Senior Judges’ Court of the Sovereign Base Areas in Cyprus dismisses judicial review by employees against pay reductions

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The Republic of Cyprus was granted independence in 1960. Under the terms of the Treaty of Establishment, the United Kingdom reserved two areas on the south coast of the island called Akrotiri and Dhekelia, known as the Sovereign Base Areas (“SBAs”). The UK Government operates a military base in the SBAs. The Queen appoints an Administrator, who is empowered by an Order in Council to make laws for the peace, order and good government of the SBAs.

A number of Cypriots are employed to work in the SBAs for the Administrator and British Forces Cyprus. They are known as “locally employed civilians (“LECs”). By ordinance in 2012, the pay of LECs was frozen for austerity reasons. The pay freeze was extended by further ordinance in 2013, and that ordinance was the subject of an unsuccessful claim for judicial review by 55 LECs against the Administrator.

In 2015, the Administrator made another ordinance, this time to impose pay reductions on LECs, again for austerity reasons. Three claims for judicial review were lodged in 2015, this time by a much larger number of LECs, divided into three different groups of employee.

The claims challenged the pay reduction ordinance on wide-ranging grounds, including a breach of human rights, breach of legitimate expectation, failure to lawfully consult, failure to take into account material considerations.

Following an oral hearing, permission to apply for judicial review on limited grounds was granted on 11 October 2017 by Ockelton J, Acting Senior Judge of the Senior Judges’ Court of the SBAs. The claimants were permitted to pursue their claim that the ordinance was contrary to the Protection of Property Ordinance 2004, which enshrines a right that is equivalent to Article 1 of the First Protocol to the European Convention on Human Rights, namely the right to the peaceful enjoyment of possessions (“A1P1”). One group of claimants was also permitted to argue that the Administrator had unlawfully failed to benchmark their pay against certain private and public sector employers in the Republic.

The claimants appealed against the refusal of permission on most grounds, and that appeal was dismissed following an oral hearing by a panel of three judges sitting in the Senior Judges’ Court (Ouseley J, HHJ Pelling and HHJ Dight CBE) by judgment dated 7 May 2019.

The claims were then listed for a substantive hearing on the permitted grounds, but the Covid-19 pandemic resulted in multiple adjournments. The hearing eventually took place remotely in November 2021.

By judgment handed down on 22 June 2022, Ockelton J dismissed the claims for judicial review. In relation to the human rights ground, the judge reviewed Strasbourg and UK jurisprudence and held that the future pay of the claimants (which had been reduced by the ordinance under challenge) did not constitute a “possession” for the purposes of the Protection of Property Ordinance 2004 or A1P1. Accordingly, there was no requirement on the Administrator to show that an interference with that future pay was justified. The judge also held that the Administrator had not failed to take into account the correct benchmark for the specific claimants permitted to advance that ground.

Carine Patry QC and Matthew Fraser represented the Administrator at the substantive hearing, instructed by the Government Legal Department. Matthew Fraser has acted for the Administrator throughout the seven-year-long judicial review of the pay reduction ordinance, led by Samantha Broadfoot QC at all stages prior to the substantive hearing. Samantha Broadfoot QC also acted for the Administrator in the earlier pay freeze litigation.

The Judgment can be found here.

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