Local Government Pension Scheme Scotland · CAS-37680-Q4L8

CAS-37680-Q4L8

Ombudsman’s Determination Applicant Mr Y

Scheme Local Government Pension Scheme (Scotland) (the Scheme)

Respondents West Dunbartonshire Council (the Council)

Scottish Public Pensions Agency (SPPA)

Outcome

Complaint summary Mr Y’s complaint against the Council is that:-

• The Council suppressed the provision of retirement illustrations it obtained from Strathclyde Pension Fund (the Fund)1 and documents pertaining to his ill health referral to occupational health and stopped the ill health retirement process.

• When his pension was deferred, the information he was provided did not comply with the requirements under The Local Government Pension Scheme (Scotland) Regulations 2014 (SI 2014/164) (the 2014 Regulations) or SPF Technical Bulletin No 26 (March 2009, updated February 2008, August 2015 and 2018 (the Fund’s Technical Bulletin).

• The Appointed Person who considered his stage one appeal under the internal dispute resolution procedure (IDRP) should have stepped down as they had input into the process that saw his dismissal without notice, so they were neither independent nor impartial.

Mr Y’s complaint against SPPA is that:

• SPPA improperly considered his stage two IDRP appeal - initially awarding him Tier 1 ill health early retirement and then retracting the award; and

1 The Fund is part of the Scheme.

1 CAS-37680-Q4L8 • falsely gave him hope about his pension prior to the Employment Tribunal (ET) Remedy Hearing of 30 January 2024.

Mr Y has withdrawn his complaint against the Fund, and he accepts that the aspect of his complaint pertaining to not being awarded Tier 1 ill health retirement from the date his employment ended is included within the scope of the pending compensation to be awarded by the ET.

Background information, including submissions from the parties Relevant extracts from the 2014 Regulations and the Fund’s Technical Bulletin are provided in the Appendix.

Mr Y was a Corporate Health & Safety Officer for the Council working in the Risk and Health & Safety Section.

Throughout his employment with the Council, Mr Y suffered from multiple sclerosis (MS).

Following a period of sickness absence due to his disability, Mr Y attended an Attendance Review Meeting on 14 January 2015. During the meeting Mr Y was issued “an informal improvement note” by his line manager and a Human Resources (HR) adviser asked him whether he would be interested in the possibility of ill health retirement. Mr Y said he would be interested, and the HR adviser informed Mr Y that he would be provided with more information about it, including Tiers (i.e. the level of benefit available) and figures.

The same month the Council requested and received from the Fund four retirement illustrations for Mr Y with a provisional date of leaving of 31 March 2015. Namely, “Ill Health Retirement (Tier 1 and Tier 2) / Voluntary Early Retirement with 3 years CAY + redundancy and/or 5 years CAY2”.

On 2 February 2015, the Council’s HR manager emailed Mr Y. As relevant, the HR manager said:

“I have discussed the request made at your recent Attendance Review Meeting to be provided with figures in respect of ill health with your line manager and..., HR Adviser. As was explained to you, any decision regarding ill-health retirement requires Occupational Health independent medical advice on your fitness for work. As such, it would not be appropriate, or normal practice, to provide you with figures in advance of such advice. This should have been more fully explained to you at the meeting. Please accept my apologies for any confusion caused. I am more than happy to explain the ill health retirement process and the requirements of the Local Government Pension Scheme Regulations to you personally should you wish.”

2 CAY means ‘Compensatory Added Years’.

2 CAS-37680-Q4L8 On 28 February 2015, Mr Y submitted a grievance for the January absence warning, stating that his line manager had been provided with unprofessional advice by the HR adviser. The grievance was stopped by the Council’s Head of Finance and Resources on 12 March 2015. On 12 April 2015, Mr Y submitted an Employment Tribunal (ET) claim for victimisation.

On 29 April 2015, Mr Y’s line manager emailed Optimal Health (the appointed occupational health adviser) (OH) an updated referral form for Mr Y.

On 11 May 2015, Mr Y attended a meeting with the Head of Finance and Resources and the HR manager. One of the issues discussed concerned Mr Y being referred to OH in respect of ill health retirement.

The next day, the HR manager asked OH if Mr Y met the criteria to be considered for ill health retirement and whether the matter should proceed to an independent doctor’s assessment. If that was the case, the HR manager requested that it be progressed as a matter of urgency.

On 3 June 2015, Mr Y saw Dr Watt (Consultant Occupational Physician for OH). In his same day report to Mr Y’s line manager, in answer the question “As requested, if redeployment is not appropriate please consider this a formal request and advise on whether the employee would meet the criteria for Ill Health Retiral and if so at what Tier?”, Dr Watt said:

“[Mr Y’s] health issues are significant and clearly impact on his day to day functioning. Prognosis in this case must be considered guarded. He is at risk of further deterioration in his symptoms and further symptomatic relapses, but the timescale and severity of these cannot be predicted with accuracy. Fatigue symptoms are a common problem for people with this neurological condition and can remain intrusive in the long term. Notwithstanding these factors, [Mr Y] is currently attending work, and in my view appears fit to do so at present, with current adjustments and recommended restrictions in place. Therefore, as things stand, in my opinion it would be somewhat premature to consider Ill Heath Retirement at this juncture. However, this is a complex case and, as you are aware, a formal opinion on eligibility for Ill Health Retirement can only be provided by an Independent Medical Adviser to the Local Government Pension Scheme (Scotland). As I have previously had involvement with [Mr Y’s] case, I am ineligible to provide such an opinion. Therefore, if after further dialogue with your employee, a formal opinion on his eligibility for Ill Health Retirement is required at this time, please let me know. In those circumstances, after obtaining relevant background medical reports from [Mr Y’s] treating clinicians (he has provided consent for this today), arrangements can be made for his case to be assessed by an independent doctor, as required by the rules of the LGPS.”

On 11 June 2015:-

• HR emailed an amended referral form to OH and asked: “Can I please request an urgent review of this case in order for a formal opinion to be given on Ill Health Retiral?”.

3 CAS-37680-Q4L8 • OH emailed Dr Watt asking if the referral form should be passed to the Fund for an opinion on Mr Y’s ill health retirement. Dr Watt replied no, and that firstly OH needed to book an independent doctor covering the Council so that GP and Specialist reports could be requested. Once these had been obtained, the case could be forwarded to the independent doctor for a “pension assessment”.

On 12 June 2015, the HR manager submitted a complaint about Mr Y.

Mr Y was suspended on 17 June 2015.

On 19 June 2015:-

• The HR adviser emailed the HR manager asking if he was happy for her to obtain confirmation from Mr Y that he still wished to explore ill health retirement. She explained that Dr Watt had called her and wished to do a handover to an independent practitioner and arrange requests for information from Mr Y’s GP and Specialists.

• The HR manager replied that he would be discussing the matter with the Head of People and Transformation that day [Ms S]. Shortly after sending the email, the HR manager sent the HR adviser a second email commenting:

“From my reading of the report the doctor is pretty clear that [Mr Y] is fit to undertake his duties at present and the ill health retirement would be premature at this juncture.

It is for us to consider whether we would wish to proceed. [C]an you give me a call…”

• The HR manager sent the HR adviser a further email that afternoon. As relevant, he said:

“Following my reading of OH report I would advise Dr [redacted] to hold off further with IHR until we advise. As report states he is fit for duties I see no reason at this time to progress. We can review this position if circumstances change.”

On 4 September 2015, the Head of Finance and Resources emailed Mr Y regarding an appointment with OH stating he would raise the matter with Mr Y’s line manager.

On 9 September 2015, the line manager emailed Mr Y. The line manager said:

“In order to have a better understanding of the purpose for an OH referral I will liaise with HR re our availability to meet with you and be in touch in due course to invite you to a meeting to discuss further."

On 24 September 2015, following Disciplinary Hearings on the 10 and 21 September 2015, Mr Y was dismissed on grounds of gross misconduct.

On 28 September 2015, Mr Y asked the Head of Finance and Resources for, amongst other things, “An update on the exacting position re my pension…”. The Head of Finance and Resources replied the same day: 4 CAS-37680-Q4L8 “Your pension will be unaffected. You are treated like a leaver from the Council and your pension benefits would be deferred. Information on deferred benefits can be found - http://www.spfo.org.uk/index.aspx?articleid=1700”

On 6 October 2015, the Head of Finance and Resources notified Mr Y that his request for a referral to OH would not be made.

In August 2016, Mr Y unsuccessfully appealed the dismissal decision.

In October 2016, Mr Y contacted the Fund about accessing his pension. The Fund sent him a deferred benefit statement.

The following month, the Fund received Mr Y’s application for ill health retirement from deferred status.

The Fund obtained the opinion of an independent registered medical practitioner (IRMP) that Mr Y did not satisfy the criteria under regulation 36 of the 2014 Regulations for the early release of his deferred pension on ill health grounds.

In February 2017, the Fund turned down Mr Y’s application.

In July 2017, Mr Y appealed the Fund’s decision invoking the Fund’s two-stage IDRP. Mr Y also contested that the Council should have awarded him Tier 1 ill health retirement from the date his employment ended.

Following email exchanges between Mr Y and the Fund, Mr Y clarified that while he intended to submit an appeal to the Council for Tier 1 benefits, he also wished to appeal the Fund’s decision not to award him the early release of his deferred pension on grounds of ill health.

In February 2018, the Fund received notification from the IRMP that, following the receipt of additional information from Mr Y, their opinion was that Mr Y met the criteria for ill health retirement from deferred status. The Fund subsequently awarded Mr Y ill health retirement benefits backdated to November 2016.

In April 2018, Mrs Y, representing Mr Y, submitted a stage one IDRP appeal to the Council (Ms S – the Head of People and Transformation and the Appointed Person for stage one appeals) following consultation with the Fund. Mrs Y said:

“I write on behalf of my husband, [Mr Y], to submit his appeal against a decision taken by [the Council] that affected, and continues to affect, his pension rights. Namely that when he was dismissed from [Council] employment on 24th September 2015 that a First Instance decision was taken by someone within [the Council] to classify him as a ‘Deferred’ member in relation to the LGPS instead of an ‘Ill Health Tier 1’ status. This First Instance decision was communicated to [Mr Y] by [the Head of Finance and Resources] by email on 28 September 2015.”

Commenting on Ms S’ role as the Appointed Person, Mrs Y said:

“Obviously being advised of this gave [Mr Y] some concern due to the ongoing ET proceedings between himself and [the Council] of which you are very much an 5 CAS-37680-Q4L8 intrinsic part. Therefore, you may wish to consider temporarily ‘stepping down’ from your Appointed Person role for the [Fund] and pass this to someone else who can be deemed the Appointed Person. That is for you to decide.”

Mrs Y requested that the Council:

“Reconsider and re-classify [Mr Y’s] ‘Deferred’ status to ‘Ill Health Retirement Tier 1’ i.e. in accordance with reasonable timescales as should have occurred i.e. if the urgent OH referral had not been stopped by [the HR manager].”

On 16 May 2018, Ms S rejected Mr Y’s stage one appeal on the grounds that it was time barred:

“As you are aware, the IDRP requires a submission to be made within six months of the date upon which the first instance decision (being appealed) was first confirmed to the member. [Mr Y’s] employment was terminated on the grounds of gross misconduct on 24th September 2015 and as you state, confirmed by [the Head of Finance and Resources] in a letter dated 24th and emailed on 25th September 2015. The confirmation advised of the right to appeal against dismissal and [Mr Y] subsequently availed himself of that right. His appeal was not upheld, so he remained dismissed. Given the nature of your husband’s dismissal and, prior to his suspension, both attendance and supporting Occupational Health assessment of fitness to work, consideration of ill-health retirement was not appropriate in these circumstances. Technically the IDRP would have had to be submitted to the Council’s Appointed Person by 25th March 2016. However, in consideration of the protracted period over which your husband’s appeal was heard, and confirmation regarding deferred member status received by same on 17th October 2016, the IDRP would have been accepted up to 17th April 2017. The Decision Regulation 72(7) (b) of the Local Government Pension Scheme (Scotland) Regulations 2014 allows for an extension of the six month period within which an appeal must be submitted. The six month period can be replaced by such longer period as the person giving the decision on the appeal considers reasonable. The appeal on behalf of Brian was submitted more than two years after the relevant date. Having taken into account all of the circumstances, I am of the opinion that a period of more than two years is not reasonable. For that reason I do not uphold the appeal. It is clear from your submission that [Mr Y] has already sought to have his deferred benefits paid on the grounds of permanent ill-health and that this was rejected by [the Fund] on 21st February 2017.

Thereafter there was a six months within which to access the IDRP from the date of the relevant letter. As such, any enquiry as to the reason for this should be directed to SPFO as they made the First Instance Decision on that matter.”

In November 2018, Mr Y appealed the stage one decision. In a letter to SPPA, Mr Y said:-

6 CAS-37680-Q4L8 • Ms S should have stepped aside, and another Appointed Person considered his appeal, as she had input into the process that saw his dismissal without notice.

• The decision did not note that his pension was backdated to 11 November 2016 (within the second IDRP window referred to by Ms S in her decision letter).

• Nonetheless, the Council failed to provide him with information that would have enabled him to timely submit an appeal at stage one. The notification of dismissal did not reference regulation 713 of the 2014 Regulations. On enquiring what would happen to his pension, he was only notified that his pension would be unaffected, he would be treated as a leaver, and his pension benefits would be deferred. The Council was obligated to provide more information than this. He was entitled to a ‘first instance decision’ that he was not being awarded ill health early retirement.

• HR’s 11 June 2015 email to OH urgently requested that he be assessed for ill health retirement. The Council endeavoured to cover this up and deprived him of information that, among other things, would have helped his appeal against dismissal.

• He was not informed that a stage one appeal had to be submitted within six months of the ‘first instance decision’, and he was not aware of the IDRP form until the Fund initially rejected his application for ill health retirement from deferred status (in February 2017).

• Ms S had endeavoured to rewrite history by saying what she would have done, knowing that he had not been provided with information he was entitled to receive under the 2014 Regulations. Reference was not made to the fact that Ms S’ subordinate, the HR manager, stopped the commenced urgent referral to OH in June 2015. The HR manager was not medically qualified. Nor was Ms S to support the HR manager’s decision. He was not informed that the referral had been stopped and the documents pertaining to it were suppressed.

• It was not clear what the nature of his dismissal had to do with a stage one appeal and the denial of his request for ill health early retirement from active service.

• Ms S referenced two IDRP windows. In essence this necessitated two conspicuous statements and all the accompanying information. He received none.

• Had he been properly informed by the Council, he would not have applied to the Fund for the early release of his deferred pension on the grounds of ill health. Instead, he would have submitted a stage one appeal to the Council.

3 ‘Notification of first instance decisions’.

7 CAS-37680-Q4L8 • He should receive Tier 1 benefits from the Council from the date his employment ended.

In January 2019:-

• SPPA emailed Mr Y incorrectly noting that he had been awarded Tier 2 benefits from active service.

• After Mr Y queried the matter, SPPA apologised confirming that it was aware he was currently in receipt of deferred benefits. SPPA notified Mr Y that as his appeal was a complicated case it might have to take legal advice to address his concerns to make sure it did not stray from its legal remit to decide his appeal4. SPPA said:

“Looking into the actions of [the Council] and the way they conducted themselves during the time that you were dismissed and thereafter, such as giving you all the information you needed and informing you of your next steps; we will ask them questions and study the evidence from yourself to formulate a view on whether they carried out their duties as they should.

I must inform you however that, should we find that they have acted in a way that constitutes ‘maladministration’, Scottish Ministers do not have the powers to require [the Council] to pay compensation to you. The Pensions Ombudsman does have these powers and will consider the case once it has been finalised at stage 2 by Scottish Ministers.”

• Later that month, SPPA informed Mr Y that it had requested information from the Council to decide if it was appropriate to refer his case to an IRMP.

On 29 May 2019, SPPA wrote to Mr Y. SPPA:-

• Apologised for the time it was taking to decide his appeal, which it attributed to the complexity of his case, the large amount of submitted evidence and gathering medical evidence from various parties.

• Informed Mr Y that it had referred his case to an IRMP and once it received the doctor’s report it aimed to determine his appeal within 15 working days.

The next month, SPPA received Dr Walker’s (IRMP) report. Dr Walker noted that Mr Y had been dismissed on grounds of gross misconduct. In summary, as relevant, Dr Walker said:

“My opinion is that there is good evidence that [Mr Y] was suffering from a significant impairment due to the effects of Multiple Sclerosis in September 2015…This evidence was known to the council and would have been available to an IRMP should [Mr Y] have applied for ill-health retirement at that time.

4 The SPPA noted that much of Mr Y’s submissions were about his ET case, which not being a pension

matter was outside its remit.

8 CAS-37680-Q4L8 In my opinion there is no reasonable prospect of [Mr Y] being able to obtain gainful employment before normal pension age, or his normal retirement age.”

In July 2019:-

• SPPA issued its decision on Mr Y’s appeal, awarding Mr Y Tier 1 benefits from the date his employment ended with the Council. The letter incorrectly stated that Mr Y’s appeal concerned the Council’s decision “not to award to you Tier 1 benefits when you were retired on the grounds of ill-health”.

• Mr Y subsequently informed SPPA that the decision letter contained a factual inaccuracy. The Council had not retired him on grounds of ill health. Rather, it had dismissed him on grounds of gross misconduct. Mr Y requested that this be corrected, and the decision letter reissued, as this might confuse the progress of his complaint about the Council’s maladministration. Mr Y said whilst he was very pleased with the outcome, he was keen to know when he would receive SPPA’s “findings whilst investigating my IDRP stage 2 appeal”.

• SPPA emailed Mr Y that it would amend its decision letter.

• SPPA subsequently wrote to Mr Y. The SPPA said:-

o The determination was issued in advance of the completion of its full investigation. While he was entitled to a pension under regulation 365 (of the 2014 Regulations) he was not entitled to a pension under regulation 346 as his employment with the Council had not been terminated on the grounds of ill health.

o Under Section 507 of the Pensions Act 1995, there were certain ‘exempted disputes’ to which the IDRP would not apply. These included disputes where proceedings had commenced in a court or tribunal. As he was currently involved in an ET case against the Council’s decision to dismiss him, SPPA could not comment on this aspect of his appeal and should not have considered his entitlement to Tier 1 benefits. One key point in his appeal was the Council’s failure to advise him of his right to appeal the award of a deferred pension. As this was inextricably linked with the pending findings of the ongoing ET, SPPA was not willing to investigate this point further until the conclusion of his litigation.

o Whether he was entitled to a pension under regulation 34 might be reviewed subject to the outcome of the ET.

5 ‘Early payment of retirement pension on ill-health grounds: deferred members’.

6 ‘Early payment of retirement pension on ill-health grounds: active members’.

7 ‘Requirement for dispute resolution arrangements’.

9 CAS-37680-Q4L8 o It apologised for its error and offered £500 for distress and inconvenience caused.

On 30 January 2024, the ET Remedy Hearing upheld Mr Y’s claim of unfair dismissal by the Council. The ET’s award included compensation for pension loss based on Tier 1 benefits from the date Mr Y’s employment with the Council ended8.

On 28 March 2024, SPPA wrote to Mr Y. SPPA said:-

• It rescinded the Tier 1 award after the Council had advised that he had left its employment on the grounds of gross misconduct. It was regrettable that SPPA was not informed when he initially appealed about his deferred pension benefits.

• It had notified him that his entitlement to an ill health pension (under regulation 34) would be reviewed after it had been informed of the outcome of the ET. The Council had confirmed that following the outcome of the ET the reason he left its employment remained based on gross misconduct.

• It had taken legal advice on the matter. As he did not leave the Council by reason of his ill health condition, the option to award Tier 1 benefits did not apply.

• On dismissal, he automatically became a deferred member of the Scheme. As such, he was entitled to an ill health pension under regulation 36 of the 2014 Regulations. Currently, he was in receipt of a pension under this regulation backdated to 11 November 2016, the date he submitted his claim.

• It assumed that his concerns about work after moving to new premises was resolved by the ET judgment.

• It again offered its sincere apologies and £500 for the distress and inconvenience its errors had caused him and for the length of time he had to wait for a decision on his appeal.

On 17 July 2024, SPPA wrote to Mr Y that it had not received his reply to its offer and attached a copy of its March 2024 letter.

The following month Mr Y replied. Mr Y said:-

• He had not received SPPA’s original letter of 28 March 2024.

• He had notified SPPA of all the circumstances surrounding his dismissal; including the reason for his dismissal and had sent all relevant information at the time.

• He was not responsible for SPPA’s failure to read that information or for the assumptions it made. On receipt of SPPA’s July 2019 letter, he promptly advised

8 An 80% deduction for wage and pension loss was applied by the Judge.

10 CAS-37680-Q4L8 it of the factual inaccuracy in its letter regarding ill health retirement. He understood that the Council did the same. SPPA did not understand the emotional turmoil that period caused him. To receive the favourable outcome was an absolute high, only for it to be rescinded a few weeks later an absolute low; and to realise he had to continue to obtain justice.

• It was always the case that the Council dismissed him on the grounds of misconduct. The ET could not say otherwise. So why had SPPA offered to review the decision when the reason for his employment ending would not change? Again, SPPA had failed him, giving him cause to hope when there was none.

• If he had not been unfairly dismissed and the Council had not “buried” the HR enquiry in his interest in ill health retirement (in January 2015) and the urgent referral to OH regarding ill health retirement (in June 2015), he would, most likely, be receiving Tier 1 benefits and not a deferred pension with a significant monetary difference.

On 30 September 2024, SPPA replied to Mr Y largely reiterating the position it had expressed in its letter of 28 March 2024. Additionally, SPPA said:-

• The ET judgment alluded to the difficulty of making a retrospective finding on whether he would have been entitled to ill health retirement when his employment ended and did not find he would have been but for his dismissal.

• While there was no doubt about the diagnosis of his serious long-term condition, which supported the award of ill health retirement from deferred status, it remained its view that he was not entitled to ill health retirement when he was dismissed. As his employment did not end on the grounds of ill health, the option to award Tier 1 benefits did not apply.

• Its offer of £500 remained open for him to accept.

In March 2025, Mr Y successfully appealed the ET Remedy Hearing’s compensation calculation for pension loss and a hearing at the ET Glasgow was scheduled for 6 October 2025 to recalculate the sum (excluding the 80% deduction for wage and pension loss that the Judge at the Remedy Hearing had applied).

On 14 November 2015, the ET Glasgow issued the recalculated compensation sum, including for pension loss.

To date Mr Y has not accepted SPPA’s offer of £500 for distress and inconvenience.

Mr Y’s position in relation to WDC as represented by Mrs Y While it is accepted that compensation for significant pension loss has been included within the scope of the ET, Mr Y’s complaint of maladministration by the Council has not been. Specifically:-

• The Council did not inform Mr Y about or provide Mr Y with the retirement quotations it obtained from the Fund prior to his dismissal. 11 CAS-37680-Q4L8 • The HR manager did not comply with Dr Watt’s comment: “Therefore if, after further dialogue with your employee, a formal opinion on his eligibility for Ill Health Retirement is required at this time, please let me know.” Rather the process was stopped and email exchanges on 11 and 19 June 2015 were suppressed. Mr Y was not consulted and was unaware of the email exchanges until November 2016 (following a further SAR to the Council). The HR manager, the Head of Finance and Resources and Ms S were not medically qualified.

• In September 2015, Mr Y was informed that his pension was deferred. The information the Council provided him did not comply with regulation 71 or the Fund’s Technical Bulletin. He was not provided with a “conspicuous statement” or details of his right to appeal under the IDRP. If he had been properly informed, he would have submitted his appeal for Tier I ill health retirement within the six months deadline.

• Ms S, the Appointed Person, should not have decided his stage one IDRP appeal as she was not independent, being implicit in Mr Y’s dismissal and aware that the HR manager had stopped the urgent ill health retirement referral to OH.

• Certain individuals at the Council should be held to account for this maladministration.

Mr Y’s position in relation to SPPA as presented by Mrs Y

SPPA failed in its job, not once but twice.

The first time, when SPPA awarded Mr Y Tier 1 ill health retirement after eight months of deliberation, only to then retract the award. At the time SPPA offered Mr Y £500 for distress and inconvenience caused, albeit an SPPA internal email at the time considered £1,000 to be more appropriate.

The second time was more prolonged with a questionable outcome. Mr Y was advised to contact SPPA after the result of the ET was known. This again gave him hope that something could be done about his pension. But when he did, he was informed that while the ET found his dismissal was unfair and discriminatory and that he was victimised, he was not eligible for Tier 1 ill health retirement as the reason for his employment ending was unchanged and was not on the grounds of ill health.

As a result, the distress and inconvenience award for SPPA’s “maladministration and incompetence” should fall into the exceptional category, or, at the very least, the severe category as set out in the Pensions Ombudsman’s factsheet: ‘Redress for non-financial injustice’.

Mrs Y additionally submitted background letters to the second occurrence and a Psychiatric Report dated 13 September 2022, prepared for the ET Remedy Hearing, to give insight into Mr Y’s health.

12 CAS-37680-Q4L8 The Council’s position

The Council submits:-

• Mr Y was not considered for ill health retirement because he was dismissed on grounds of gross misconduct.

• It considered whether Mr Y should be referred for ill health retirement and contacted OH. OH assessed Mr Y as fit for work and he was working and undertaking his duties until his suspension.

• On dismissal Mr Y’s pension status automatically deferred and he was informed about the impact on his pension by both the Council and the SPPA.

SPPA’s position

SPPA’s position is as per its letters of 28 March and 30 September 2024 (see above paragraphs 45 and 48).

Adjudicator’s Opinion

Mr Y’s complaint against the Council

The provision of retirement illustrations

Having sought Mr Y’s opinion on whether he would be interested in the possibility of ill health retirement in a meeting on 14 January 2015, the HR adviser offered to provide Mr Y with more information, including Tiers and calculations. However, it was unclear whether the full process for applying for an ill health pension was explained at the meeting.

In the Adjudicator’s opinion, this oversight, if any, was corrected by the HR manager’s email of 2 February 2019 to Mr Y. This email confirmed that any decision required medical advice and that, as such, it would not be appropriate, or normal practice, to provide figures in advance of such advice. The HR manager explained that this should have been fully explained to Mr Y at the meeting and apologised “for any confusion caused” and offered to explain the ill health retirement process and the requirements of the 2014 Regulations to Mr Y “personally should you wish”.

The Adjudicator’s view was that this correction, made in under three weeks, minimised any liability on the part of the Council and that the apology in these circumstances was sufficient. The Adjudicator considered the Council was not obliged to share the illustrations it obtained from the Fund with Mr Y at that stage as no decision had been made as to whether Mr Y would be granted ill health early

13 CAS-37680-Q4L8 retirement, the process had been explained to him, and the offer of further assistance had been made.

Deferred pension

Mr Y automatically became a deferred member of the Scheme on 24 September 2015 when he was dismissed. Mr Y was dismissed without notice and claimed that he was not provided with any information about his pension rights other than a brief email directing him to the Fund’s website.

On 28 September 2015, the Council informed Mr Y that he was entitled to a deferred pension, and he was provided with a link for further information. While the link now no longer worked, the SPPA’s guidance on ill health retirement that was currently accessible on its website, dated 2020, confirmed that first instance decisions on ill health retirement of deferred members were made by the administering authorities. The guide referred to regulation 36 of the Local Government Pension Scheme (Scotland) Regulations 20189. This was the same as regulation 36 of the 2014 Regulations, that was in place when Mr Y left the Scheme. The Adjudicator considered that Mr Y was only entitled to an ill health pension from deferred member status and that it was the role of the administering authority (the Fund) to advise him of his potential benefits.

On 8 April 2018, Mrs Y submitted a stage one IDRP appeal on behalf of Mr Y to Ms S, as the Council’s Appointed Person, and invited Ms S to step aside from considering the appeal.

9 The Adjudicator’s Opinion was issued on 16 December 2025. The 2020 guide has since been replaced with

a 2026 guide. The 2026 guide confirms that first instance decisions on ill health retirement of deferred members are made by the administering authority (on page 5, under ‘1.2 Role of the Employer & Administering Authority – First Instance Decisions’). The guide also refers to regulation 36 of the Local Government Pension Scheme (Scotland) Regulations 2018.

14 CAS-37680-Q4L8 In support of his complaint, Mr Y quoted from the Fund’s Technical Bulletin, which sets out the IDRP and is headed ‘An important notice to all scheme employers’. As relevant, this states:

“Under Stage 1 of this procedure the dispute should be directed to the person nominated by the employing authority to consider the first stage of the appeal. The nominated person must be independent and must not have been involved in any capacity in the decision against which the member is appealing [the Adjudicator’s emphasis]...”

When the stage one appeal was submitted, there were ongoing ET proceedings, and it followed Mr Y’s submission to the Fund for ill health early retirement from deferred status that was initially rejected, which Mr Y also appealed. In the circumstances it is understandable why the Fund referred Mr Y back to the Council, as in the event the ET confirmed that Mr Y was dismissed on the grounds of ill health he could still have been considered for ill health early retirement from active service.

Additionally, while the ET was ongoing, the Adjudicator thought it unlikely that Mr Y would have considered any member of the Council sufficiently independent to consider his appeal. In the Adjudicator’s opinion, this was another reason why the Council should have refused to consider Mr Y’s appeal at that time.

The Adjudicator said both reasons amounted to maladministration by the Council and would have caused Mr Y significant non-financial injustice (distress and inconvenience), meriting an award of £500.

Mr Y’s complaint against SPPA

SPPA appeared to recognise that it handled Mr Y’s case poorly and had offered Mr Y £500 for distress and inconvenience.

Referring to the Pensions Ombudsman’s factsheet on non-financial injustice10 (the Guidance), Mrs Y was of the opinion that Mr Y’s distress and inconvenience caused by SPPA’s “maladministration and incompetence” should fall at the very least in the severe category.

10 https://www.pensions-ombudsman.org.uk/sites/default/files/publication/files/Updated-Non-financial- injustice-September-2018-2_0.pdf

15 CAS-37680-Q4L8 In an email to Mr Y dated 10 Jan 2019, SPPA apologised that an earlier email issued that month by a trainee incorrectly referred to Tier 2 benefits.

In a letter to Mr Y dated 29 May 2019, SPPA advised Mr Y that it had not been possible to complete stage two of the IDRP in four months, due to the complexity of the case, the large amount of submitted evidence and gathering medical evidence from various parties. But it did confirm that the case was being referred to SPPA’s independent medical advisor.

In its initial decision letter of 5 July 2019, SPPA incorrectly awarded Mr Y Tier 1 benefits, despite Mr Y having previously informed SPPA of the reason for his dismissal by the Council. It was only after Mr Y raised the factual inaccuracy with SPPA that it correctly retracted the award in its letter of 19 July 2019 and confirmed that Mr Y automatically became a deferred member in accordance with the 2014 Regulations on 24 Sept 2015. SPPA accepted that the errors contained in its letter of 5 July 2019, as well as the prolonged period over which it had considered Mr Y’s appeal, could amount to maladministration and offered Mr Y £500 for significant distress and inconvenience.

Mr Y and the Council did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider. Mr Y and the Council have provided their further comments which do not change the outcome. I agree with the Adjudicator’s Opinion and note the additional points raised by Mr Y and the Council.

Mr Y’s further comments

Mr Y submits:-

16 CAS-37680-Q4L8 • The Adjudicator’s Opinion contains “numerous anomalies and misleading content” and “Whilst thanking TPO for the notably reasonably accurate content of the [Adjudicator’s Opinion]…I do not accept the Opinion in its entirety”.

• After reviewing TPO’s Guidance, he could very easily make a case for aspects of both ‘severe’ and ‘exceptional’ level awards.

• There is demonstrable evidence that Ms S and employees of the Fund and SPPA were too close to each other for a wholly professional decision to be made.

• It was misleading to say that on 12 June 2015 the HR manager complained about him and he was suspended on 17 June 2015. He was suspended because of a photograph he had submitted to the ET to suggest the possibility of bias in his appeal against dismissal. It was not due to the HR manager’s complaint.

• He disagrees with the Adjudicator’s view as set out in paragraphs 59 to 61 above. He says:

“The obvious question ie the dog that didn’t bark is “After 15 January 2015 unprompted inquiry of [Mr Y] regarding his, only when asked, expressed interest in IHR why, when, how, whom exactly made meaningful contact with employee [Mr Y] who has demonstrably expressed that attending work is making him ill? Noting that [Mr Y] did remain absolutely in the dark regarding IHR processes and procedures.”

• Mr Y believes that consideration should have been given to:-

o The background history between the Council’s management and himself, whether it demonstrated duplicity or connivance by either party in this complaint.

o When did the Council demonstrably advance his expressed interest in ill health retirement (that is after the Attendance Review Meeting)?

o The inconsistencies regarding integrity that occurred and persisted pertaining to the disciplinary investigation and hearing, the 11-month period of appeal against dismissal without notice, while his attempts to raise IHR were ignored, not responded to and/or covered up.

o Why were his enquiries ignored / covered up by the Council?

o Who suppressed the information regarding ill health retirement and why?

o When were any further inquiries about ill health retirement made and by whom?

As part of his further comments, Mr Y says no one from the Council’s HR department provided evidence at the ET hearing presided over by MacPherson J. I have set this aside as it is not relevant to the complaint accepted for investigation. I have also set

17 CAS-37680-Q4L8 aside Mr Y’s comments concerning Personal Interest Disclosure requests he submitted to the Council in 2013, and workplace issues while he was at the Council, as these are not pension matters within my jurisdiction to consider, although they do give an indication of Mr Y’s interaction with his former colleagues.

The Council’s further comments

The Council disagrees with the Adjudicator’s view set out in paragraph 67 above. The ET could not, the Council said, alter the reason for dismissal - albeit the ET could find Mr Y’s dismissal unfair (which ultimately it did). So, it follows that by not considering Mr Y’s appeal, the Council did not err.

It is not aware of any provision in either the Scheme Regulations or supplementary guidance that suggests pausing any decision and linking same to an ET judgment.

While Mr Y was unlikely to have considered anyone who assessed his appeal as independent, as they would have worked in HR and he was already decided in this respect, its view is that Mr Y’s subjective judgement is not the determining factor. Rather it must be viewed through an objective lens. That is, whether a normal person having the relevant information available would have considered the nominated person to lack independence, or to have been involved in the decision being appealed. In any event, Ms S was not involved in Mr Y’s dismissal, appeal or any decision not to progress ill health retirement, and could easily have considered the grounds, had they been in reasonable time.

Ombudsman’s decision

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Taking this evidence into consideration I cannot agree with the suggestion that Ms S was (or could reasonably have considered herself to be) independent for the purposes of considering Mr Y’s stage one appeal, as on an objective basis a reasonable person would view Ms S as lacking independence in this matter.

On Mr Y’s further comments

Mr Y submits that the Adjudicator’s Opinion contained “numerous anomalies and misleading content” but then, contradictory, refers to “the notably reasonably accurate content of the [Adjudicator’s Opinion]”.

Essentially, it would appear that Mr Y disagrees with the outcome of the Adjudicator’s Opinion.

The Courts have previously confirmed11 that the Pensions Ombudsman has the power to direct a payment for distress and inconvenience (i.e. for non-financial injustice) sustained as a consequence of maladministration. These are generally modest awards. Originally, the Courts indicated that an award of up to £1,000 might be appropriate, other than in exceptional cases. However, our approach was later reviewed12, and the current position is set out in the Guidance.

Each case is always assessed on its own merits, but I will generally consider the factors set out in the Guidance, as I did here, when deciding whether an award is appropriate.

In this case, I agree with the Adjudicator that the Council’s maladministration is limited to its handling of the April 2018 stage one appeal and that £500 for significant distress and inconvenience is sufficient for that, and in line with the Guidance. I find the other issues raised by Mr Y stem from employment matters which fall outside of my jurisdiction to consider.

11 For example, see Westminster City Council v Haywood [1996] 2 All ER 467 (obiter), as confirmed in City

and County of Swansea v Johnson [1999] 17 PBLR, and in later cases. 12 Following Baugniet v Capita Employee Benefits [2017] EWHC 501 (Ch) and Smith v Sheffield Teaching

Hospitals [2018] 004 PBLR 004 (011) 20 CAS-37680-Q4L8 Turning now to Mr Y’s complaint against SPPA. For the reasons given by the Adjudicator (as set in paragraphs 73 to 77 above), I agree that this amounts to serious distress and inconvenience and £1,000 is reasonable compensation for SPPA’s maladministration.

I uphold Mr Y’s complaint in part.

Directions

Dominic Harris Pensions Ombudsman

31 March 2026

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Appendix

Local Government Pension Scheme (Scotland) Regulations 2014 (SI 2014/164) Regulation 70, ‘First instance decisions’, provides: “(1) Any question concerning the rights or liabilities under the Scheme of any person other than a Scheme employer must be decided in the first instance by the person specified in this regulation. (2) In relation to any employment in which a person is a member or prospective member, the appropriate administering authority must decide— (a) any question concerning the person's previous service or employment; (b) any question about counting additional periods as membership or crediting additional pension. (3) Such a decision must be made as soon as is reasonably practicable after the person becomes a member in the employment. (4) Where a person is or may become entitled to a benefit payable out of a pension fund, the administering authority maintaining that fund must decide its amount. (5) That decision must be made as soon as is reasonably practicable after the event by virtue of which the entitlement arises or may arise. (6) Any question whether a person is entitled to a benefit under the Scheme must be decided by the Scheme employer who last employed the person. (7) That decision must be made as soon as is reasonably practicable after the earlier of— (a) the date the employment ends; or (b) the date specified in the notification mentioned in regulation 5(4) or, where relevant, the date referred to in regulation 5(5) (ending active membership). (8) In paragraphs (4) and (6) “benefit ” includes a return of contributions. (9) Any question concerning what rate of contribution a member is liable to pay to the appropriate fund must be decided by the member's Scheme employer. (10) Other questions in relation to any member or prospective member must be decided by the member's Scheme employer as soon as is reasonably practicable after the member or prospective member becomes a member or a material change affects his or her employment.”

Regulation 71, ‘Notification of first instance decisions’, provides: “(1) Every person whose rights or liabilities are affected by a decision under regulation 70 (first instance decisions) must be notified of it in writing by the body which made it as soon as is reasonably practicable. (2) A notification of a decision that the person is not entitled to a benefit must include the grounds for the decision.

22 CAS-37680-Q4L8 (3) A notification of a decision about the amount of a benefit must include a statement showing how it is calculated. (4) Every notification must contain a conspicuous statement giving the address from which further information about the decision may be obtained. (5) Every notification must also— (a) refer to the rights available under regulations 72 (applications to resolve disagreements) and 74 (reference of disagreement for reconsideration by Scottish Ministers); (b) specify the time limits within which the rights under those regulations may be exercised; and (c) specify the job title and the address of the person to whom applications under regulation 72 (applications to resolve disagreements) may be made.”

SPF Technical Bulletin No 26 – ‘The Local Government Pension Scheme (Scotland) Regulations Internal Disputes Resolution Procedure (Employing Authority Decisions) An important notice to all scheme employers’ (March 2009, updated February 2008, August 2015 and 2018)

The note covers employers’ first instance decisions, resolving disputes and the IDRP.

As relevant, ‘Decisions by Employers’ states:

“The Local Government Pension Scheme Regulations require employers to make decisions, known as “first instance decisions”, and inform their employees of these decisions. The following are some examples of “first instance decisions” employers are required to make;

➢ On commencing employment the employer must decide whether or not the employee is eligible to be a member of the scheme.

➢ The employer must decide the rate of pension contributions that the member must pay into the scheme. This rate changes each year in line with statutory guidance and is based on the members full time equivalent rate of pay.

➢ When scheme membership ceases, the employer decides what benefit the member is entitled to.

➢ The employer may decide that an employee is not entitled to a benefit, e.g. if early retirement on the grounds of ill-health is considered and the employer’s independent medical adviser has reported that the member’s does not meet the criteria for ill health retirement in terms of the Regulations”

As relevant, ‘Resolving Disputes’ states:

“If a dispute cannot be resolved by the employer the member can invoke the two- stage Internal Disputes Resolution Procedure (IDRP) by completing the appropriate IDRP appeal form. Any disputes received under the Internal Disputes Resolution 23 CAS-37680-Q4L8 Procedure must be made within six months of the date the member is notified of the decision which is being appealed against.

Under Stage 1 of this procedure the dispute should be directed to the person nominated by the employing authority to consider the first stage of the appeal. The nominated person must be independent and must not have been involved in any capacity in the decision against which the member is appealing...”

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