Garda Representative Association -v- Minister for Finance, [2010] IEHC 78 (2010)

Docket Number:2009 800 JR
Party Name:Garda Representative Association, Minister for Finance
Judge:Charleton J.





THE MINISTER FOR FINANCERESPONDENTJUDGMENT of Mr. Justice Charleton delivered the 25th day of March 2010.

  1. The applicant claims that the respondent has failed to properly exercise his discretion to exclude gardaí from an austerity measure known as the "pension levy". It is argued that the Minister for Finance did not properly consider their application in that regard and, further, that he gave no adequate reasons for his refusal. All of this has a background and a context. From September, 2008 it became obvious that Ireland was facing a severe monetary crisis. There have been three national budgets announced by the Minister for Finance in Dáil Éireann since that month with the stated purpose of returning the public finances to something approaching a manageable balance. Tax revenue has fallen markedly while State expenditure has remained broadly the same as before. Austere fiscal measures were introduced by the Government in an attempt to control the public finances. One of these involves deductions from public service pay and this is made lawful by the Financial Emergency Measures in the Public Interest Act 2009. That Act is at issue in this judicial review. In effect, it makes less money available to public servants by charging them an extra percentage of money from their pay for the pension provision which the State makes for them.

  2. As to the correct response to the economic situation facing the country, public debate may inform the choices available to Government. Ultimately, however, the challenge in alleviating the nation's problems lies with those who are elected to Dáil and Seanad Éireann and who, in turn, have chosen the Government. The court cannot, and does not, have any view in the executive or political sphere. If, however, in the imposition of any austerity measure a legal error is made then, clearly, this may be subject to the possibility of judicial review.

    The 2009 Act

  3. The conditions and fundamental terms of employment of public servants tend in the modern era to be circumscribed by statute and regulation. Since the public service involves many different forms of employment, the conditions under which people work, their rates of pay and their pension entitlements tend to differ from sector to sector. It is beyond doubt, however, that those who are permanently employed within the public service enjoy pension entitlements by which the State guarantees to abide; in contrast to privately funded pension arrangements which are markedly subject to variation in the financial markets. The fiscal measure in question in this case aimed at ameliorating our current economic crisis by levying members of the public service through taking from their pay packet a percentage that depended upon their rate of remuneration as a payment towards the stability and amplitude of public service pension arrangements. This was implemented by the Financial Emergency Measures in the Public Interest Act 2009. That Act begins with an unusually strong series of recitals:-

    "WHEREAS a serious disturbance in the economy and a decline in the economic circumstances of the State have occurred, which threaten the well-being of the community;

    AND WHEREAS as a consequence a serious deterioration in the revenues of the State has occurred and there are significant and increasing Exchequer commitments in respect of public service pensions;

    AND WHEREAS it is necessary to cut current Exchequer spending substantially to demonstrate to the international financial markets that public expenditure is being significantly controlled so as to ensure continued access to international funding, and to protect the State's credit rating and reverse the erosion of the State's international competitiveness;

    AND WHEREAS the burden of job losses and salary reductions in the private sector has been very substantial and it is equitable that the public sector should share that burden;

    AND WHEREAS it is necessary to take the measures in this Act as part of a range of measures to address the economic crisis;

    AND WHEREAS the value of the public service pensions is significantly and markedly more favourable than those generally available in other employment"

  4. The actual deduction by way of the pension levy is enabled under s. 3 of the Financial Emergency Measures in the Public Interest Act 2009, which requires payment of a contribution from remuneration as required by s.2, whereby the Minister for Finance can make regulations in order to calculate the relevant amount made payable as a contribution from public servants and collect and recover it. Under s. 4 of the Act, public servants are obliged to make such payments for the benefit of the Exchequer. In practice, the sum is deducted at the source of payment. In addition to public servants, reductions are enabled by virtue of s. 9 to the rates of payment for health professionals such as doctors, dentists, pharmacists, optometrists, ophthalmologists, podiatrists and chiropodists, who give services to the State. Other payments made by the State, including those due under existing contracts may be reduced pursuant to section 10. Since the Act is an emergency measure, so expressed, under s. 13 it must be first reviewed on the 30th June, 2010, by the Minister for Finance and, thereafter, every other year while it remains in force. The purpose of the ministerial review is to consider whether the continued operation of the Act is necessary and, in that regard, a report must be laid before each House of the Oireachtas by the Minister.

  5. Where a doubt arises as to whether a person is properly the subject of a deduction under the Act then, s. 15 provides that this issue is to be submitted to the Minister by the public servant who would authorise the payment, and hence the reduction in payment of the remuneration concerned, to be determined finally by the Minister. Section 1 of the Act makes it clear in express terms that the pension levy is intended to apply to every public servant and to every public service body, save for those expressly excluded. The broad scope of the Act covers those who are both public servants and are part of a public service pension scheme. Certain exclusions occur in s.1; namely, the President, a member of the judiciary or a military judge. By its terms, the Act expressly includes within the scheme; the Civil Service, the Garda Síochána, the Permanent Defence Forces, local authorities, the Health Service Executive, the Central Bank and Financial Services Authority of Ireland and others who are subject to a public service pension scheme, as so defined. A schedule to the Act excludes from its operation certain semi-State commercial bodies and companies, like Bord na Móna and the Dublin Airport Authority and this is enabled by the definition of a public service body in s. 1 (h).

  6. It is clear on reading the Act that a considered choice has been made as to those from whom the levy will be taken and those who are excluded from the operation of the Act. It is necessary to quote in full s. 2 of the Act which provides for deductions to be made from the remuneration of public servants:-

    "2.-(1) This section applies to a person-

    (a) who-

    (i) is a public servant on 1 March 2009, or

    (ii) is not a public servant on that date but after that date

    is appointed or otherwise becomes a public servant, and

    (b) who, on 1 March 2009 or at any time afterwards-

    (i) is a member of a public service pension scheme,

    (ii) is entitled to a benefit under such a scheme, or

    (iii) receives a payment in lieu of membership in such a


    (2) In this section, a person to whom this section applies is

    referred to as a "relevant person".

    (3) The person who is responsible for, or authorises, the payment

    of remuneration to a relevant person shall deduct or cause to be

    deducted an amount at the applicable rate or rates specified in the

    Table in this subsection-

    (a) in the case of the period 1 March 2009 to 31 December

    2009, in respect of that period, and

    (b) in the case of the year 2010 and each subsequent year, in respect of the year concerned,from the remuneration from time to time payable to the relevant person during that period or any such year.


    Amount of RemunerationRate of deduction

    Up to 15,0003 per cent

    Any excess over 15,000 but not over

    20,0006 per cent

    Any amount over 20,000 10 per cent

    (4) The deduction which this section requires shall be made in accordance with any regulations made by the Minister under section 3.

    (5) This section has effect notwithstanding-

    (a) any other enactment,

    (b) any pension scheme or arrangement,

    (c) any other agreement or contractual arrangement, or

    (d) any understanding, expectation, circular or instrument or other document".

  7. Under s.8 of the Act a residual discretion is vested in the Minister to exempt a particular class or group of public servants, or to otherwise modify the obligation to pay under section 2. This would allow the Minister, for instance, to defer payments for a particular period, or to exempt a particular kind of public servant either entirely or by reducing the full extent of the statutory obligation just set out above. Since s. 8 is central to this judicial review I now quote it:-

    "8.-Where the Minister is satisfied that there is a particular class or group of public servants who, by reason of exceptional circumstances (because of some particular aspect or condition of their employment, office or position) which, in the Minister's opinion, are materially distinguished from other classes or groups of public servants to which section 2 applies, then the Minister, if he or she considers it to be just and equitable in all the circumstances to do so, may by direction-

    (a) exempt that class or group from deductions under section2, either entirely or to such extent as the Minister considers appropriate, or

    (b) modify the obligation under section 2 to make...

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