Carl Sanderson v NHS Business Services Authority [2019] EWHC 2900 (Ch)

Carl Sanderson v NHS Business Services Authority [2019] EWHC 2900 (Ch) concerned an appeal from the Pensions Ombudsman on the construction of the National Health Service Pension Scheme Regulations 1995. Mr Justice Trower dismissed the appeal, holding that a self-employed locum GP who died during a break between working sessions was not in pensionable employment at the time of her death and therefore her widower was not entitled to the higher death-in-service benefits payable under regulations F1, G2 and G7 of the 1995 Regulations.

Dr Helen Sanderson was a self-employed locum GP who worked through Greenfields Medical Chambers Ltd, a company through which practices book locums. She had an ad hoc working pattern, agreeing in advance to work sessions at different GP practices. She died on 24 December 2014, having worked on 15 out of the previous 23 days of December and last worked on 23 December. At the time of her death she was next booked to work on 8 January 2015 and had a significant number of further bookings for January to April 2015. NHS BSA awarded Mr Sanderson death benefits calculated on the basis that Dr Sanderson died in deferment, not in pensionable employment. The benefits payable were materially less generous than death-in-service benefits would have been.

The appellant challenged the decision through the Scheme’s internal dispute resolution procedure and then complained to the Pensions Ombudsman. A senior adjudicator rejected his complaint, and the Ombudsman upheld that decision on 30 January 2019. Mr Sanderson appealed on a point of law.

The 1995 Regulations provide that a member is in pensionable employment if in NHS employment in respect of which the member contributes to the Scheme. Although Dr Sanderson was self-employed, the Regulations were modified by Schedule 2 (introduced by the National Health Service Pension Scheme (Amendment) Regulations 2002) to allow self-employed locum practitioners to be members. A locum practitioner is defined as a registered medical practitioner whose name is on a medical performers list and who is engaged under a contract for services to deputise or assist temporarily in the provision of services. Regulation R1(1) applies the 1995 Regulations to locum practitioners as if they were officers employed by the relevant listing authority. Paragraph 9A of Schedule 2 provides that where a locum ceases to be engaged as such and is re-engaged within three months, the period whilst not so engaged does not count as a period in pensionable employment.

The appellant argued that Dr Sanderson was engaged under contracts for services at the time of her death because she was contractually committed to attend on 8 January and had a significant number of bookings thereafter. He submitted that the word engaged refers to the contractual commitment rather than to the performance of work. He contended that Dr Sanderson’s working pattern was such that she was engaged throughout the Christmas and New Year gap. He also argued that the Ombudsman’s focus on time actually worked would lead to arbitrary and unfair results, and that the absence of contributions on a particular day did not determine whether a member was in pensionable employment.

NHS BSA submitted that a locum was engaged only when actually working. It argued that the word engaged meant occupied rather than committed or obliged, and that a member under an obligation to provide services in the future was not engaged now. NHS BSA’s primary case was that engagement referred only to the actual period of time in which the locum was working, which would exclude lunch breaks and travelling time between sessions. Its secondary case was that whether a locum was engaged was a matter of fact and degree, but that in any event Dr Sanderson was not engaged during the two-week Christmas break. NHS BSA also relied on the definition of pensionable employment requiring employment in respect of which the member contributes, and submitted that days not worked were not days in respect of which a member contributed. It drew an analogy with employment law cases on when an umbrella contract of employment exists for casual workers, submitting that there must be an irreducible minimum of mutual obligations during breaks in actual work.

Mr Justice Trower accepted that a locum was not engaged simply because of a contractual obligation to provide services at some time in the future. He held that the structure of the unmodified 1995 Regulations provided for death-in-service benefits to flow from the inherent nature of the current relationship between the member and the person for whom they are working. The entitlement arises from the status of a member at a specific moment in time, namely whether the member is in pensionable employment at the time of death. When the 2002 Regulations introduced death-in-service benefits for locums, the draftsman adopted an approach based on the current status of a member by identifying the equivalent current characteristics required to enable a self-employed member to be deemed to be an officer employed by the relevant authority.

The judge considered that the definition of locum practitioner, expressed in the present tense as who is engaged, confirmed an intention that the relevant characteristics should relate to a current state of affairs equivalent to current employment. The contract for services was the source of the engagement in the same way that a contract of employment is the source of employment. In the context of self-employment, a contractor was more likely to come under current obligations only during the course of the actual provision of service, though this would depend on the nature of the contract. The deeming provisions meant that there ought only to be an engagement capable of giving rise to death-in-service benefits if what constituted that engagement could be linked in an appropriate manner to Scheme contributions.

Mr Justice Trower held that a locum GP will be engaged under a contract for services during any period in which he or she is bound by an obligation to perform service now under such a contract. The period of deemed pensionable employment extends to any time at which a locum is engaged in any activity which is incidental or ancillary to obligations under the contract, or to any period of time during which a locum is not doing something they would otherwise be doing because they are bound by the contract. Acts or omissions of that character should be regarded as part of the locum’s engagement. By way of illustration, travelling between home and a practice, or between practices where sessions have been booked at different locations, and lunch and other breaks may all be part of the engagement to the extent that they are part and parcel of the processes by which a locum GP is enabled properly to perform their duties.

The judge left open various other circumstances in which engagement might be established, such as where a locum commits to work full time at a single practice for several days such that there is never a cessation and re-engagement within the meaning of paragraph 9A of Schedule 2. However, in Dr Sanderson’s case there was a break of more than two weeks during which there was no finding that she was occupied under any contract for services by doing anything that amounted to direct performance of her duties or any ancillary activities. The critical question was whether at the relevant time the member was doing something to perform or assist in performing the contracted service. The Christmas break was a pause from engagement under the contracts for services to which Dr Sanderson had been and remained committed. There was no evidence that the break was required to enable her better to perform her duties. The inference was that she was hoping to enjoy a well-earned holiday, but a break of that quality was not part of any engagement.

In short, a locum GP is engaged under a contract for services for pension purposes only when bound by an obligation to perform service now, and a fortnight’s Christmas break between working sessions fell outside that period.

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