Unite the Union and Paul Gallagher v The Minister for Finance and Others

• Jurisdiction: Ireland
• Judge: Kearns P.
• Judgment Date: 08 October 2010
• Neutral Citation: [2010] IEHC 354
• Court: High Court
• Date: 08 October 2010

[2010] IEHC 354

THE HIGH COURT

1061 JR/[2009]

Unite the Union & Gallagher v Minister for Finance & Ors

BETWEEN

UNITE THE UNION AND PAUL GALLAGHER

APPLICANTS

AND

THE MINISTER FOR FINANCE, IRELAND AND THE ATTORNEY GENERAL

RESPONDENT

FINANCIAL EMERGENCY MEASURES IN PUBLIC INTEREST ACT 2009 S2

FINANCIAL EMERGENCY MEASURES IN PUBLIC INTEREST ACT 2009 S1

FINANCIAL EMERGENCY MEASURES IN PUBLIC INTEREST ACT 2009 S2(1)

CONSTITUTION ART 40.1

CONSTITUTION ART 40.3.1

CONSTITUTION ART 40.3.2

CONSTITUTION ART 43

TREATY ON EUROPEAN UNION ART 101

TREATY ON EUROPEAN UNION ART 103(1)

FINANCIAL EMERGENCY MEASURES IN PUBLIC INTEREST ACT 2009 S2(A)

FINANCIAL EMERGENCY MEASURES IN PUBLIC INTEREST ACT 2009 S2(B)

FINANCIAL EMERGENCY MEASURES IN PUBLIC INTEREST ACT 2009 S8

CENTRAL BANK ACT 1942

CENTRAL BANK & FINANCIAL SERVICES ACT 2003

CENTRAL BANK & FINANCIAL SERVICES AUTHORITY OF IRELAND SUPERANNUATION SCHEME 2008 SI 99/2008

CENTRAL BANK OF IRELAND v GILDEA 1997 2 ILRM 391

EC REG 3603/93

GARDA REP ASSOCIATION v MIN FOR FINANCE UNREP CHARLETON 25.3.2010 2010 IEHC 78

MULHOLLAND v BORD PLEANALA (NO2) 2006 1 IR 453

HAIRE & CO LTD v MIN FOR HEALTH & CHILDREN UNREP MCMAHON 17.12.2009 2009/28/ 6995 2009 IEHC 562

DALY v REVENUE CMSR 1995 3 IR 1

FINANCE ACT 1990 S14

FINANCE ACT 1990 S26

FINANCE ACT 1987 S18

CENTRAL BANK ACT 1942 S6D(5)

DALY v REVENUE CMRS 1995 3 IR 1

QUINNS SUPERMARKET v AG 1972 IR 1

MURTAGH PROPERTIES v CLEARY 1972 IR 330

PLANNING & DEV BILL 1999 (2000) 2 IR 321

BRENNAN v AG 1983 ILRM 449

BLAOSCAOD MOR TEO v CMRS PUBLIC WORKS (NO3) (2000) 1 IR 6

PENSIONS

Civil Service

Pension levy - Public servants - Public service pension scheme - Self-funded pension scheme - Exemptions - Respondent's discretion - Equality - Property rights - Double taxation - Reasons - Proportionality - Central Bank and Financial Services Authority of Ireland - Whether ss 1 and 2 of Act of 2009 unconstitutional - Whether public sector body - Whether outside scope of Act - Whether materially distinguishable from other groups of public servants - Whether unjust attack on property rights - Whether interference with existing contractual entitlements - Garda Representative Association v Minister for Finance [2010] IEHC 78 (Unrep, Charleton J, 25/3/2010) and Haire & Co Ltd v Minister for Health and Children [2009] IEHC 562 (Unrep, McMahon J, 10/3/2009) followed; Central Bank of Ireland v Gildea [1997] 2 ILRM 391; Mulholland v An Bord Pleanála (No 2)[2005] IEHC 306, [2006] 1 IR 453; Quinn's Supermarket Ltd v Attorney General [1971] IR 1; Murtagh Properties v Cleary [1972] IR 330; Re Planning and Development Bill 1999 [2000] 2 IR 321; Brennan v Attorney General [1983] ILRM 449 and An Blascaod Mór Teo v Commissioner of Public Works (No 3) [2000] 1 IR 6 considered - Daly v Revenue Commissioners [1995] 3 IR 1 distinguished - Financial Emergency Measures in the Public Interest Act 2009 (No 5), ss 2 and 8 - Central Bank Act 1942 (No 22), s 6D(5) - Central Bank and Financial Services Act 2003 (No 12) - Central Bank and Financial Services Authority of Ireland Superannuation Scheme 2008 (SI 99/2008) - Constitution of Ireland 1937, arts 40.1, 40.3 and 43 - Treaty on European Union, arts 101 and 103(1) - Council Regulation 3603/93Application refused (2009/1061JR - Kearns P - 8/10/2010) [2010] IEHC 354

Unite the Union v Minister for Finance

Facts This application for judicial review arose out of the decision of the respondent of 28 August 2009 not to exempt certain employees of the Central bank and Financial Services Authority of Ireland (the CBFSAI) from deductions authorised by the provisions of s. 2 of the Financial Emergency Measures in the Public Interest Act 2009, commonly referred to as "the pension levy". The applicants sought an order of certiorari quashing the aforementioned decision of the respondent and also sought declarations that ss. 1 and 2 of the Act of 2009 were invalid having regard to the provisions of Articles 40.1, 40.3.1, 40.3.2 and 43 of the Constitution of Ireland and further a declaration that the application of the provisions of the Act of 2009 to employees of the CBFSAI contravened Article 101 and/or Article 103(1) of the Treaty on European Union by consisting of a form of monetary financing by the Central bank of public sector obligations vis-à-vis third parties. The applicant maintained that its members were a particular class or group of public servants which by reason of exceptional circumstances because of particular aspects of their employment were materially distinguished from other classes of public servants to which s. 2 of the Act of 2009 applied. The applicant's members were members of the CBFSAI's own superannuation scheme and claimed its members would not get any benefit out of the deduction made pursuant to s. 2 and further claimed they were being unfairly penalised and/or inequitably affected by the full application of the deductions to their remuneration. It was submitted that the respondent erred in including the CBFSAI in the definition of a public service body in the Act and in fact should have included it in the Schedule of the Act, where it listed all similar semi-state bodies. The applicant submitted that the respondent's decision was unlawful, irrational and ultra vires. Specifically it was submitted that the reasons advanced by the respondent failed to address the test provided for in section 8 of the Act, the reasons advanced were irrational and the decision did not demonstrate any lawful basis on which the respondent determined that the aspects and conditions of employment of the applicant's members were not materially distinguishable from other groups or classes of public servants covered by the provisions of the Act of 2009. It was submitted on behalf of the respondent that employees of the CBFSAI were public servants and their pension scheme was a public service pension scheme within the meaning of the Act of 2009. It was further submitted that the reasons advanced by the respondent were adequate.

Held by Kearns P. in refusing the application: That the CBFSAI was expressly included within the definition of "public service body" in section 1 of the Act and consequently the CBFSAI's employees were "public servants" within the meaning of s. 1 and for the purposes of the Act of 2009 and, accordingly, were lawfully subject to the deductions provided for in section 2. Furthermore, the CBFSAI pension scheme came within the definition of "public service pension scheme" in section 1. Consequently, the issue in this case was solely the lawfulness of the respondent's decision under section 8 not to exempt the applicant's members from the requirements of section 2. It was clear from the letter of the 28 August 2009 sent by the respondent that he had particular regard to the provisions of s. 8 of the Act and did consider whether there were any circumstances which materially distinguished employees of the CBFSAI from other class or groups of public servants to which s. 2 applied. The respondent's decision was not irrational and the reasons supplied in support of his decision were adequate. The applicant did not establish that employees of the CBFSAI were being subjected to unequal treatment and did not establish that their property rights were being interfered with to such an extent as to amount to an unjust attack. Furthermore, the applicants failed to rebut the presumption that the Act of 2009 was constitutional. Finally, because the deductions provided for in s. 2 applied to all public servants generally, the arguments based on Articles 101 and 103 of the Treaty were misconceived and could have no application.

Reporter: L.O'S.

1 JUDGMENT of Kearns P. delivered the 8th of October, 2010

INTRODUCTION

2 This is an application for judicial review arising out of the decision of the Minister for Finance of 28 ^th August, 2009, not to exempt certain employees of the Central Bank and Financial Services Authority of Ireland ("the CBFSAI") from deductions authorised by the provisions of s. 2 of the Financial Emergency Measures in the Public Interest Act 2009, commonly referred to as "the pension levy".

3 The applicant is Unite, a trade union representing approximately 75% of the staff of the CBFSAI. Mr Paul Gallagher is the senior executive officer of Unite and is the second named applicant. The first named respondent is the Minister for Finance.

RELIEFS SOUGHT

4 On 19 ^th October, 2009, the applicants were granted leave by this Court (Peart J.) to bring an application for judicial review seeking a number of reliefs including:

5 1. An Order of certiorari quashing the decision of the Minister for Finance of 28 ^th August, 2009, refusing to grant the applicant's members exemptions from deductions under s. 2 of the Financial Services Measures in the Public Interest Act 2009.

6 2. A Declaration that ss. 1 and 2 of the Act of 2009 are invalid having regard to the provisions of Article 40.1 of the Constitution (equality before the law.).

7 3. A Declaration that ss. 1 and 2 of the Act of 2009 are invalid having regard to the provisions of Articles 40.3.1, 40.3.2 and Article 43 of the Constitution (personal and property rights).

8 4. A Declaration that the application of the provisions of the Act of 2009 to employees of the CBFSAI contravenes Article 101 and/or Article 103(1) of the Treaty on European Union by consisting of or constituting a form of monetary financing by the Central Bank of public sector obligations vis-á-vis third parties.

THE ACT OF 2009

9 As is well known the Act of 2009 was passed to meet the unprecedented economic crisis affecting the State.

10 Section 2 of the Act provides for a system of deductions from the remuneration paid to (a) "public servants" who (b) are members or beneficiaries of a "public...