In the recent case of Walker v Innospec Limited and others (ET 2411316/2011) the Employment Tribunal held that a pension scheme's failure to provide survivor's benefits for civil partners equal to those provided for spouses was unlawful discrimination.

The EU Equal Treatment Framework Directive (the "Directive") sets out a framework for equal treatment and non-discrimination in employment law in the EU. The Equality Act 2010 (the "Act"), which implements the Directive in the UK, implies a non-discrimination provision into the rules of occupational pension schemes prohibiting discrimination on grounds of sexual orientation. The Act however permits schemes to limit the payment of equal benefits (in respect of the non-contracted-out part of a member's pension) to benefits for service on or after 5 December 2005 (the date on which the Civil Partnership Act 2004 came into force allowing same sex couples to enter into a civil partnership).

Mr Walker brought a complaint before the Employment Tribunal claiming that his employer, Innospec Limited, had discriminated against him in relation to his pension benefits. In reliance on the exemption contained in the Act, the employer's pension scheme provided that a spouse's pension was payable to a member's civil partner only in respect of pensionable service from 5 December 2005. In Mr Walker's circumstances, this meant that his civil partner would be entitled, on his death, to an annual pension of around £500 compared to the annual sum of around £41,000 which would have been payable to a surviving spouse.

Relying on the ECJ's findings in Maruko and Romer that it is direct discrimination to treat a same sex couple less favourably than a married couple in a comparable situation, the Tribunal held that Mr Walker was entitled to the same survivor's benefits as a married member of the scheme. The exemption contained in the Act was held to be incompatible with the general prohibition on discrimination on the grounds of sexual orientation contained in the Directive.

A large number of pension schemes have made use of the exemption in the Act and provide equal benefits for civil partners only for pensionable service from 5 December 2005. Decisions of the Employment Tribunal are only binding on the parties thereto and so we would not recommend that employers and trustees rush to amend their rules. That said, the ECJ case law appears to support the Employment Tribunal's decision in Walker and with an appeal of that decision to be heard before the Employment Appeals Tribunal, we would expect the exemption contained in the Act to bear further judicial scrutiny in the near future.