The High Court dismissed a judicial review brought by Unite the Union and its senior executive officer, Paul Gallagher, challenging the application of the 2009 pension levy to employees of the Central Bank and Financial Services Authority of Ireland (CBFSAI). It also rejected their constitutional and European Union law challenges to the legislation.
In a judgment delivered on 8 October 2010, Kearns P. found that the Minister for Finance had properly considered the union’s request for an exemption under section 8 of the Financial Emergency Measures in the Public Interest Act 2009. The court held that the Minister’s conclusion—that the CBFSAI employees’ circumstances did not materially distinguish them from other public servants—was reasonably open to him. The Minister had given adequate reasons, and the decision was not shown to be irrational.
The union argued that its members belonged to a self-funded pension scheme and that their salaries and pensions were not paid from the Central Fund. It said they would not benefit from the deductions and were unfairly treated compared with employees of commercial semi-state bodies excluded from the levy. The Minister’s stated reasons for refusing an exemption included that the scheme mirrored civil service pension arrangements, staff made the same contributions for the same benefits as comparable public servants, and other regulatory bodies also had self-funded schemes whose employees paid the levy.
The court noted that the CBFSAI was expressly included in the Act’s definition of a public service body and that its pension scheme fell within the statutory definition of a public service pension scheme. Whether the scheme was self-funded did not alter its status under the Act. The judgment addressed the lawfulness of the Minister’s decision under section 8; it did not find the deductions unlawful. It said their application to CBFSAI staff was lawful, subject to the constitutional arguments considered in the judgment.
On equality, the court found the applicants had not provided evidence comparing pension arrangements across the public service and commercial semi-state sector sufficient to establish unequal treatment. It also rejected the claim that the deductions were a disproportionate interference with property rights, taking account of the economic circumstances in which the Act was enacted.
The court further rejected the claim that applying the deductions breached EU treaty rules against monetary financing. It said the deductions were taken from employees’ remuneration, were a measure of general application, and were not paid by the Central Bank.
Kearns P. concluded that the applicants had not rebutted the presumption that the Act was constitutional. They were therefore not entitled to the declarations sought. The judgment records the rejection of the exemption request and the challenges; it does not specify a separate formal order quashing or affirming the Minister’s decision.