Redundant worker compensated for loss of final salary pension benefits

A woman who was made redundant unfairly has won her fight to be compensated for her loss of pension rights even though she found a new job with a higher salary.

While she was with her employer she was a member of a final salary pension scheme. When she moved to her new company she became a member of a money purchase scheme which was less beneficial.

The woman made a claim for compensation on the basis that her redundancy dismissal had been unfair.

The employer who made her redundant submitted that the loss of pension benefit was offset by the fact that she received a higher salary at her new company.

The employment tribunal held that the woman’s new employment at a higher rate of pay meant she could not claim for loss of earnings.

However, it also held that that the original final salary scheme was a unique benefit and by losing it the woman would face a continuing loss of pension. She was therefore entitled to be compensated for its loss.

That decision has now been upheld by the Employment Appeal Tribunal.