In Innospec v Walker the Employment Tribunal (ET) has held that the provision in the Equality Act 2010 restricting the requirement to backdate pension rights for surviving civil partners to service since 5 December 2005 is in breach of the EU Equal Treatment Directive.
The facts of the case are fairly straightforward. Mr W was employed by Innospec from 1980 until his retirement in 2003. He entered a civil partnership in January 2006. On his death, his partner will be entitled to a pension of about £500 per annum (being a survivor’s GMP) whereas, if they were married, the scheme rules would provide a pension of over £40,000 per annum.
The ET (applying the EU cases of Maruko and Romer) found that the restriction in the Equality Act is in breach of the Equal Treatment Directive. The failure to provide a survivor’s pension equivalent to that which would be provided to a widow (i.e. for the full period of Mr W’s pensionable service) was both directly and indirectly discriminatory on the grounds of sexual orientation.
The ET concluded that it was required to interpret the Equality Act to remove the restriction when applied to those in civil partnerships (as compared to those who are married) – “to interpret the contested provision so as to make it compatible with the Directive would not go against the grain of the legislation because the fundamental feature of the Equality Act 2010 is the prohibition of discrimination”.
As an ET decision, this is binding only between the parties and has no general application – however, now this first case has been successfully brought, it seems likely that further cases/appeals will follow. In the meantime schemes can continue to apply the 5 December 2005 restriction, but they should be aware of the risk that a successful Pensions Ombudsman or ET claim might be brought.