Teachers’ Pensions Agency v Hill 2

Reference: (1998) OPLR 167

Mrs Hill was employed as a part-time teacher on a number of fixed term contracts. At the end of her employment she was aged 52 and claimed an early retirement pension. Under the rules of the Scheme, for her claim to be successful, her employer needed to confirm that employment was terminated by reason of redundancy, and they duly did so. However, the Agency refused to grant the pension on the basis that the Scheme rules required some positive action on the part of the employer to bring the employment to an end, it was not enough that it had simply come to an end because a fixed-term contract had run its natural course. Mrs Hill appealed to the Pensions Ombudsman.

The Ombudsman found as a matter of fact that Mrs Hill's employment was terminated by reason of redundancy. In addition, once the employer had confirmed the reason for termination of employment, the Scheme did not provide the Agency with a discretion to determine whether or not premature retirement was justified in the circumstances. The Agency appealed on the basis that the Ombudsman's decision was wrong in law.

In allowing the appeal, the Court held that it would be surprising if the Agency, as a body responsible for distributing public funds, was required to make payments based on what it believed to be a mistaken view of the law. Therefore, where the Agency believed there had been an error of fact or law by the employer, it was entitled to reach its own conclusion as to whether employment had been terminated by reason of redundancy. The expiration of a fixed-term contract did not fall naturally within the meaning of "was terminated" which postulated some action by the employer.