A recent tribunal decision has cast doubt on the lawfulness of the way some pension schemes deal with death benefits for registered civil partners of deceased scheme members.
The concept of civil partnership for same-sex partners was introduced on 5 December 2005. Since then it has been a feature of discrimination legislation that the same employment related benefits must be provided to civil partners as are provided to married couples. However, a specific exemption was created (now set out in paragraph 18(1) of Schedule 9 to the Equality Act 2010) that ostensibly allows an employer’s pension scheme to limit the extent of death benefits available to a member’s civil partner by excluding the member’s employment before 5 December 2005 when calculating entitlement (except in relation to accrued contracted-out benefits).
The exemption was challenged in the case of Walker v Innospec Ltd and others. The Claimant, Mr Walker, worked for Innospec between 1980 and 2003 and is a member of its occupational pension scheme. He entered into a civil partnership in 2006. Innospec’s pension scheme provides a pension to the spouses of deceased members. However, in line with the exemption, the scheme provides death benefits to civil partners of deceased members only in respect of benefits accrued after 5 December 2005.
The Tribunal’s decision
A Tribunal accepted Mr Walker’s argument that the exemption contravenes the EU Framework Directive on Equal Treatment in Employment, which prohibits discrimination in the workplace on grounds of sexual orientation. The Tribunal went on to rule that the exemption must be interpreted in a way that is compatible with the Directive and that, therefore, it could not be relied on to limit the death benefits available to Mr Walker’s civil partner.
Not all pension schemes limit survivors’ benefits for civil partners to pensionable service accrued after 5 December 2005. For those that do, the Tribunal decision itself does not stand as a definitive statement of the law. The decision has been appealed to the Employment Appeal Tribunal and it will be some time before the outcome of the case is known. In the meantime, a different Tribunal faced with a similar case would be free to reach a different conclusion.
Walker v Innospec Ltd and others, Employment Tribunal, 13 November 2012