A pensioner in a same sex marriage has won an appeal against a ruling that his husband would not be entitled to a spouse's pension in the event of his death because his pensionable service predated the introduction of civil partnership or same sex marriage.

Five Justices of the UK Supreme Court today ruled that it was unlawful discrimination to deny spouse's pension rights to John Walker and his husband relating to the occupational pension scheme of Innospec Ltd, and that to the extent that para 18 of sched 9 to the Equality Act 2010 restricted such rights it was incompatible with European law, and had to be disapplied. 

Mr Walker worked for Innospec from 1980 until his retirement in 2003, throughout which time he paid into the pension scheme. From 1993 he lived with his male partner; they entered into a civil partnership in January 2006 and had since married. In 2006 he asked Innospec to confirm that, in the event of his death, they would pay the spouse’s pension, which the scheme provided for, to his civil partner. Innospec refused, because his service predated 5 December 2005, the date that civil partnerships were introduced in the UK, and any discriminatory treatment was therefore permitted under para 18.

If Mr Walker was married to a woman (or married a woman in the future) she would be entitled on his death to a “spouse’s pension” of about £45,700 per annum, but as things stood, Mr Walker’s husband would only be entitled to the statutory guaranteed minimum of about £1,000 per annum.

Mr Walker’s claim for discrimination was upheld by the employment tribunal, but Innospec’s appeal to the Employment Appeal Tribunal was allowed, a decision affirmed by the Court of Appeal. 

The Supreme Court unanimously allowed Mr Walker’s appeal, two Justices choosing narrower grounds to the majority.

Lord Kerr, with whom Lady Hale and Lord Reed agreed, said the essential question in the appeal was whether para 18 of sched 9 was incompatible with the EU Framework Directive 2008/78/EC, which established a general framework for equal treatment in employment and occupation.

Although EU law did not impose any requirement on member states to recognise same-sex partnerships, the EU Court of Justice had held that if a status equivalent to marriage was available under national law, it was directly discriminatory contrary to the Framework Directive for an employer to treat a same-sex partner in such a partnership less favourably than an opposite-sex spouse.

"Permanently fixed"?

The general rule under EU law, as in most modern legal systems, was that legislative changes applied prospectively. The CJEU had developed principles drawing a distinction between the retroactive application of legislation to past situations (which was prohibited unless expressly provided for), and its immediate application to continuing situations (which was generally permitted). The relevant question is whether the legal situation had become “permanently fixed”.

The principle was not easy to apply in the case of pension rights, but the Court of Appeal had wrongly concluded that entitlement to a survivor’s pension was “permanently fixed” at the date of retirement. The court was influenced in this view by the line of the CJEU’s case law following the Barber judgment on equal pay for men and women, but how the CJEU exceptionally applied a temporal limitation to one of its rulings had no inevitable bearing on the temporal application of legislation as a matter of principle.

In any event, the recent CJEU decisions in Case C-267/06 Maruko and Case C-147/08 Römer put it beyond doubt that, unless evidence established that there would be unacceptable economic or social consequences of giving effect to Mr Walker’s entitlement to a survivor’s pension for his husband, at the time that this pension would fall due, there was no reason why he should be subjected to unequal treatment as to the payment of that pension. On that account, para 18, in so far as it authorised a restriction of payment of benefits based on periods of service before 5 December 2005, was incompatible with the Framework Directive and had to be disapplied.

"The salary paid to Mr Walker throughout his working life was precisely the same as that which would have been paid to a heterosexual man", Lord Kerr said. "There was no reason for the company to anticipate that it would not become liable to pay a survivor’s pension to his lawful spouse. The date when that pension will come due, provided Mr Walker and his partner remain married and his partner does not predecease Mr Walker, is the time at which denial of a pension would amount to discrimination on the ground of sexual orientation."

Lord Carnwath and Lord Hughes held that the appeal should be allowed on the more limited basis that the question of who qualified as Mr Walker's spouse fell to be determined after the Directive had come into force. The broader question of whether the Barber line of case law was relevant should determined by the CJEU in a separate case, O’Brien v Ministry of Justice, in which in its judgment also given today, the court had decided to refer to the CJEU a question relating to the pension entitlement of part-time workers.

In the result the court made a declaration that (i) para 18 of sched 9 to the Equality Act 2010 was incompatible with EU law and had to be disapplied; and (ii) Mr Walker’s husband was entitled on his death to a spouse’s pension, provided they remained married. 

Click here to access the judgments.