Employment Law Cases

Walker v Innospec Ltd

Surviving civil partners and spouses in same-sex marriages must be provided with pension death benefits on the same basis as would apply to a marriage between a man and a woman. In particular, such benefits cannot be limited to the member’s pensionable service completed on or after 5 December 2005.

Legal and factual background

European law (the Framework Directive) established a framework for combating discrimination, including on the basis of sexual orientation. The Civil Partnership Act 2004 came into force in the UK on 5 December 2005 and an exemption, now contained in the Equality Act 2010, allows pensionable service before that date to be disregarded (save for certain contracted-out rights) when calculating the survivor’s pension payable to a civil partner or same-sex spouse.

Mr Walker worked for Innospec Ltd from 1980 until 2003 when he retired. Innospec’ scheme, like many other defined benefit schemes, only takes into account pensionable service from 5 December 2005 when calculating the survivor’s pension payable to a same-sex spouse or civil partner.

Mr Walker entered into a civil partnership with his partner in 2006 and they subsequently married. Mr Walker asked Innospec to confirm that, in the event of his death, his spouse would receive a spouse’s pension based on his full pensionable service. Innospec refused because its scheme utilised the Equality Act exemption.

In Mr Walker’s case, the difference in treatment was marked. If Mr Walker was married to a woman (or indeed if he married a woman in the future), his ‘wife’ would have been entitled on his death to a ‘spouse’s pension’ of about £45,700 pa. In comparison, Mr Walker’s ‘husband’ would have been entitled to a pension of about £1,000 pa. The case has worked its way through the legal system, ending up in the Supreme Court.

Supreme Court’s decision

In short, and without going into the hideously complicated legal arguments, the Supreme Court unanimously allowed Mr Walker’s appeal holding that the UK exemption which allows pensionable before 5 December 2005 to be disregarded must be disapplied as it’s incompatible with EU law. Mr Walker’s husband is entitled on his death to a full spouse’s pension, provided they remain married.

Link to judgment: http://www.bailii.org/uk/cases/UKSC/2017/47.html

Comment

Any pension scheme which limits death benefits for same-sex partners by reference to pensionable service completed on or after 5 December 2005 will need to review their scheme rules and past practice as a matter of urgency. The cost implications are likely to be very significant.

This case was brought by a member who is still alive, so the judgment does not expressly deal with the implications for schemes where a member in a same-sex marriage/civil partnership has already died or give any guidance on this.