Can Secondary Employment Be Counted Towards Special Pension Service?
Can part-time secondary employment be counted towards special service for pension purposes?
Ukrainian legislation has historically provided special pension rules for certain professions, including the possibility of receiving a pension for years of service or retiring under preferential conditions. One category covered by such rules includes certain education professionals.
However, establishing entitlement to such a pension can be complicated, particularly where the Pension Fund refuses to count individual periods of employment towards the required special service. One issue that has arisen in court practice is whether secondary employment performed concurrently with a person’s main job can be included in the special service required for a pension for years of service.
An important legal position on this issue was considered by the Supreme Court in its judgment of 27 August 2020 in Case No. 398/3150/16-а (2-а/398/168/16).
What were the circumstances of the case?
The claimant applied to the Pension Fund of Ukraine for a pension for years of service but received a refusal.
According to the Pension Fund, the claimant had accumulated only 6 years, 2 months and 20 days of special service as an education professional, while the legislation applicable to the dispute required at least 26 years of such service.
The claimant disagreed with the decision and brought proceedings seeking to have the refusal declared unlawful and to require the Pension Fund to calculate and grant the pension for years of service.
After examining the evidence, the court of first instance dismissed the claim.
The court established that an error had been made in calculating the claimant’s special service. However, even after correcting that error, it concluded that the claimant had accumulated 25 years and 10 months of qualifying special service, which was still less than the 26 years required under the legislation applicable at that time.
Importantly, the court refused to count more than one year during which the claimant had worked concurrently in a secondary position towards the required special service.
The appellate court reached the same conclusion.
The claimant then lodged a cassation appeal with the Supreme Court, arguing that the lower courts had incorrectly applied paragraph “e” of Article 55 of Law of Ukraine No. 1788-XII.
According to the claimant, if the disputed period of secondary employment were properly included, the total special service would exceed 26 years, thereby satisfying the requirement for a pension for years of service.
What did the Supreme Court decide?
The Supreme Court agreed that the lower courts had not properly examined the issue and partially upheld the cassation appeal.
In its reasoning, the Supreme Court referred to its earlier judgment of 30 January 2019 in Case No. 876/5312/17.
According to the legal approach applied in that case, secondary employment at a music school may be counted towards special service for the purposes of paragraph “e” of Article 55 of Law No. 1788-XII, provided that the relevant statutory conditions are satisfied.
In particular, for such secondary employment to be counted towards special service, the teaching workload had to amount to at least 180 hours per year, and remuneration had to be at least 0.25 of the relevant official salary rate.
Therefore, the mere fact that the work was performed as secondary employment rather than as the employee’s main job was not, by itself, sufficient grounds for excluding that period from the special service.
The courts were required to establish whether the claimant satisfied the relevant conditions concerning teaching hours and remuneration.
The Supreme Court found that the lower courts had failed to properly investigate these circumstances. This prevented them from correctly determining the claimant’s total special service and, consequently, his entitlement to a pension for years of service.
The Supreme Court therefore concluded that the procedural and substantive errors made by the lower courts prevented the relevant factual circumstances from being properly established.
As a result, the Supreme Court partially upheld the cassation appeal, set aside the judgments of the lower courts and remitted the case to the court of first instance for a new hearing.
What is the practical significance of this judgment?
The case demonstrates that secondary employment may, in certain circumstances, be counted towards the special service required for a pension for years of service. The fact that a person performed the relevant work concurrently with their principal employment does not automatically exclude that period.
For education professionals, it may be necessary to examine the number of teaching hours performed during the relevant period, the amount of remuneration received, the position held and the legislation applicable at that time.
Therefore, if the Pension Fund refuses to count a period of secondary employment towards special service solely because the work was not the person’s principal employment, such a refusal should be carefully reviewed and, where appropriate, may be challenged before an administrative court.
Please note: this judgment concerned the legislation governing pensions for years of service applicable to the periods and circumstances examined in the case. The pension legislation for education professionals has changed over time, so current entitlement should be assessed according to the legislation applicable to the relevant employment periods and the date on which the pension right arose.
