Legal challenge to cancelled retirement scheme

I have previously discussed on this blog whether groups disadvantaged by fiscal policy cutbacks might seek to protect their position by means of a legal challenge using the concept of ‘legitimate expectations’ (see also a revised version of this post in the Irish Times). It looks like we may get further clarification of this issue in a High Court case which is being taken by four secondary school teachers who are challenging the government’s suspension of an early retirement scheme.

Apparently, the scheme was due to run until the end of this year and counsel for the teachers, Gerard Hogan SC, is claiming that they were legitimately entitled to expect to avail of it.

The court’s decision will clarify whether other groups adversely affected by a policy cutback might seek to go the legal route to attempt to reverse it.

13 thoughts on “Legal challenge to cancelled retirement scheme”

  1. Isn’t it a bad state of affairs when the only recourse you have to a fiscal policy change is the challenge the matter with legal processes.

    It is no wonder there are so many private facilities in place for many government offered schemes when it seems that in most cases there is little or no recourse against the said public organizations when a change is made to long standing agreements.

    Everyone of course can understand the requirements for analysis of costs during an economic strain however what recourse does an individual have against continual costs – can we just stop paying our rent or inform our landlords that the rents have to drop because we are in an economic slump?

    I look forward to the clarification in the High Court regarding the teachers and their retirement scheme and hope that it provides some precedent to ensure more thorough investigation is made into cut backs before a widespread laying down of the law is made.

    Rgs
    M

  2. “legitimately entitled to expect to avail of it”?

    Pharmacists expecting that their existing gravy train would keep rolling and making decisions on the basis of it?

    and so on…

    On the other hand, suing the poltroons who set the economy on fire for gross negligence might at least be one way to get the buck to stop somewhere, on the island of inflated entitlement.

  3. I raise the possibility that the executive may regret the campaign against the judiciary to get them to “voluntarily” reduce their salary. The leaks and FOI requests and plentiful memoes between civil servants all sound very genuine ……. not.

    @ Michael Hennigan
    Good idea! The financial connections of these people should be subject to a commission on corruption, police powers etc. Most civilized jurisdictions have them. They find them cheaper than setting up toothless tribunals every time there is a bribe paid to a politician

  4. Legitimate expectations is an administrative law doctrine which provides some protection to those who are affected by changed practices or interpretations of principles/rules by those such as ministers, agencies, local authorities who are empowered to administer and apply discretion in regimes which are typically set down in legislation. The doctrine is of no application in respect of legislation. If a minister discovered that short term changes to an early retirement scheme breached the legitimate expectations of some persons affected by the decision, the minister’s decision could, nonetheless, be swiftly implemented through fresh legislation. There are some constitutional constraints on what may be done in legislation, of course, but subject to those (and to the supremacy of EU law) the government is free to seek the support of the legislature to change statutory entitlements as it sees fit, subject to the disciplinary power, such as it is, of the ballot box at the next election.

  5. If there was any actual merit in the original scheme, the teachers impacted by its removal might have an argument.

    But in reality the “mad, bad and sad” early retirement strands were a massively expensive sop to the teachers’ unions, whereby a teacher could retire up to 7 years early by claiming non-specific burn-out, general lack of ideas and enthusiasm for the job etc. By not restricting it to those with genuine pyschological issues and putting in an exteremly low barrier to entry, it effectively bacame just another perk of the job.

    This whole “legimate expectation” doctrine will be highly restrictive if brought to its logical conclusion. Parents had a legimate expectation to early childcare supplement & child allowance when deciding to have children. Students had a legimate expectation of free college fees when deciding not to leave school at 16. Home-owners had a legimate expectation to mortgage interest relief and no property tax when they decided to buy a house. The room for budgetary maneuver becomes extremely limited.

  6. @Proposition Joe
    Legitimate expectation has an extremely limited scope in relation to budgetary changes to entitlements – it isn’t open to a Minister to limit the discretion of his office, and as Colin has pointed out, it is a purely administrative remedy, rather than a restriction on legislative power. It’s also a somewhat open question as to whether it can apply to substantive rather than procedural expectations at all, though recent cases have been moving towards respecting substantive expectations.

  7. I had a legitimate expectation that house prices would go up by 20% per annum and that my Anglo shares would go up by 30% per annum. Call my lawyer!!!!

  8. Isn’t legitimate expectation the reason for not axing the minister’s pension for serving TD’s? By that I meant the legitimate expectation of FF for the support of TDs in receipt of those pensions.

  9. @Colin Scott

    Do you think that this case has relevance to any future moves by the Minister to revoke the Bank Guarantee by statutory instrument given that the doctrine relates to “practices or interpretations of principles/rules by those such as ministers, agencies, local authorities who are empowered to administer and apply discretion in regimes which are typically set down in legislation”?

  10. Its good to see some legal expertise being offered on the blog and thanks to Colin and Brendan in particular for their clarifications of the legitimate expectations concept. I for one was not aware of the distinction Brendan makes between substantive and procedural legitimate expectations, so I resorted to a quick Google search which threw up an excellent recent survey by Matthew Groves in the Melbourne University Law Review (I admit I did not read all 57 pages but the introduction gives a good introduction to the issues). http://findarticles.com/p/articles/mi_go2438/is_2_32/ai_n31352800/?tag=content;col1

    I share the view expressed in some of the comments that it would be an unacceptable breach of the separation of powers principle if the judiciary could second-guess the substantive merits of government decisions, but I also note Brendan’s view that the doctrine of substantive legitimate expectations is evolving (read expanding) and therefore the outcome of this case is not a foregone conclusion. I also suggest that the involvement of an esteemed former colleague at Trinity, Gerard Hogan, pleading the case of the teachers means that the principle will get a thorough review.

    More generally, I am interested in the way various constraints may deflect a government from the sort of ‘first-best’ solutions to economic problems advocated on this blog, or broadly the ‘implementability’ of government decisions. In some cases, the problem may be administrative infeasibility or high transactions costs. In other cases, it may be the political imperative to carry a voting majority with you which limits the freedom of manoeuvre. Or it may be legal constraints, which may or may not revolve around the concept of legitimate expectations.

  11. I posted here previously about what I called spurious claims regarding “legitimate expectations”.

    The teachers might have a stronger case. The TUI Secretary General said the union “received several calls today from distressed teachers in this situation who deferred their application to retire to this year in the light of the circular letter. They are appalled at this breach of trust. The unambiguous confirmation that the schemes would continue for at least one further year was not alone given to the union but was set out clearly in a circular letter issued to schools last year.”

    http://www.tui.ie/TUI_Demands_Continuation_of_Early_Retirement_Scheme/Default.341.html

    It appears that this scheme was negotiated between the Department and the teachers who were given assurances about this non-statutory scheme. If the teachers were assured that this scheme would continue for another year at least, and if the teachers can show that they acted on this assurance i.e. postponed their retirement, they might have a case.

    In some ways, this is analagous to the Ministerial pensions. The proposal to withdraw Ministerial pensions from members of the Oireachtas was dropped, apparently on the basis that former Ministers went forward for election in 2007 on the basis that their pensions would not be affected.

    Of course, the answer to the former Ministers is simple: if you would prefer to keep your pension, you can resign your seat. Somehow, that line of reasoning did not appeal to the Government!

    In a similar vein, the teachers would have no complaint if they were given an opportunity to resign now. Instead the Department decided that “Early Retirement Scheme for Teachers: this pilot scheme is being suspended with immediate effect.” I assume the “immediate effect” was to avoid a rush for the door.

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