IBM UK Holdings Ltd & Anor v Dalgleish & Ors

IBM UK Holdings Ltd & Anor v Dalgleish & Ors

Holdings was in breach of its Imperial duty and contractual duty of trust and confidence by implementing the Project Waltz changes (closure of DB accrual, change to early retirement policy, and non-pensionability agreements) in a manner inconsistent with reasonable expectations engendered by prior communications, without adequate justification, and by conducting a misleading and inadequate consultation process. The Exclusion Power was validly introduced but subject to an implied limitation preserving the final salary link; its exercise to close the Plans was within scope but, in the circumstances, breached the duty of good faith.

Parties
First Claimant: IBM United Kingdom Holdings Limited; Second Claimant: IBM United Kingdom Limited; First Defendant: Stuart Dalgleish; Second Defendant: Lizanne Harrison; Third Defendant: IBM United Kingdom Pensions Trust Limited
Jurisdiction
England and Wales
Judgment Date
04 April 2014
Procedural Posture
Civil (pensions/employment) / Judgment After Trial
Outcome
Holdings was found in breach of its Imperial duty and contractual duty of trust and confidence in relation to the Project Waltz changes and consultation process.
Legal Topics
Implied Duty of Good Faith, Employer Discretion, Pension Scheme Amendments, Employee Consultation, Breach of Trust and Confidence
Employment Law Pensions Law Trust Law Contract Law Implied Duty of Good Faith Employer Discretion Pension Scheme Amendments Employee Consultation +1 more

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Parties

IBM United Kingdom Holdings Limited

First Claimant

IBM United Kingdom Limited

Second Claimant

Stuart Dalgleish

First Defendant

Lizanne Harrison

Second Defendant

IBM United Kingdom Pensions Trust Limited

Third Defendant

Procedural Posture

Civil (pensions/employment) / Judgment After Trial

Legal Issues

  1. 1 Whether the Main Plan Exclusion Power was validly introduced into the Main Plan
  2. 2 Whether the exercise of the Exclusion Powers to close the DB Plans to future accrual was within the terms and scope of the powers
  3. 3 Whether the exercise of the Exclusion Powers was for an improper purpose

Ratio Decidendi

Holdings was in breach of its Imperial duty and contractual duty of trust and confidence by implementing the Project Waltz changes (closure of DB accrual, change to early retirement policy, and non-pensionability agreements) in a manner inconsistent with reasonable expectations engendered by prior communications, without adequate justification, and by conducting a misleading and inadequate consultation process. The Exclusion Power was validly introduced but subject to an implied limitation preserving the final salary link; its exercise to close the Plans was within scope but, in the circumstances, breached the duty of good faith.

Court Disposition

Holdings was found in breach of its Imperial duty and contractual duty of trust and confidence in relation to the Project Waltz changes and consultation process.

Orders

  • Declaration that Holdings breached its Imperial duty and contractual duty of trust and confidence by implementing Project Waltz changes and conducting a misleading consultation process.
  • Further hearing to determine appropriate remedies.