Employment Appeal Tribunal confirms that a surviving civil partner’s entitlement to a spouse’s pension can be restricted to service on and after 5 December 2005.

Facts

Mr Walker had been a member of the Innospec Limited company pension scheme since 1980 and had been in a civil partnership since 2006. The company had informed Mr Walker that, on the event of his death, his partner would be entitled to pension benefits dating from 5 December 2005 (the date the Civil Partnership Act 2004 came into force). This amount was just 1% of the benefits that would be paid to his widow if Mr Walker had married a woman. The company justified their position by reference to Paragraph 18 of Schedule 9 to the Equality Act 2010 which states that it will not be discriminatory to treat civil partners differently from married couples for the purposes of pre 5 December 2005 pensionable service. Mr Walker then challenged this proviso and argued that his civil partner should be entitled to a full spouse’s pension.

Judgement of the Employment Tribunal

The Employment Tribunal (ET) upheld Mr Walker’s claim on the basis that the Equality Act proviso was incompatible with the Equal Treatment Directive. The Directive imposes standards of equal treatment in relation to age, race, religion/belief and sexual orientation. It covers both direct and indirect discrimination. In an attempt to bring about compliance with the Directive, the Tribunal read words into the proviso which would entitle a civil partner to receive the same level of survivor benefits as a spouse. 

Judgement of the Employment Appeal Tribunal

Although the Employment Appeal Tribunal (EAT) accepted the Employment Tribunal’s view that both direct and indirect discrimination had occurred, they went on to declare that the Equality Act proviso was lawful so the survivor benefit restriction could be justified.

They held that the proviso did not contravene the Equal Treatment Directive as it did not have retrospective effect. This fundamental principle was stressed by EAT President Mr Justice Langstaff who used the introduction of equal pay between men and women to demonstrate the non-retrospectivity of EU law. Even after employers were required to equalise wages, female employees were unable to issue retrospective claims for the additional pay they would have received if they had been paid the same as their male colleagues from the start of their employment.

Even if the Equality Act had been incompatible with the Directive, the ET would have been exceeding their jurisdiction by reading words into the proviso as doing so contravened the apparent intention of Parliament.

Following the judgement of the EAT, employers and pension scheme trustees can feel confident relying on the Equality Act proviso in terms of restricting survivor benefits to post 5 December 2005 pensionable service.

Future Activity

In accordance with the Marriage (Same Sex Couples) Act 2013, it will be possible to carry out same sex marriages from 29 March 2014. Although there is a caveat in the Marriage Act replicating the same Equality Act proviso in terms of limiting survivor benefits, this caveat was heavily contested during the Act’s parliamentary passage and is currently undergoing government review. Section 16 of the Act requires the Secretary of State to publish a report following this review. The report may suggest amending or removing the survivor benefit restriction.  

Despite the arguably discriminatory nature of the proviso and the apparent disconnect with prevailing standards of equality, these failings may be overlooked for reasons of pragmatism as it is thought that the cost of backdating survivor benefits for civil partners could range from anything between £88 million and £3 billion.