The High Court has rejected a constitutional challenge brought by four pensioners over changes to the Irish Airlines (General Employees) Superannuation Scheme (IASS), finding that the provision they challenged did not infringe their constitutional property rights.
Ms Justice Pilkington delivered judgment on 25 June 2020 in proceedings brought by Cornelius Clarke, Patrick Fagan, Kay Garvey and Hugh O’Brien against Ireland and the Attorney General. The four, all former employees of Aer Lingus or DAA, brought the case on their own behalf and on behalf of a larger group of IASS pensioners.
The case concerned section 32B of the Air Navigation and Transport Act 1988, inserted by the State Airports (Shannon Group) Act 2014. The pensioners argued that the provision was unconstitutional and that Ireland had failed to properly transpose the EU occupational pensions directive. They also sought damages. The court said it was not deciding the amount of any potential damages award, but whether the plaintiffs could be entitled to damages at all.
In December 2014, following a direction by the Pensions Authority, IASS rules were amended. Active and deferred members left the scheme for a new arrangement, while pensioners remained in IASS without an additional contribution to that scheme. Annual pensions above €12,000 were reduced by 10%, subject to a €12,000 floor; pensions above €60,000 were reduced by 20%, subject to a €54,000 floor. The changes did not apply to non-Republic of Ireland membership benefits.
The judge accepted that the pensioners’ interests as beneficiaries of the trust amounted to a property interest protected by the Constitution. But she rejected their argument that section 32B was targeted legislation aimed at them. The evidence, she found, showed that the provision was primarily directed at active and deferred members, while the pension reductions complained of were enacted under amendments to the Pensions Act, not section 32B.
She also rejected the claim that section 32B(3) breached the pensioners’ constitutional property rights, and refused the declarations sought. The judgment did not determine whether the EU directive had been properly transposed in every respect: the judge concluded that the plaintiffs’ argument for an earlier winding-up of IASS did not establish a failure to transpose the directive. Because the constitutional claims failed, the question of any entitlement to damages did not arise. The court said it would hear the parties on consequential orders and reliefs.