Gurkha defeat in claim for equal pension rights

18 October 2010 by Matthew Hill

No victory this time

R (British Gurkha Welfare Society and ors) v Ministry of Defence [2010] EWCA Civ 1098 – read judgment

The Court of Appeal has rejected a fresh attempt, based on Article 14 of the European Convention on Human rights (anti-discrimination), to obtain equal pension rights for Gurkhas who served in the British Army before 1997.

The long-running campaign for Gurkha rights has been highly publicised and successful, but it has not ensured equality of treatment in respect of pensions. The MoD continues to calculate  accrued pension rights at a lower rates for Gurkhas than for other soldiers in respect of service performed before 1997, the date on which the majority of Gurkhas ceased to be based in Hong Kong and were instead moved to the UK.

The rationale for this difference in treatment is that prior to 1997, when the Gurkhas were based in Asia, there was an assumption that on retirement they would return to Nepal. As the cost of living was lower than in the UK, a lower pension was paid; however, the pension would be paid earlier and Gurkhas enjoyed other rights that were not available to other soldiers in the British Army (e.g. longer leave periods). After 1997, when most Gurkhas were moved to the UK, the assumption of a return to Nepal was no longer valid. Gurkhas developed social and family links in the UK and increasingly chose to remain on retirement. It was this that led to changes in the Gurkhas’ immigration status and pension rights, and in particular changes to the Immigration Rules in 2004, the Gurkha Offer to Transfer (GOTT) of March 2007 and the Armed Forces (Gurkha Pensions) Order 2007.

Unsuccessful attempts have been made on behalf of Gurkhas who served or retired before 1997 to challenge the legality of their pension arrangements. Two cases are of particular note. In R (Purja and ors) v Ministry of Defence [2003] EWHC 445 (Admin) and [2003] EWCA Civ 1345 challenges were made on the grounds of irrationality and discrimination on the basis of nationality, contrary to Art 14 ECHR; both were dismissed. In R (Gurung) v Ministry of Defence [2008] EWHC 1496 (Admin), the grounds of review were irrationality and age discrimination.  Ousley J again dismissed the claim, and permission to appeal was refused on paper by Toulson LJ.

The claimants in the present case comprised  two groups of former Gurkhas; the first had retired before 1997, while the second had served both before and after that date. The claimants sought to distinguish the earlier negative judgments by arguing that Purja preceded the changes to the Gurkhas immigration status that occurred in 2004 and did not consider age discrimination, and that Gurung was wrongly decided.

At first instance the claimants advanced several grounds of challenge (including irrationality and s.71 of the Race Relations Act 1976), but failed to persuade Burnett J  on any of them. At the Court of Appeal their argument was based solely on Article 14 ECHR, which provides that  Convention Rights should be secured without discrimination “on any grounds such as [inter alia] sex, race … national or social origin … birth or other status”. It was agreed that the right in question was the (qualified) right to enjoyment of property under Article 1 of the First Protocol. The claimants argued that the MoD was discriminating against them on the basis of both race and age.

Dismissing the Appeal, the Court of Appeal first considered the relevant test for discrimination in Art 14 cases. At the time of Purja this had been a set of questions set out by Brooke LJ in Wandsworth LBC v Michalak [2002] EWCA Civ 271, [2003] 1 WLR 617, [20]. However, this approach has subsequently been criticised as too formulaic, and a single question test is now preferred, namely: “Is there enough of a real difference between X and Y to justify different treatment?” [see R (Carson) v Secretary of State for Work and Pensions [2005] UKHL 37, [2006] 1 AC 173, per Lord Hoffman at p.186H]. Burnett J held, and the Court of Appeal agreed, that nothing in the present case turned on these differences of formulation, with Maurice Kay LJ (giving the only reasoned judgment, which was agreed by his colleagues) also finding that the same decisions would have been reached in Purja if Lord Hoffman’s single question had been put.

In respect of the age discrimination claim, Burnett J did not treat this as a “suspect” ground. It was argued on behalf of the claimants that this was an error, but as the Maurice Kay LJ pointed out, they were unable to identify any domestic or Strasbourg authority to support their position. In any event, as Burnett J had found that a higher degree of justification was required for nationality than age discrimination, if the former could not have been made out then nor would the latter.

The Court of Appeal next considered the width of the margin of appreciations that would be left to the state in this area. The claimants argued that this should be narrow as the issue was properly seen as one of employment rights, rather than as a question of social and economic policy. The Court did not agree, finding that the fact that the Gurkhas had been serving soldiers under the Crown was part of the context in which justification fell to be assessed, but did not alter the (generally broad) margin of discretion left to states when considering the equitable distribution of public resources.

Turning to the classes of claimants before them, the Court held that those who had retired before 1997 had undertaken their entire service before the move from Hong Kong, and thus at a time when “the assumption and reality were retirement to a life in Nepal”. As such – and as was held in Purja – the Gurkha and British soldiers were not in analogous situations, and hence there was no basis for a claim of discrimination when comparing their respective pension positions. The Court of Appeal held that as this was so on the basis of racial discrimination, it would also have been the case for age discrimination had this been a matter considered in Purja.

In respect of the Gurkhas who served both before and after 1997, the Court of Appeal dismissed three arguments put forward by their representatives. First, it held that the government had been entitled to change the rules on pension entitlement at various points, and that an individual’s entitlement was defined by the rules at the point of retirement [ECtHR application decision Neill v UK 56721/00 applied]. Second, the Court rejected criticism of Burnett J for “trading-off” the detriment of the level of the Gurkhas pension against the benefits that Gurkhas gained on the basis of their nationality and regiment (i.e. an earlier pension, longer leave). This approach was “simply a means of identifying differences between allegedly comparable situations and is a permissible consideration of matters relevant to justification”. Finally, the Court held that Burnett J has not conflated irrationality and justification in his reasoning.

The Court of Appeal therefore dismissed the appeal on a number of substantive grounds. In short, they were not persuaded that comparing a Gurkha with other British soldiers when it came to pension entitlement was a like-for-like comparison. This means that Gurkhas who served before 1997 – including those who retired in the UK – will continue to have lower pension provisions than both their non-Gurkha contemporaries and those Gurkhas whose service occurred entirely after 1997. The repeated judgments to this effect, and the strong terms of the Court of Appeal’s decision in the present case,  suggest that there is now little doubt that this state of affairs can be justified in law. Whether or not it is also fair is a wider political and moral issue.

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