13 March, 2018
It would be difficult to miss the media coverage of university staff at over 60 universities striking over proposed pension changes. Universities UK want to change the Universities Superannuation Scheme from a defined benefit scheme (which would provide a guaranteed retirement income) to a defined contribution scheme, meaning pensions would be subject to changes in the stock market. Academics claim the changes could leave them up to £10,000 a year worse off in retirement and the University and College Union says young lecturers would be worse affected, with some losing up to half of their pensions.
The proposals arise from a claim by Universities UK that its pension scheme has a £6bn deficit and it has a legal duty to devise a credible plan to tackle it by this summer. Without reform, pensions contributions would have to rise steeply, which in turn would mean spending cuts in other areas such as teaching, student support and research. It could even lead to redundancies. Universities UK says that even after the changes the scheme would compare well; with employer contributions double the private sector average.
University and College Union General Secretary Sally Hunt said "At the core of our proposals is for universities to accept a small amount of increased risk, but only at a level a majority have recently said they are comfortable with. Doing this would enable us to provide a decent, guaranteed pension at a more modest cost with smaller contribution increases."
Talks aimed at resolving the dispute between the University and College Union and Universities UK brokered by the conciliation service Acas have been underway over the course of the last few weeks. The Union said it was pleased that Universities UK had agreed to further talks to try and end the strike action, and Universities UK described negotiations as "positive". However, striking staff turned down an agreement reached by Union leaders and employers on 13th March, resulting in continued strike action.
More than one million students have been affected by the strikes, with lecturers not teaching, marking or carrying out research. Whilst the strike action is generally supported by students, over 90,000 students have signed petitions asking for compensation for the hours of tuition they will miss because of the strikes.
Students who pay fees have rights under consumer law, although how far these rights apply to industrial disputes is untested. It has been argued that if compensation is not paid, the universities will be profiting from the dispute as they will gain money from not paying striking lecturers. Students had been advised that it would be necessary for a test case to be brought before the Courts to ascertain any right to refunded fees.
However, in a surprising move, Kings College London announced it had set up a fund to compensate students affected by class and lecture cancellations due to the strike action. Kings said it was saving money from striking lecturers' salaries and would use this to refund students. "Once the nature and scale of the disruption has become clearer, we will develop a mechanism for considering cases for any further compensation that may be warranted in light of cancelled classes."
Universities Minister Sam Gyimah told university leaders that "tougher accountability was now the new landscape of higher education". He went on to say "this is not a blip. We are once again experiencing the 'winds of change' in the university sector. Gone are the days when students venerated institutions and were thankful to be admitted. We are in a new age - the age of the student".
The recent unsuccessful attempt of a former Oxford University graduate, Faiz Siddiqui, to win compensation from the university for its failure to award him a first class degree, offers an interesting insight into possible developments on the horizon. Despite being unsuccessful due to a failure to establish any causal link, Mr Justice Foskett explained; "In the present climate…when students are incurring substantial debts to pursue their university education, the quality of education delivered will undoubtedly come under even greater scrutiny than it did in the past."
However, he had concerns over the logic of such matters being dealt with by the courts. "There may be some rare cases where some claim for compensation for the inadequacy of the tuition provided may succeed, but it is hardly the ideal way of achieving redress. Litigation is costly, time and emotion-consuming and runs the significant risk of failure, particularly in this area where establishing a causative link between the quality of teaching and any alleged 'injury' is fraught with difficulty."
In the Siddiqui case, the claimant unsuccessfully relied on the absence of staff due to sickness and inadequacy of alternative provision. However, it is feasible that a causative link would be much easier to demonstrate where mass strike action by lecturers is taking place.
Not only do universities need to seek a resolution to the ongoing strike action, they (along with other higher and further education institutions) need to adapt the way they operate to recognise students as consumers with associated rights. Jonathan Holden, Head of Education at Forbes Solicitors said "This is new territory for institutions providing fee paying courses, and it is difficult to predict and manage these enhanced student rights". As acknowledged by Mr Justice Foskett, consumer contract law is now a material consideration for university and college management. However, there is little to no clarity from legal precedent to define the rules of the game. It seems that Kings College London is leading the way in acknowledging these potential rights and seeking to protect itself from any future claims. As to whether such refunds are unwarranted or premature - only time will tell.
For more information contact Jonathan Holden in our Education department via email or phone on 01772 220396 / 07976 278888. Alternatively send any question through to Forbes Solicitors via our online Contact Form.