Today’s Supreme Court decision in Walker v Innospec is a decision that will make a huge difference to married or civilly partnered gay and lesbian couples as they get older. It stops pension schemes from paying the surviving spouse of same-sex married or civilly partnered couples much less money as a widow(er)’s pension than they pay out to opposite-sex married couples.
What was the problem?
Mr Walker had started his pension with his employer, Innospec, in 1980. Over the years, he continued to pay into this pension, as did his employer, and it grew to a very healthy value.
When a married person who has a private or occupational pension dies, their opposite-sex spouse will receive a widow(er)’s pension. It won’t be as generous as the pension the pension holder would have received, but it can be very valuable. Mr Walker had an occupational pension through his company, Innospec. If he had died while married to a woman, she would receive a widow’s pension worth about £41,000 per year, an amount based on the value his pension accrued over its whole existence. Even if Mr Walker had been married for one day before keeling over and dying, if he had a wife she would get all of that widow’s pension.
However, Mr Walker is gay. He and his male partner had been together since 1993. For most of this time, Mr Walker could not marry his partner or otherwise leave him the widow(er)’s pension. Gay marriage did not exist, and the law did not offer gay couples the financial protection that married couples have had for centuries.
When civil partnership was introduced, Mr Walker and his partner entered into a civil partnership. This gave them all the rights of a married couple, except for one thing. Pension schemes were allowed to offer the widow(er)s of civil partners a survivors’ pension that only took account of the pension rights introduced since the Civil Partnership Act came into force on 5 December 2005. This was a much smaller amount than if it was based on the value of a pension for its whole existence. In fact, it was around 1% of what a wife would receive. This meant that Mr Walker’s civil partner would get 99% less on Mr Walker’s death than would be the case if Mr Walker had married a woman. So even though Mr Walker had been paying into it for all those years, his civil partner would not get as much of that as if Mr Walker had married a woman. Indeed, a wife of one day would get £45,700 per year and the man he had been with since 1993 would only get £1,000 per year.
Can you legally discriminate like this?
In 2008, a German man called Tadao Maruko brought a case in the Court of Justice of the EU (Maruko v Versorgungsanstalt der Deutschen Bühnen). He was a widower. His registered partner (an equivalent status to marriage for gay couples in Germany) had died, but Mr Maruko was refused a widower’s pension as he was not actually married (Germany introduced gay marriage only last week). Although there is no obligation on the part of EU states to have same-sex marriage or an equivalent status, where they do, an employer cannot treat someone in a legally recognised same-sex relationship less favourably than someone who is in a heterosexual marriage. The Court held that such sexual orientation discrimination was contrary to EU employment law.
Despite this judgment, our legislation mirrors the discrimination Mr Maruko suffered in Germany, and EU court decisions are not retrospective in effect and can’t make something unlawful that was lawful at the time.
The government could change the law but have said that giving same-sex couples the same rights as heterosexual couples would cost pension schemes £3.3 billion so won’t do so.
Mr Walker’s lawsuit
When same-sex marriage was introduced, Mr Walker and his civil partner converted their partnership into a marriage. However, once more the law (paragraph 18 of Schedule 9 to the Equality Act 2010) allows schemes to take into account only the rights accrued since the Civil Partnership Act came into force on 5 December 2005 (even though it is a same-sex marriage not a civil partnership, and this would be the case even if Mr Walker had never had a civil partnership beforehand).
Mr Walker brought a claim of sexual orientation discrimination in the Employment Tribunal and then there were various appeals all the way to the Supreme Court. Innospec argued that it hadn’t discriminated but if they had then the law allowed it to discriminate in the matter of pensions anyway.
The Supreme Court hearing
The Supreme Court held unanimously that paragraph 18 of Schedule 9 to the Equality Act 2010 was incompatible with EU Law and could not be followed. The principle that cases have no retrospective effect meant that past lawful discrimination cannot be retrospectively made unlawful. However, Mr Walker’s pension was a continuing situation not a past one. Now that sexual orientation discrimination is prohibited by EU law, any decision now not to equalise the widow(er)’s pension between same-sex and opposite-sex couples would be illegal discrimination.
The Court therefore made a declaration that Mr Walker’s husband would get the full widower’s pension. You can read the decision or a summary here.
The EU employment law had what is called ‘direct effect’, which means that it applies even if it hasn’t been put into legislation in this country. Not all EU laws can be dealt with in this way.
Mr Walker also claimed that our laws were incompatible with his rights under the Human Rights Act, namely his right to non-discrimination (Art 14) in the application of his right to private and family life (Article 8) and/or Article 1 of the First Protocol of the ECHR, which is about a right to property. The Supreme Court said it did not need to consider this because Mr Walker had won on the EU ground (The European Union is not the same as the European Convention on Human Rights and they both have separate courts: see explanation here).