Pensions

Commentary: Is the Pension Disqualification Act unconstitutional?

Joseph Ewart Layne is a graduate of Hugh Wooding Law School. He is the holder of an LLB (Honours) and an LLM (in Commercial & Corporate Law) from London University; and he recently completed an LLM in Legislative Drafting from UWI (St Augustine)

By Joseph Ewart Layne

Pension Disqualification Act

In 1983, the People’s Revolutionary Government (PRG) passed Peoples Law No. 24 of 1983 (PL 24) aka the Pensions Disqualification Act (PDA). PL 24 was deemed to take effect from April 4th 1983, the same day the National Insurance Scheme (NIS) Act took effect.

On the face of it, PL 24 made public officers civil servants, police officers, prison officers and teachers appointed after April 4th 1983 ineligible to receive a pension under the various pension laws that existed prior to that date. However, they were eligible for a pension under the NIS.

In a previous article I pointed out that the NIS Act had built into it the power for the minister of social security to take steps to remedy the disadvantage for public workers that resulted from the PDA. However, just over a month after the passage of the PDA, the revolution came to an end following the tragic events of October 19th 1983 and the US invasion.

Almost 34 years after establishment of the NIS and passage of the PDA, the minister has not exercised the power under the NIS Act to bring relief to public officers appointed after 1983. In the absence of action from the executive branch of government, the matter was taken to court.

In this and subsequent articles I will examine how the courts have treated with the PDA. Such examination would show both the role and limitation of the legal process in the quest for justice for post 1983 public workers. I will look at the issues from the standpoint of civil servants but the arguments and conclusions also apply to teachers, police officers and prison officers.

 Armstrong Challenge (Hermilyn Armstrong v. The Attorney General)

Following her retirement from the public service in 2009, Hermilyn Armstrong, who was appointed on 17th May 1983, challenged the PDA.  She sought a declaration and an order from the court that she was entitled to benefits under the Pensions Act.

Price Findlay J.

On October 15th 2012 Price Findlay J. in the High Court ruled that Armstrong right under section 92(2)(b) of the Constitution was being infringed by the refusal of the government to pay her pension and gratuity in accordance with the Pensions Act.

Section 92(2)(b) of the Constitution protects the pension benefits of a public officer, which existed under the law in effect at the time the officer was first appointed. The effect of section 92(2)(b) is that the minimum pension benefits that a public officer is entitled to upon retirement is that which existed under the law in effect when the officer was first appointed.

Less beneficial

There is no doubt that the pension benefits under the NIS are inferior to the benefits under the Pensions Act. For example, while under the Pensions Act Armstrong is entitled to a pension of $1,134.43 per month plus gratuity of $56,729.56, her NIS pension is only $953.77 per month and no gratuity is obtained under NIS.

PDA unconstitutional?

The decision in Armstrong has been interpreted in some quarters to mean that the PDA is unconstitutional with the effect that all public officers, no matter when they were appointed, are entitled to pension benefits under the Pensions Act. Admittedly there are parts of the judgment in Armstrong which seems to support this view. However, others take the view that the decision does not have such wide application. What then is the scope of the Armstrong decision?

Material facts and applicable law

In determining a matter litigated before it, a court is concerned with the material facts of the case and the applicable legal rules and principles. The interaction of the two produces the legal rule that decides the case. The material facts are those facts considered by the court as being fundamentally important. It can be a single fact or combination of facts that makes the case before the court similar to or different from other cases.

The applicable legal rules and principles include relevant provisions in the constitution and statutes; rules of law developed in previous cases which are binding on the court; rules of law in previous cases which, though not binding are persuasive; and applicable doctrines of law pronounced by judges and legal scholars over the centuries.

Based on the decision in Armstrong, I submit that the learned judge considered the material facts to be:

(a)       That Armstrong joined the public service on May 17, 1983;

(b)       That at the time Armstrong joined the public service the PRG was in power;

(c)        That PL No. 24 of 1983 was passed by the PRG;

(d)       That it is settled law that despite its four and half years of existence the PRG did not create a new legal order; and the 1974 Constitution though suspended was never extinct.

And she applied the principle that a law not passed in conformity with the provisions of the constitution is unconstitutional; and it is by extension null and void unless there exist some other jurisprudential basis for giving it limited validity. She also applied the rule that an ordinary law that is inconsistent with a provision of the constitution is to that extent void.

Rule in Armstrong

Based on those material facts, applicable legal principle and rule the main finding in Armstrong was that PL 24 was unconstitutional, null and void.

This finding gave rise to the legal rule that: A public officer first appointed while PL 24 purported to be in effect is entitled to pension benefits under the Pensions Act.

But what is the period that People’s Law No. 24 of 1983 was purportedly in effect? It is the period from April 4, 1983, up to February 22, 1985.

Why February 22nd 1985

Following the demise of the Revolution, in December 1984 general elections were held in Grenada. The newly elected parliament passed Act 1 of 1985 which among other things validated the PL 24.  On February 22, 1985, Act 1 was gazetted and became law. From that date the validity of the PDA was not based on the fact that PL 24 was signed by PRG Prime Minister Maurice Bishop; its authority was based on its validation by parliament by way of Act 1 of 1985.

The rule in Armstrong can therefore be restated as: A public officer first appointed prior to February 22, 1985, is entitled to pension benefits under the Pensions Act.

Section 18(4) null and void

Section 18(4) of the Pensions Act contained in the 2010 Edition of the Continuous Revised Laws of Grenada, which purports to incorporate the PDA as validated by Act 1 of 1985 states that-: “No pension, gratuity or other allowance under this Act shall be granted to any person first appointed to service under the Government on or after the 4th April, 1983.”

It is submitted that parliament could not on February 22nd 1985 pass a law seeking to reduce pension benefits to which a public officer was entitled prior to that date.

This is so because, as stated above, section 92(2)(b) of the Constitution guarantees that a public officer would at a minimum receive the pension benefits provided for under the law in existence at the time he or she was first appointed. Section 92(2)(b) of the Constitution is a deeply entrenched clause requiring the support of 2/3 of persons voting in a referendum. Act 1 of 1985 did not satisfy the referendum requirement.

Therefore, notwithstanding section 18(4), a public officer who was appointed prior to February 22, 1985, is entitled to pension and gratuity under the Pensions Act. This is based on the finding that PL 24 was unconstitutional and by extension the Pensions Act was in force at least up until February 22, 1985.

Post 1985 Public Officer

As regards a public officer appointed after February 22, 1985, there are different considerations. Establishment of his or her entitlement to benefits under the Pensions Act would require a court to rule that Act 1 of 1985 is unconstitutional insofar as it sought to validate PL 24. It is my understanding that this issue was not litigated in Armstrong nor was it necessary to litigate it. It remains open.

The decision in Armstrong therefore applies only to public officers appointed prior to February 22, 1985.

 

 

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