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Kent Fire Authority v Pensions Ombudsman 2

United Kingdom
02/10/2001
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Reference: (2001) OPLR 357

The complainant was a fireman who retired on ill health grounds. At the time of retiring he had accrued 8 days annual leave. He was paid GBP 643 in lieu of his accrued leave. This sum was not included in his salary for the purposes of pension calculations. He complained to the Pensions Ombudsman.

The Ombudsman determined that the GBP 643 should be included in his pensionable pay and the member must pay any additional contributions that this resulted in. The employer appealed.

In setting aside the Ombudsman's determination, Blackburne J held that although the GBP 643 received was the equivalent of the daily rate of pay for the 8 days leave in question, the payment could not, in any real sense, be described as payment for work done (or to be done) under the contract of employment. However, even if the payment did constitute pay, to constitute "pensionable pay", the pay must be regular in nature, ie it must be pay to which he was entitled, at the rate applicable to his rank, in the ordinary course of fulfilling his duties under his contract of employment. The contrast here is with payments of a "one- off" nature, however calculated, which happen to arise or become payable in the course of, or as a result of some unexpected or extraordinary event occurring in, the member's employment. Payment in lieu of leave is of that nature - it is not part of the regular pay to which he was entitled under his contract of employment.

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