UK Supreme Court finds exclusion of same-sex partner from benefits paid into private pension fund discriminatory

The UK Supreme Court has unanimously decided that an exemption in the 2010 Equality Act, which allowed employers to exclude same-sex partners from spousal benefits paid into pension funds before December 2005, discriminatory and in breach of EU equality law.

The appellant, Mr John Walker, had worked for specialist chemical company Innocpec Ltd for 23 years. In 2006 Mr Walker asked Innospec to confirm that, in the event of his death, they would pay a spouse’s pension, which the scheme provides for, to his civil partner. They refused, however, because his service predated 5 December 2005, the date that civil partnerships were introduced in the UK, and discriminatory treatment was therefore permitted under paragraph 18 of Schedule 9 to the Equality Act 2010. This provided that it is lawful to discriminate against an employee who is in a civil partnership or same-sex marriage by preventing access to a benefit, facility or service the right to which was accrued before 5 December. Had Mr Walker been married to a woman (or if he married a woman in the future) she would have been entitled to a “spouse’s pension” of about £45,700 per year in the event of his death.

Mr. Walker brought a complaint to the Employment Tribunal who found Innospec’s actions under paragraph 18 constituted direct and indirect discrimination contrary to EU Directive 2000/78/EC (the Framework Directive) which requires member states to prohibit discrimination in the field of employment and occupation on various grounds including sexual orientation. However, Innospec’s appeal to the Employment Appeals Tribunal was allowed on the grounds that the EU directive did not retrospectively apply to Mr. Walker’s case, a view which was upheld by the Court of Appeal.

The Supreme Court unanimously allowed Mr Walker’s appeal, however, and made declarations stating that (i) paragraph 18 of Schedule 9 to the Equality Act 2010 is incompatible with EU law and must be disapplied and (ii) Mr Walker’s husband is entitled on his death to a spouse’s pension, provided they remain married.

In his lead judgment, Lord Kerr set out that the Court of Appeal had wrongly applied the “no retroactivity” principle of EU legislation by interpreting Mr. Walker’s situation as one which was “permanently fixed” in advance of the implementation of the Framework Directive. The court was also found to be wrong in its application of the principles set out in Barber v Guardian Royal Exchange Assurance Group by the Court of Justice of the European Union (CJEU) which, according to Lord Kerr, should be seen to apply temporal limits to the application of CJEU rulings and not EU legislation. In contrast, the Supreme Court interpreted Mr. Walker’s situation to be a continuous one and relied upon the authorities set out in the Grand Chamber of the CJEU in Maruko v Versorgungsanstalt der Deutschen Bühnen and Römer v Freie und Hansestadt Hamburg which concern the equal treatment rights of same-sex partners to survivor’s pensions.

The Court held that Mr Walker’s husband, provided he does not predecease him, and that they remain married at the time of Mr Walker’s death, is entitled under the Framework Directive to a spouse’s pension calculated on the basis of all the years of Mr Walker’s service with Innospec.  Non-discrimination on grounds of sexual orientation is now a principle of EU law. It follows that any contemporary denial to his husband of a spouse’s pension, calculated on all the years of Mr Walker’s service, would be incompatible with the Framework Directive.

Mr Walker and his legal team stated after the judgement “this ruling was made under EU law and is a direct consequence of the rights protection the EU gives us. We now risk losing that protection. The Government must promise that there will be no rollback on LGBT rights after Brexit – and commit to fully protecting them in UK law.” Their full statement can be found here.

The judgment referred to Parris v Trinity College Dublin where the CJEU held that TCD’s refusal to provide the survivor’s pension to Dr Parris’ civil partner, by reference to that rule, did not constitute indirect discrimination on sexual orientation grounds, direct age discrimination, and/or discrimination on a combination of those grounds. However, it is anticipated that the Social Welfare Pensions and Civil registration Bill 2017 will be amended to apply equal pension entitlement to someone in Dr Parris position.

Click here for the judgment in Walker v Innospec Limited and others.

Click here for the Bulletin article on Parris v Trinity College Dublin.

 

                                                                                                                            

 

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