Court rules pension protection for former BNF and UK AEA workers cannot be amended by new employer

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Thirteen thousand nuclear decommissioning workers across the UK are today celebrating the news that their pension benefits cannot be cut back or varied by their employers.

In a landmark decision, the High Court in London has ruled that the pension protection provided by the Energy Act 2004 for former employees of British Nuclear Fuels and the UK Atomic Energy Authority is of “an enduring nature” and cannot be amended by their new employers.

The ruling against nuclear fuel company Urenco will protect pension benefits and contribution levels for 13,000 workers who are now employed at 23 UK sites in at least nine companies in the nuclear decommissioning industry.

Prospect, which fought the test case against Urenco on behalf of its members, hailed the result as a “shot in the arm” for workers in the industry.

National Secretary Mike Graham said: “Urenco went to the High Court to clarify the nature of the protection provided by the 2004 Act. This clearly presaged an attempt to break the protection and either reduce benefits, raise pension contributions or both.

“With our solicitors Russell Jones & Walker, we challenged this change with every means at our disposal. The judgment handed down by the court rebuffs Urenco on both counts and we are delighted that the company has decided not to lodge an appeal.

“This ruling is a victory for our members, for their pension rights, and above all for fair play.”

Mike Clancy, General Secretary designate of Prospect, said he was pleased that the judge had vindicated the union’s interpretations of the law. “We fought this case alone but the fact is that everyone working in the industry in 2004 now knows their pension rights are safe. Equally, it is up to us to make sure that the authorities live up to their obligations.”

The court case concerned Prospect member Gregory Mossop, an electrical engineer who had worked at BNFL’s Capenhurst plant and been a member of the UKAEA pension scheme since 1982, and then of the nuclear industry Combined Pension Scheme.

In 2008 he was transferred under TUPE arrangements from Sellafield Ltd to Urenco. In 2010 the company asked the court to clarify the meaning of the protections in the Energy Act 2004 governing his pension, in particular:

•    how far Urenco was constrained by the Act in varying “future service pension benefits”
•    how far Urenco was constrained by the specific promises in the sale and purchase agreement it had given in relation to the rights of transferring employees.

Urenco argued that those rights existed only at the point of transfer and not later, but Prospect said that would render the protection “meaningless.”

Mr Justice Warren, sitting in the High Court, answered both questions he was asked in favour of Gregory Mossop and the union, and said: “The protection provided by the Energy Act 2004 was intended to be (and was on the facts of this case) of an enduring nature.”

The wider impact of his judgment will be to require the Nuclear Decommissioning Authority to ensure that the pensions of protected persons formerly in BNFL and UKAEA are given enduring protection by new employers in all past and future sale and purchase documents. The judge said this was “an onerous obligation which will require careful scrutiny in all affected transfers.”

Failure to comply could lay the NDA and the Secretary of State open to a claim for breach of statutory duty for any financial losses on the part of affected employees, the judge said.


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