanent basis. The initial term of the contract was 3 months. But the appointment was renewed from time to time, with the result that the Plaintiff remained in the position for a number of years.

10. A crucial question is whether the Plaintiff's temporary employment was on a full time or alternatively a part time basis. This is because of the terms of section 25 of the 1981 Act. The section has since been amended. But the relevant part of the version that was in force while the Plaintiff was employed as an Assistant Telecommunications Inspector read as follows:

‘25 (1) If a pensioner is re-employed in the public service, his pension shall cease on his beginning to receive the salary of the office in which he is re-employed if such salary is equal to or greater than the salary of the office formerly held by him at the date of retirement from or ceasing to be employed in such former office; and if it is less than the salary of such former office, then no more of such pension shall be paid to him than that which, together with the salary of his new office, is equal to the salary of his former office.

(2) Notwithstanding subsection (1) where a pensioner has been or is re-employed on a part time or casual basis because it is desirable in the public interest to have his service at the disposal of the Government or Government Board, payment of his pension shall not be suspended.’

11. Section 2(2) of the 1981 Act provides that:

‘Reference to a person being re-employed on a part-time basis shall be construed as a reference to employment where the person gives personal service of at least twenty hours a week; and a reference to re-employment on a casual basis shall be construed as a reference to employment of an occasional nature.’

12. The Plaintiff maintains that he was employed on a part time basis. His evidence was as follows. In the summer of 1997 he got a call from the Director of Telecommunications, Edward Pitman, who had worked with him previously, about a position. He came in and spoke to Mr Pitman about the prospect of being given a job on a part time basis. The issue of continued pension payments was discussed. Mr Pitman called him back and said that he could give him a job part time with his pension remaining. The Plaintiff understood this to mean that he would continue to receive his pension in full. The Plaintiff's evidence of this conversation was not directly challenged, although he accepted in cross-examination that the conversation was not documented.

13. The Plaintiff was not supplied with a written contract for his initial 3 month period of employment. But he was given a copy of an internal pro forma document headed ‘Government of Bermuda Appointment/Change Form’ (‘the Appointment Form’). The Appointment Form has been completed to show that the Plaintiff was to be paid weekly and employed on a part time basis. It is endorsed in manuscript with the remarks: ‘Receives Government Pension / Do not deduct GEHI [Government Employee Health Insurance] / Pay wage 1/7 to 18/7.’ The Appointment Form, which was marked ‘CC: AUDITOR’, was dated 18^th July 1997 and signed by Mr Pitman. The Plaintiff relies on this document as further evidence that he was employed part time.

14. The Plaintiff continued to receive his pension in full until May 2000, 152 weeks after he took up his temporary appointment. He submits that this is consistent with his employment being part time.

15. The Defendants, on the other hand, maintain that while working as an Assistant Telecommunications Inspector the Plaintiff was at all material times employed on a full time, albeit temporary, basis. I heard evidence on this point from Gershon Gibbons. He is a Compensation and Benefits Manager in the Accountant General's Department and is responsible for the proper administration of payroll for all Government employees. He stated that the Department's records show that throughout this period the Plaintiff worked full time hours, ie 35 hours a week, and was paid accordingly.

16. Mr Gibbons said that the statement in the Appointment Form that the Plaintiff was employed part time seemed therefore to be an error. He surmised that the error had come to light in May 2000 as the result of an annual internal audit, and that it had not come to light sooner because the auditors only audited a sample of payments made to employees each year.

17. The Plaintiff agreed that on average he worked a 35 hour week, but maintained that these hours were consistent with his position being treated as part time. This was because his terms and conditions were inferior to what they would have been if he had been employed on a permanent full time basis. Eg he was paid at a lower grade than that at which the permanent position had been advertised; he did not receive any annual increment in the value of his pension; he was not eligible to make further employee contributions, or receive further employer contributions, to his pension; and he lacked the job security which came with a permanent full time position.

18. As to the other entries on the Appointment Form, the...