Douglas Harvey Barber V Guardian Royal Exchange Report

Introduction

The aim of this report is to investigate the Douglas Harvey Barber v Guardian Royal Exchange case. The main findings of this report is to see what effect Douglas Harvey Barber had on the financial services industry before and after his case.

Background

Douglas Harvey Barber

q Barber Douglas Harvey was born on 29th September 1928 in Derbyshire.

q He died on 26th May 1989 at age 60.

q He worked for Guardian Royal Exchange until he was made redundant at age 52.

q He was a member of his companies “Contracted Out”, Non Contributory, Occupational Pension Scheme that had retirement ages Of 57 for women and 62 for men

q Members made redundant within 5 years of retirement were given an immediate early retirement pension.

Guardian Royal Exchange

The Guardian name was established in 1821. Originally Guardian Fire & Life, the Company was renamed as Guardian Assurance in 1902.

In the mid 1960's, Guardian Assurance established a new base at Lytham St Annes in Lancashire for its expanding Life and Pensions business

In 1968 the company merged with Royal Exchange Assurance to form the Guardian royal exchange group

In 1999, the Life and Pensions businesses of GRE (which included Guardian Financial Services) along with the Guardian name were acquired by AEGON UK part of the global AEGON ay group

What Happened To Douglas Harvey Barber and The Effect?

In 1980 the Guardian Royal Exchange made Douglas Harvey Barber redundant. As Douglas Harvey Barber pension scheme was “Contracted Out” his company pension replaced the Second State pension and therefore he received a larger lump sum than other workers that was probably tax free that could spend or invest. The options available to Douglas Harvey Barber for income was to get a job and this became difficult, as he was 52 years old at the time, the only income he would be able to receive is unemployment benefits. If he had been a Woman he would have been within 5 years of retirement and would have been able to claim an immediate pension. Knowing this information he thought this was unfair and began legal proceedings against the Guardian Royal Exchange

Douglas Harvey Barber Case

The 2 two points that where heavily stressed where that:

1. Douglas Harvey Barber view was that he was a victim of unlawful discrimination based on sex, Mr Barber therefore instituted proceedings in the industrial relations tribunals. This was under article 119 of the Treaty of Rome he was being discriminated against on the basis of his sex

2. Pensions are “deferred” payment of benefits for work and not a fringe benefit at management discretion.

Bad News For Guardian Royal Exchange

The fact that Douglas Harvey Barber proceeded in compiling a case to take to the high court it had a sense of doom around it for the Guardian Royal Exchange, because if Barber was to win the case it could put a severe dent in their pension scheme and cost the company millions of pounds.

When his claim was dismissed at first and second instance, he appealed to the Court of Appeal. That court decided to stay the proceedings and to ask the Court of Justice to give a preliminary ruling on the following questions :

"(1) When a group of employees are made compulsorily redundant by their employer in circumstances similar to those of this case and receive benefits in connection with that redundancy, are all those benefits 'pay' within the meaning of Article 119 of the EEC Treaty and the equal pay directive (75/117/EEC), or do they fall within the equal treatment directive (76/207/EEC), or neither?

(2) Is it material to the answer to Question 1 that one of the benefits in question is a pension paid in connection with a private occupational pension scheme operated by the employer (' a private pension')?

(3) Is the principle of equal pay referred to in Article 119 and the equal pay directive infringed in the circumstances of the present case if :

(a) a man and a woman of the same age are made compulsorily redundant in the same circumstances, and in connection with that redundancy, the woman receives an immediate private pension but the man receives only a deferred private pension, or

(b) the total value of the benefits received by the woman is greater than the total value of the benefits received by the man?

(4) Are Article 119