Officials in Brussels claim ministers were wrong to blame EU regulations for scrapping the pension rights of 250,000 employees, a decision that would cut billions of pounds from the Scottish budget.
Their ruling increases the prospect of unions and council leaders taking the executive to court in a bid to overturn the decision.
Tom McCabe, the finance minister, has insisted the executive is being forced to end the right of public sector workers to retire on full pensions five years ahead of private sector workers because it breaches a European directive on equality and age discrimination. The announcement prompted Unison, the public sector union, to threaten a ballot of its 10,000 council staff over strike action. Industrial action has also been threatened by the Fire Brigades Union.
However, Katharina von Schnurbein, the EC’s spokeswoman on employment, social affairs and equal opportunities, said the Scottish executive was wrong. She cited Article 6 of the directive, which states that governments can treat people differently on the grounds of age in certain circumstances.
Von Schnurbein added: “It’s an artificial debate [and one that] is only going on in Britain. The directive has no influence on pension value or pension age. It is completely up to the member state. If they think it is reasonable
for people to retire at 60, under EU law that is perfectly legal.”
Critics have accused ministers of trying to use European legislation as a smokescreen to obscure the fact that they want to cut back pension rights on financial grounds.
Under McCabe’s plan the retirement age for council workers would rise to 65, although many other public sector workers, such as teachers, would still be able to retire at 60 because they are on a different scheme.
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The dispute centres on a new European employment law that takes effect
in October, known as directive 2000/78/EC. Senior EC sources confirmed that the directive makes clear that members can choose to continue with existing pension rules.
John Swinney, the Scottish National party shadow finance minister, said: “The government has been caught out for using the EU as a convenient
institution to blame when all it is trying to do is pilfer from the
pension funds.”
Unison also regards the commissioner’s comments as highly significant. “It would seem to bear out what both we and Cosla have been saying. Is this why the Scottish executive has refused to share its legal advice?” said Joe di Paola, Unison’s Scottish organiser.
The executive said its position remained that it had no option but to curtail local authority workers’ pension rights.