Trinity Term [2017] UKSC 47 On appeal from: [2015] EWCA Civ 1000

JUDGMENT
Walker (Appellant) v Innospec Limited and others
(Respondents)
before
Lady Hale, Deputy President
Lord Kerr
Lord Reed
Lord Carnwath
Lord Hughes
JUDGMENT GIVEN ON
12 July 2017
Heard on 8 and 9 March 2017
Appellant Respondent
Martin Chamberlain QC Nicholas Randall QC
Max Schaefer Claire Darwin
(Instructed by Liberty
) (Instructed by Eversheds
Sutherland (International)
LLP (Manchester)
)
Interested Party (Secretary
of State for Work and
Pensions)
Jason Coppel QC
Holly Stout
(Instructed by The
Government Legal
Department
)
Page 2
LORD KERR: (with whom Lady Hale and Lord Reed agree)
1. John Walker, the appellant in these proceedings, started to work for Innospec
Ltd on 2 January 1980. From the beginning of his employment, he was required to
become a member of the firm’s contributory pension scheme. He continued to pay
into the scheme throughout the time that he was employed by Innospec. His
employment continued until Mr Walker accepted early retirement on 31 March
2003. He would have reached normal retirement age, as prescribed by the pension
scheme, in 2007.
2. Under the terms on which Mr Walker could take early retirement, he was able
to maximise his pension to the level that it would have reached if he had retired in
2007. The concessions made by his employer which allowed him to do so were not
made in exchange for any waiver by him of his future pension rights.
3. Mr Walker is gay. He has lived with his male partner since 1993. They
applied for a civil partnership on 5 December 2005 (the same day the Civil
Partnership Act 2004 came into force) and their civil partnership was registered on
23 January 2006. They are now married.
4. Shortly after the civil partnership was registered, Mr Walker asked Innospec
to confirm that, in the event of his death, they would pay the spouse’s pension, which
the scheme provides for, to his civil partner. They refused, because his service
predated 5 December 2005. The basis of the refusal (which was confirmed after Mr
Walker and his partner married) is paragraph 18 of Schedule 9 to the Equality Act
2010. This provision must be considered in greater detail later in this judgment but,
in broad outline, it provides an exception to the general non-discrimination rule
implied into occupational pension schemes. Under this exception, it is lawful to
prevent or restrict access to a benefit, facility or service to a person (a) where the
right to that benefit etc accrued before 5 December 2005, or (b) which is payable in
respect of periods of service before that date.
5. If Mr Walker was married to a woman, or, indeed, if he married a woman in
the future, she would be entitled on his death to the pension provided by the scheme
to a surviving spouse. When the claim was issued, the value of that “spouse’s
pension” was about £45,700 per annum. As things stand at present, Mr Walker’s
husband will be entitled to a pension of about £1,000 per annum (the statutory
guaranteed minimum).
Page 3
The proceedings
6. In November 2011, Mr Walker lodged a claim in the Employment Tribunal
(ET) against his employers, alleging that they had discriminated against him on the
ground of his sexual orientation. On 13 November 2012, the ET unanimously
decided that there had been both direct and indirect discrimination on that ground.
It had been argued on behalf of the respondents that there had not been direct
discrimination and that, although the operation of the pension scheme amounted to
indirect discrimination, this was justified. Both arguments were rejected by the ET.
The discrimination was direct, the ET said, in that it involved unequal treatment of
straightforwardly comparable individuals viz heterosexual married couples and
same sex couples who had entered a lifetime commitment to each other. It was
likewise indirect discrimination because an unwarranted requirement had been
imposed in respect of the couple of the same gender. The proffered justification by
the respondents (that it was necessary to have the restriction in place in order to
ensure proper funding of the scheme) was found by the ET to be unsupported by
sufficiently cogent evidence.
7. The ET concluded that paragraph 18 could and should be read in a manner
which would render it compliant with Council Directive 2000/78/EC of 27
November 2000 [2000] OJ L 303/16 (the Framework Directive). This establishes a
general framework for equal treatment in employment and occupation. It therefore
upheld Mr Walker’s claim on liability and fixed a date for a remedies hearing.
8. Innospec appealed. Its arguments on direct and indirect discrimination failed.
The Employment Appeal Tribunal (EAT) rejected the argument that because, as a
matter of status, a spouse is entitled to a pension or survivor’s benefit without the
restriction which paragraph 18 places upon a civil partner, they were not
comparable: [2014] ICR 645. The EAT’s dismissal of the argument drew on section
23(3) of the Equality Act 2010 which provides that if the protected characteristic is
sexual orientation, the fact that one person “is a civil partner while another is married
is not a material difference between the circumstances relating to each case” and on
the statement of Lady Hale in Bull v Hall [2013] UKSC 73; [2013] 1 WLR 3741,
para 29, to the effect that the “criterion of marriage or civil partnership [should be
regarded] as indissociable from the sexual orientation of those who qualify to enter
it”. On the question of indirect discrimination, the EAT held that the ET was entitled
to conclude that Innospec had failed to produce any cogent evidence on the issue of
justification but had merely relied on generalised assertions. It had thus failed to
show that the indirect discrimination was proportionate.
9. The EAT allowed Innospec’s appeal, however. It held that the Framework
Directive did not have retrospective effect to render unlawful inequalities based on
sexual orientation that arose before the last date for its transposition. After that date
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the Directive provided a basis for ensuring equal treatment between those with
different sexual orientation but not before. Paragraph 18 was therefore not
incompatible with the Directive.
10. The EAT further held that if, contrary to its view, paragraph 18 was, on its
face, incompatible with the Directive, it was not open to it to interpret that provision
in a way that rendered it compatible. The plain purpose of the paragraph was to
create an exception. To nullify that exception would run directly contrary to the
“grain” of the legislation (Ghaidan v Godin-Mendoza [2004] 2 AC 557). It was also
held that paragraph 18 could not be disapplied. In reaching that conclusion, the EAT
referred to the judgment of Lord Mance in R (Chester) v Secretary of State for
Justice [2013] UKSC 63; [2014] AC 271, at paras 61-62 where he said:
“The Court of Justice has accepted that, although the Treaty
contemplates that the general principle of non-discrimination
underlying article 13 EC will be implemented by Directives,
member states will be bound thereby to discontinue, disregard
or set aside measures so far as they involve discrimination on a
basis contrary to article 13 at least after the time for
transposition of such a Directive: Kücükdeveci v Swedex GmbH
and Co KG (Case C-555/07) [2010] All ER (EC) 867, Römer v
Freie und Hansestadt Hamburg (Case C-147/08) [2011] ECR
I-3591, para 61 … however, for the general principle of nondiscrimination to apply, the context must fall within the scope
of Community or now Union law …”
The EAT considered that Mr Walker’s claim, in so far as it related to an asserted
entitlement to spousal pension, could not be brought within the scope of European
Union (EU) law in respect of the period prior to the time limit for transposing the
Framework Directive.
11. Mr Walker appealed the EAT’s decision. In the Court of Appeal the Secretary
of State argued that the EAT was wrong in its conclusion on direct discrimination.
In effect, he repeated the argument advanced by Innospec to the EAT that civil
partners and married persons are not “in a comparable position” in respect of pension
rights because paragraph 18 itself created a difference in status between the two
groups. That argument was rejected, Lewison and Underhill LJJ finding that civil
partnership and marriage were indeed comparable situations in the UK and Lord
Dyson MR agreeing with both: [2016] ICR 182.
12. The Court of Appeal nevertheless dismissed Mr Walker’s appeal. At the
outset, Lewison LJ identified what he described as two relevant principles of EU
Page 5
law. These were said to be the “no retroactivity” principle and the “future effects”
principle. Lewison LJ described the first of these principles as prescribing that “EU
legislation does not have retroactive effect unless, exceptionally, it is clear from its
terms or general scheme that the legislator intended such an effect, that the purpose
to be achieved so requires and that the legitimate expectations of those concerned
are duly respected” – para 5 of his judgment. Because the Court of Appeal found that
to require payment of a spouse’s pension to Mr Walker’s husband, after Mr Walker’s
death, would be to give the Framework Directive retrospective effect, it concluded
that the no retroactivity principle precluded this. The second principle was said to
be that amending legislation applies immediately to the future effects of a situation
which arose under the law as it stood before amendment, unless there was a specific
provision to the contrary – again para 5.
13. The application of those principles by the Court of Appeal is central to their
decision. They underpin critically their conclusion that the Framework Directive’s
prohibition of discrimination on grounds of sexual orientation applies only to
pension payable in the future in respect of service and/or contributions paid prior to
2 December 2003, the deadline for its transposition. In turn that conclusion depends
vitally on the Court of Appeal’s analysis of the EU cases which, it says, articulate
the no retroactivity and future effects principles.
The issues in broad outline
14. The appellant identified three principal issues. The first is whether the
differential treatment provided for by paragraph 18 of Schedule 9 is compatible with
the Framework Directive.
15. The second issue is whether, if the differential treatment is not compatible
with the Framework Directive, the appellant’s claim must nonetheless fail because
paragraph 18 must be given effect, or whether, as the appellant contends, the
paragraph must be disapplied because of its inescapable conflict with the Directive.
16. The final issue raised by the appellant is whether a declaration of
incompatibility under section 4 of the Human Rights Act 1998 should be made by
this court, declaring that paragraph 18 is incompatible with article 14, read with
article 8 and/or article 1 of the First Protocol of the European Convention on Human
Rights and Fundamental Freedoms (ECHR).
Page 6
Some general considerations
17. Until the beginning of this century there was no legal prohibition on
discrimination on the grounds of sexual orientation at work. Since then, the legal
status of gay and lesbian employees has been transformed, mainly because of two
developments. The first was the introduction of equal treatment legislation by the
European Union. The Framework Directive’s prohibition of discrimination in the
field of employment and occupation extended to unequal treatment on the ground of
sexual orientation. The deadline for transposing the Directive into domestic law was
2 December 2003 and the UK did this initially by way of regulations (the
Employment Equality (Sexual Orientation) Regulations 2003) (SI 2003/1661)) and
subsequently in primary legislation now incorporated into the Equality Act 2010.
Part 5 of that Act prohibits direct and indirect discrimination on grounds of sexual
orientation in the context of employment.
18. The second development is domestic in origin. Parliament has legislated to
recognise same-sex unions, first by introducing civil partnerships equivalent to
marriage (the Civil Partnership Act 2004) and subsequently by legalising same-sex
marriage itself (the Marriage (Same Sex Couples) Act 2013). The recognition of
same-sex partnerships, which is not required by EU law, was motivated by an
appreciation that formal equality for same-sex couples will always be deficient if
they are unable to avail themselves of the legal benefits attendant on marriage. In
her foreword to the consultation paper preceding the introduction of the Civil
Partnership Act 2004, Jacqui Smith, the Minister of State for Industry and the
Regions and Deputy Minister for Women and Equality, noted:
“Many [same-sex couples] have been refused a hospital visit to
see their seriously ill partner, or have been refused their rightful
place at their partner’s funeral. Others find themselves unable
to access employment benefits reserved only for married
partners. Couples who have supported each other financially
throughout their working lives often have no way of gaining
pension rights. Grieving partners can find themselves unable to
stay in their shared home or to inherit the possessions they have
shared for years when one partner dies suddenly without
leaving a will. In so many areas, as far as the law is concerned,
same-sex relationships simply do not exist. That is not
acceptable.”
19. Although EU law does not impose any requirement on member states to
recognise same-sex partnerships, the European Court of Justice has held that if a
status equivalent to marriage is available under national law, it is directly
discriminatory contrary to the Framework Directive for an employer to treat a same-
Page 7
sex partner who is in such a partnership less favourably than an opposite-sex spouse
(Maruko v Versorgungsanstalt der Deutschen Bühnen (Case C-267/06) [2008] 2
CMLR 32). Thus in the UK it is unlawful as a matter of both EU and domestic law
for an employer to deny a same-sex civil partner or spouse of an employee a benefit
that would be provided to a spouse of the opposite sex.
20. That is not an end of the matter, however. When it introduced civil
partnerships, Parliament also decided to include an exception to the prohibition on
discrimination in the context of employment. That is now contained in paragraph 18
of Schedule 9 of the Equality Act 2010, which provides in its current form:
“(1) A person does not contravene this Part of this Act, so far
as relating to sexual orientation, by doing anything which
prevents or restricts a person who is not [within sub-paragraph
(1A)] from having access to a benefit, facility or service –
(a) the right to which accrued before 5 December
2005 (the day on which section 1 of the Civil
Partnership Act 2004 came into force), or
(b) which is payable in respect of periods of service
before that date.”
21. Mr Walker does not come within section 1A. (It concerns either (a) a man
who is married to a woman, or (b) a woman who is married to a man, or (c) someone
married to a person of the same sex in a relevant gender change case.) If the effect
of the Framework Directive is to prohibit discrimination on the ground of sexual
orientation with regard to the payment of pensions in respect of periods of service
before 5 December 2005, paragraph 18 is plainly incompatible with it. The essential
question, therefore, is whether that is the effect of the Directive.
The rule against retroactive legislation
22. The general rule, applicable in most modern legal systems, is that legislative
changes apply prospectively. Under English law, for example, unless a contrary
intention appears, an enactment is presumed not to be intended to have retrospective
effect. The logic behind this principle is explained in Bennion on Statutory
Interpretation, 6th ed (2013), Comment on Code section 97:
Page 8
“If we do something today, we feel that the law applying to it
should be the law in force today, not tomorrow’s backward
adjustment of it. Such, we believe, is the nature of law. ‘…
those who have arranged their affairs … in reliance on a
decision which has stood for many years should not find that
their plans have been retrospectively upset’.”
23. EU law is no different in this respect. As the Court of Appeal observed, the
Court of Justice of the European Union (CJEU) has developed two principles to
establish the temporal application of EU legislation – the “no retroactivity” principle
and the “future effects” principle. These were described by the CJEU in Land
Nordrhein-Westfalen v Pokrzeptowicz-Meyer (Case C-162/00) [2002] 2 CMLR 1,
paras 49-50 as follows:
“According to settled case law, in order to ensure observance
of the principles of legal certainty and the protection of
legitimate expectations, the substantive rules of Community
law must be interpreted as applying to situations existing before
their entry into force only in so far as it clearly follows from
their terms, their objectives or their general scheme that such
effect must be given to them (see, in particular, Bout (Case C21/81) [1982] ECR 381, para 13, and GruSa Fleisch (Case C34/92) [1993] ECR I-4147, para 22).
It also follows from settled case law that new rules apply
immediately to the future effects of a situation which arose
under the old rules (see, among other cases, Licata v Economic
and Social Committee (Case C-270/84) [1986] ECR 2305, para
31). In application of that principle the Court has held, in
particular, that since the Act concerning the conditions of
accession of the Republic of Austria, the Republic of Finland
and the Kingdom of Sweden and the adjustments to the Treaties
on which the European Union is founded (OJ 1994 C 241, p 21,
and OJ 1995 L 1, p 1) contains no specific conditions
whatsoever with regard to the application of article 6 of the EC
Treaty (now, after amendment, article 12 EC), that provision
must be regarded as being immediately applicable and binding
on the Republic of Austria from the date of its accession, with
the result that it applies to the future effects of situations arising
prior to that new member state’s accession to the Communities
(Case C-122/96) Saldanha and MTS [1997] ECR I-5325, para
14).”
Page 9
24. The policy behind the no retroactivity principle is thus similar to that
described in Bennion – the need to ensure “legal certainty” and to protect the
“legitimate expectations” of those who have relied on the law as it previously stood.
The future effects principle is simply the other side of the same coin. It is a method
developed by the CJEU to avoid any retrospective effect and to ensure the immediate
prospective application of legislation to ongoing legal relationships. The principle
is necessary because it is not always easy to identify the point at which a right
accrues. Employment provides a paradigm example. How should a new EU
provision be applied to an ongoing employment relationship that had begun before
the provision came into force? In Land Nordrhein-Westfalen, the CJEU answered
that question by holding that “the application of a new rule … from the date of its
entry into force, to a contract of employment concluded prior to its entry into force,
cannot be regarded as affecting a situation arising prior to that date (para 52).” As
Advocate General Jacobs explained at para 59 of his Opinion:
“Applying a legal provision to a fixed-term employment
contract which has not finally ended by the time that provision
enters into force does not involve the retroactive application of
the law; it entails only the immediate application of that
provision to the effects in the future of situations which have
arisen under the law as it stood before amendment.”
25. The CJEU draws a distinction, therefore, between the retroactive application
of legislation to past situations (which is prohibited unless expressly provided for)
and its immediate application to continuing situations (which is generally
permitted). The distinction was elucidated by Advocate General Cosmos in
Andersson v Svenska Staten (Case C-321/97) [2000] 2 CMLR 191, para 57:
“Retroactive effect consists in the application of the rule to
situations which were permanently fixed before that rule came
into force. Immediate effect, which, in principle, works
likewise according to the principle tempus regit actum, consists
in applying the rule to situations which are continuing.”
26. The application of these principles presents a challenge when one is dealing
with entitlement to an occupational retirement pension. Conventionally, the right to
a pension accumulates over decades. During the time that the right is accruing,
actuarial assumptions are made based on existing legal conditions, notwithstanding
that the pension is payable in the future. Those assumptions are upset when, because
of changes in social values, a new equal treatment provision is introduced. It is not
immediately easy to identify the point at which entitlement to a pension becomes
“permanently fixed” – whether for example at the date of retirement or when the
pension is paid.
Page 10
The Directive
27. So far as are material to the circumstances of this case, the relevant passages
from Recitals 11 and 12 of the Framework Directive are these:
“(11) Discrimination based on religion or belief, disability,
age or sexual orientation may undermine the achievement of
the objectives of the EC Treaty, in particular the attainment of
a high level of employment and social protection, raising the
standard of living and the quality of life, economic and social
cohesion and solidarity, and the free movement of persons.
(12) To this end, any direct or indirect discrimination based
on religion or belief, disability, age or sexual orientation as
regards the areas covered by this Directive should be prohibited
throughout the Community. …”
Article 1 provides that “The purpose of this Directive is to lay down a general
framework for combating discrimination on the grounds of religion or belief,
disability, age or sexual orientation as regards employment and occupation, with a
view to putting into effect in the member states, the principle of equal treatment”.
Article 2 provides:
“1. For the purposes of this Directive, the ‘principle of equal
treatment’ shall mean that there shall be no direct or indirect
discrimination whatsoever on any of the grounds referred to in
article 1.
2. For the purposes of paragraph 1:
(a) direct discrimination shall be taken to occur
where one person is treated less favourably than another
is, has been or would be treated in a comparable
situation, on any of the grounds referred to in article 1;
(b) indirect discrimination shall be taken to occur
where an apparently neutral provision, criterion or
practice would put persons having a particular … sexual
orientation at a particular disadvantage compared with
other persons unless:
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(i) that provision, criterion or practice is
objectively justified by a legitimate aim and the
means of achieving that aim are appropriate and
necessary …”
The appellant’s arguments
28. For the appellant, Mr Martin Chamberlain QC submits that the Court of
Appeal has fundamentally misconstrued the nature of the issues involved in the
jurisprudence of the CJEU. Mr Chamberlain argues that the line of cases on which
the Court of Appeal relied are all concerned with temporal limitations imposed on
claims for equal pay for men and women, not for claims for equal treatment in
relation to pension entitlement for heterosexual and gay men and women. Moreover,
that limitation was, he says, introduced as an exceptional measure to deal with the
consequence of the abrupt, financially catastrophic impact that retrospective
entitlement to equality of pay would have had on the economies of many member
states of the EU.
The cases considered by the Court of Appeal
29. In Defrenne v Sabena (Case 43/75) [1976] ECR 455; [1981] 1 All ER 122
(Defrenne II) the court held that article 119 had direct effect and could be relied on
from the date by which it had required member states to implement the principle of
equal pay (1 January 1962). The court recognised, however, that this would have
far-reaching economic consequences. In light of these and the anticipated impact of
large numbers of backdated claims, the court exceptionally limited the effect in time
of its judgment, so that the direct effect of article 119 could not be relied on to
support claims for pay periods before the judgment date (except those that had
already been launched by that date). That this was a pragmatic decision, inspired by
the combination of unusual circumstances surrounding the application of article 119,
is clear from the final part of the judgment. In para 70 it referred to the fact that
many undertakings could not have foreseen that they might become liable for claims
from the date that member states were required to implement the principle of equal
pay and that many might be driven to bankruptcy in consequence. Then at paras 72-
74, the court said this:
“72. However, in the light of the conduct of several of the
member states and the views adopted by the Commission and
repeatedly brought to the notice of the circles concerned, it is
appropriate to take exceptionally into account the fact that, over
a prolonged period, the parties concerned have been led to
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continue with practices which were contrary to article 119,
although not yet prohibited under their national law.
73. The fact that, in spite of the warnings given, the
Commission did not initiate proceedings under article 169
against the member states concerned on grounds of failure to
fulfil an obligation was likely to consolidate the incorrect
impression as to the effects of article 119.
74. In these circumstances, it is appropriate to determine
that, as the general level at which pay would have been fixed
cannot be known, important considerations of legal certainty
affecting all the interests involved, both public and private,
make it impossible in principle to reopen the question as
regards the past.”
30. It is clear from these passages that the CJEU was not propounding a general
rule relating to the retrospective application of legislation. Rather, it was expressing
an exception to the general rule that judicial decisions will generally have
retrospective application. The statement in para 5 of Lewison LJ’s judgment (see
para 12 above) that “EU legislation does not have retroactive effect unless,
exceptionally, it is clear from its terms or general scheme that the legislator intended
such an effect,” though no doubt correct, is not supported in any way by Defrenne
II. Moreover, the statement that the legitimate expectations of those concerned are
required to be “duly respected” must also be approached with some caution in the
context of judicial decisions, which are generally retroactive. In Defrenne II, it was
the combination of the expectations of undertakings (fuelled as they were by the
inaction of the Commission) and the circumstance that considerable financial
hardship might accrue which led the court to take the exceptional course which it
did.
31. Bilka-Kaufhaus GmbH v Weber von Hartz (Case C-170/84) [1986] ECR
1607; [1986] 2 CMLR 701 determined that benefits under an occupational pension
scheme amounted to “pay” within the meaning of article 119, being “consideration
received by the worker from the employer in respect of his employment” (para 22).
The issue whether there was entitlement to benefits deriving from service before
article 119 should have been implemented in Germany did not arise.
32. Barber v Guardian Royal Exchange Assurance Group (Case C-262/88)
[1990] ECR I-1889; [1991] 1 QB 344 involved a different question from that in
Bilka-Kaufhaus. The issue in Barber was whether benefits under contracted-out
schemes fell within “pay” for the purposes of article 119. The court held that they
Page 13
did – para 28. Under the cross heading, “Effects of this judgment ratione temporis”
the court considered in paras 40-44 the question whether the judgment should be
restricted in relation to any retrospective effect. Some passages from these
paragraphs are of significance in understanding whether this case has any bearing
on the principle of non-retroactivity of legislation. At para 40 the court recorded the
submissions of the Commission and the UK government:
“40. … the Commission has referred to the possibility for the
court of restricting the effect of this judgment ratione temporis
in the event of the concept of pay, for the purposes of the
second paragraph of article 119 of the Treaty, being interpreted
in such a way as to cover pensions paid by contracted-out
private occupational schemes, so as to make it possible to rely
on this judgment only in proceedings already pending before
the national courts and in disputes concerning events occurring
after the date of the judgment. For its part the United Kingdom
emphasised at the hearing the serious financial consequences
of such an interpretation of article 119. The number of workers
affiliated to contracted-out schemes is very large in the United
Kingdom and the schemes in question frequently derogate from
the principle of equality between men and women, in particular
by providing for different pensionable ages.”
33. Referring to its judgment in Defrenne II, the court then made clear in para 41
that taking the course that the Commission and the UK government had invited it to
follow was only possible as an exceptional measure. It said that “it may, by way of
exception, taking account of the serious difficulties which its judgment may create
as regards events in the past, be moved to restrict the possibility for all persons
concerned of relying on the interpretation which the court, in proceedings on a
reference to it for a preliminary ruling, gives to a provision.” (emphasis added)
34. Another factor in play in the court’s decision to restrict the effect of its
judgment was that, because of earlier Directives, “the member states and the parties
concerned were reasonably entitled to consider that article 119 did not apply to
pensions paid under contracted-out schemes and that derogations from the principle
of equality between men and women were still permitted in that sphere” – para 43.
This factor carries echoes of the situation which pertained in Defrenne II. As in that
case, the decision in Barber does not constitute an example of a general principle of
non-retroactivity for EU legislation. It is, rather, an instance of curtailing what would
otherwise be the logical application of the judgment to existing and precedent
situations for essentially practical reasons.
Page 14
35. The scope of the Barber limitation was considered in Ten Oever v Stichting
Bedrijfspensioenfonds voor het Glazenwassers- en Schoonmaakbedrijf (Case C109/91) [1993] ECR I-4879; [1995] ICR 7. That case related to an occupational
pension scheme. Until 1 January 1989 rules of the scheme provided for survivors’
pensions for widows only, but after that date widowers also were entitled to
pensions. After the death in October 1988 of the applicant’s wife, who had been a
member of the scheme, he requested but was refused the grant of a widower’s
pension. He brought proceedings for a declaration that he was entitled to the pension
because such a pension was to be treated as “pay” within the meaning of article 119
of the EEC Treaty and that no discrimination between men and women was
permissible. The national court referred to the Court of Justice the questions whether
“pay” in article 119 covered non-statutory benefits to surviving relations and, if so,
from what date the applicant could claim a widower’s pension.
36. Various possible interpretations of the effect of the Barber limitation were
considered by the judge rapporteur and the Advocate General – see AG10. One of
these was “to apply equal treatment to all pension payments made after 17 May 1990
[the date of the Barber judgment], including benefits or pensions which had already
fallen due and … irrespective of the date of the periods of service during which the
pension accrued.” Advocate General Van Gerven explained in AG13-17 why he
considered that it was not appropriate to do so. An important passage appears at
AG13:
“Before I take my position on the effect in time of Barber v
Guardian Royal Exchange Assurance Group (Case C-262/88)
[1990] ICR 616, I consider it important to clarify the rationale
which led the court to introduce that limitation into its
judgment. That that is an unusual step needs no demonstration,
given the declaratory character which in principle attaches to
the court’s interpretation of Community law pursuant to article
177 of the EEC Treaty: … That was formulated by the court in
Amministrazione delle Finanze dello Stato v Denkavit Italiano
Srl (Case 61/79) [1980] ECR 1205, 1223-1224, paras 16-18
and Amministrazione delle Finanze dello Stato v Meridionale
lndustria Srl (Cases 66/79, 127/79, 128/79) [1980] ECR 1237,
1260-1261, paras 9-11:
‘The interpretation which, in the exercise of the
jurisdiction conferred on it by article 177, the Court of
Justice gives to a rule of Community law clarifies and
defines where necessary the meaning and scope of that
rule as it must be or ought to have been understood and
applied from the time of its coming into force. It follows
that the rule as thus interpreted may, and must, be
Page 15
applied by the courts even to legal relationships arising
and established before the judgment ruling on the
request for interpretation, provided that in other
respects the conditions enabling an action relating to the
application of that rule to be brought before the courts
having jurisdiction, are satisfied.
As the court recognised in its judgment of 8 April 1976
in Defrenne v Sabena (Case C-43/75) [1976] ECR 455,
it is only exceptionally that the court may, in application
of the general principle of legal certainty inherent in the
Community legal order and in taking account of the
serious effects which its judgment might have, as
regards the past, on legal relationships established in
good faith, be moved to restrict for any person
concerned the opportunity of relying on the provision as
thus interpreted with a view to calling in question those
legal relationships’ …” (emphasis added)
37. Once again, the exceptionality of restricting the full availability of a right
declared by the CJEU as deriving from an EU measure is emphasised. AG Van
Gerven was clearly heavily influenced to the view that a restriction on the
availability of the right was essential because of the dire financial consequences that
would otherwise follow. They had been described in the Judge Rapporteur’s report
at p 86. If the option discussed above had been chosen, “the additional financial
impact on occupational pension schemes would be at least £45 billion, and [under
another canvassed option] £33 billion. [To these figures would have to be] added
approximately £2 billion per annum required in any event to meet the effect of
equalisation of pensions for the future.” It is unsurprising, therefore, that in para 26,
AG Van Gerven stated that the financial consequences of allowing article 119 to
have retroactive effect would be “catastrophic”.
38. It is important to recognise, however, that AG Van Gerven accepted that a
literal reading of the Barber judgment would apply equal treatment to all pension
payments made after 17 May 1990, including those which had already fallen due
irrespective of the date of the periods of service during which the pension accrued.
At para 19 he said:
“On a literal reading, it may indeed be asserted that the effects
of an occupational pension are only fully exhausted once the
pension has been paid in full to the retired employee. [He then
explained why that could not be permitted by continuing …]
Such a reading would mean that the temporal limitation of the
Page 16
judgment decided on by the Court would have almost no
significance and that the useful effect of the limitation imposed
by the Court would largely vanish.”
39. The Advocate General expanded on his reasons for adopting the more
restrictive interpretation of Barber in para 21:
“The fact that the good faith of the parties concerned, in
particular of employers and occupational pension funds, is to be
taken into account means that, before Barber, those parties, in
the belief that article 119 … was not applicable, could promise
pensions and make payments based on a different pensionable
age for men and women. The financial balance of the pension
schemes concerned could therefore be maintained on that basis
before the judgment. Only in respect of periods of service after
Barber did employers know that, in administering occupational
pension schemes and calculating the contributions to be made to
them, account had to be taken of a pensionable age which was
the same for men and women. If no account were taken of their
good faith and that of pension scheme administrators, that would
entail serious financial problems for pension schemes. All these
factors argue in favour of not allowing obligations entered into
and payments made before the date of the Barber judgment to
be affected.”
40. The court accepted the more restrictive definition, stating at para 19:
“Given the reasons explained in Barber [1990] ICR 616, 672,
para 44, for limiting its effects in time, it must be made clear
that equality of treatment in the matter of occupational pensions
may be claimed only in relation to benefits payable in respect
of periods of employment subsequent to 17 May 1990, the date
of the judgment in Barber, subject to the exception in favour of
workers or those claiming under them who have, before that
date, initiated legal proceedings or raised an equivalent claim
under the applicable national law.”
41. The court thus allied itself closely to the reasons in Barber (discussed in paras
33 and 34 above) for espousing and extending to occupational pension schemes a
similar restriction on the retroactive effect of article 119.
Page 17
42. Vroege v NCIV Instituut voor Volkshuisvesting BV (Case C-57/93) [1994]
ECR I-4541; [1995] 1 CMLR 881, concerned a pension scheme that until 1990 did
not admit married women. Among the questions referred to the CJEU was whether
the Barber limitation applied to Mrs Vroege’s claim for equal access to the scheme.
The court said that it was “important to remember the context in which it was
decided to limit the effects in time of the Barber judgment” (para 20), and reaffirmed
the two “essential criteria” for such a limitation, viz, “the general principle of legal
certainty … and the serious difficulties which its judgment may create as regards
the past for legal relations established in good faith” (para 21), both of which had
been met in Barber (paras 22-25). On that basis, it stated that the Barber limitation
“concerns only those kinds of discrimination which employers and pension schemes
could reasonably have considered to be permissible owing to the transitional
derogations for which Community law provided and which were capable of being
applied to occupational pensions” – para 27.
43. The Court of Appeal in the present case understood the decision in Ten Oever
to establish a general principle of EU law, to the effect that entitlement to a
survivor’s pension is “permanently fixed” as it is earned. It concluded that the same
principle could be applied where the law is changed not by a judgment, but by
legislation. It was influenced to this view by the opinion that the same policy
considerations lay behind the no retroactivity principle and the CJEU’s power to
limit the retrospective application of its judgments. To an extent, the same policy
considerations are in play. In both scenarios one can acknowledge the need to ensure
legal certainty and to protect the legitimate expectations of those who rely on the
law as it was thought to be.
44. But it is vital to keep the two concepts distinct. “No retroactivity” and “future
effects” are principles of law which apply to all EU legislation, unless a contrary
intention can be found. The Barber exception is an example of a technique used by
the CJEU to limit the generally retroactive application of its judgments, which it will
only exercise in the most exceptional circumstances and where the impact would be
truly “catastrophic”. The court limits the temporal application of its judgments in
cases where reliance has been placed on a different understanding of the law and
legitimate expectations may be upset, but only in the most special circumstances.
Therefore, how the court exceptionally applies a temporal limitation to one of its
rulings has no inevitable bearing on the temporal application of legislation as a
matter of principle.
45. Mr Chamberlain submits that all the cases considered by the Court of Appeal
and the EAT, in so far as they concerned article 119, involved the application of the
exceptional limitations imposed in Defrenne II and Barber. None expressed a
general rule that immediate application of EU legislation at the point of enactment
should normally be avoided. On the contrary, the consistent theme of the CJEU
Page 18
jurisprudence was that rights established by legislation should be activated at the
time that they were stated to exist.
46. I agree with Mr Chamberlain’s analysis of the relevant jurisprudence and I
turn now to consider his principal argument that two recent decisions of the Grand
Chamber of the CJEU (which troubled the Court of Appeal because of their
perceived incongruence with what that court considered to be the fundamental
principles governing retroactivity) put success for Mr Walker’s claim beyond doubt.
Those decisions are Maruko v Versorgungsanstalt der Deutschen Bühnen [2008]
ECR I-1757; [2008] All ER (EC) 977; (Maruko) and Römer v Freie und Hansestadt
Hamburg (Case C-147/08) [2011] ECR I-3591, [2013] 2 CMLR 11 (Römer).
Maruko
47. The claimant in Maruko was a registered life partner of a designer of
theatrical costumes who had been a member of the German theatre pension
institution (VddB). After his partner’s death in 2005, the VddB refused Mr Maruko
the pension which would have been paid automatically to a surviving spouse. He
brought a claim before the Bavarian Administrative Court, which referred several
questions to the Court of Justice. The most pertinent of these for present purposes is
the fifth. This was whether entitlement to the survivor’s benefits should be restricted
to the period from 17 May 1990 in the light of Barber, as considered in Coloroll
Pension Trustees Ltd v Russell (Case C-200/91) [1995] All ER (EC) 23; [1994] ECR
I-4389. The spouse’s pension in issue arose from Mr Maruko’s service and
contributions during a period that started in 1959 and ended (in all likelihood) before
2003.
48. Although the question proceeded on the premise that any limitation to the
relevant period of service would be from the date of the Barber judgment, the
CJEU’s summary of the issue makes it clear that it considered that wider
considerations were potentially at stake, for it said at para 74 that the referring court
“seeks to know whether … entitlement to the survivor’s benefit … must be restricted
in time and in particular to periods subsequent to [the Barber judgment]”.
49. The pension fund in the Maruko case presented an argument similar to that
advanced by the Secretary of State in the present appeal. It suggested that, to take
account of service before the Framework Directive’s implementation deadline
would give the Directive retrospective effect. The court summarised that argument
in para 75:
Page 19
“The VddB considers that the case which led to the judgment
in Barber’s case differs, on its facts and in law, from the case
in the main proceedings and that Directive 2000/78 cannot be
given retroactive effect by means of a decision that the
Directive applied at a date prior to the date of expiry of the
period allowed to member states for its transposition.”
50. At paras 77-79, the CJEU unambiguously rejected that argument:
“77. It is clear from the case law that the court may,
exceptionally, taking account of the serious difficulties which
its judgment may create as regards events in the past, be moved
to restrict the possibility for all persons concerned of relying on
the interpretation which the court gives to a provision in
response to a reference for a preliminary ruling. A restriction
of that kind may be permitted only by the court, in the actual
judgment ruling upon the interpretation sought (see inter alia
Barber at para 41; and Meilicke v Finanzamt Bonn-Innenstadt
(Case C-292/04) [2007] 2 CMLR 19 at para 36).
78. There is nothing in the documents before the court to
suggest that the financial balance of the scheme managed by
VddB is likely to be retroactively disturbed if the effects of this
judgment are not restricted in time.
79. It follows from the foregoing that the answer to the fifth
question must be that there is no need to restrict the effects of
this judgment in time.”
51. The material ruling of the court was that “The combined provisions of articles
1 and 2 of Directive 2000/78 preclude legislation such as that at issue in the main
proceedings under which, after the death of his life partner, the surviving partner
does not receive a survivor’s benefit equivalent to that granted to a surviving
spouse”. The effect of this, as regards Mr Walker and his husband, is unmistakable.
If he survives Mr Walker, his husband is entitled to a spouse’s pension on the same
basis as would a wife.
Römer
52. This was a case of a pensioner who had been in a registered life partnership.
His claim was for the same supplementary pension payments that were given to
Page 20
married pensioners. His pension rights arose from contributions paid during a period
of service from 1950 until 31 May 1990. The CJEU held that he was entitled to equal
treatment if German life partnerships were comparable to marriage.
53. One of the supplementary questions which the court considered was whether,
if Mr Römer was entitled to pension payments, their amount should be calculated
only by reference to the contributions that were made after the Barber judgment.
Advocate General Jääskinen approached this question on the basis that any
limitation of the period of service to be considered would require a restriction on the
otherwise natural application of the principle that contemporaneous discrimination
was forbidden unless exceptional circumstances would justify such a restriction
(AG157-158). As it happened, no party had requested one in the Römer case, and it
was, moreover, “by no means apparent from the documents in the case that the
financial balance of the supplementary pension scheme managed by the defendant
in the main proceedings risks being retroactively disturbed by the lack of such
limitation.” (AG159)
54. In the circumstances, the CJEU held that Barber had no bearing on Mr
Römer’s entitlement. Neither the Federal Republic of Germany nor the Freie und
Hansestadt Hamburg had suggested any limitation in time of the effects of the
present judgment and no evidence submitted to the court indicated that they should
be so limited.
55. From this it is clear that, unless evidence establishes 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 is no reason that he should be subjected to unequal treatment
as to the payment of that pension.
The decisions of the EAT and the Court of Appeal
56. Mr Chamberlain submitted that the EAT wrongly took AG Van Gerven’s
description of pension benefits in Ten Oever as “deferred pay” as equating the time
at which a pension right accrues with the time at which any discrimination in the
provision of resulting benefits is to be judged. I agree that the EAT was wrong to do
so. The point of unequal treatment occurs at the time that the pension falls to be paid.
If Mr Walker married a woman long after his retirement, she would be entitled to a
spouse’s pension, notwithstanding the fact that they were not married during the
time that he was paying contributions to his pension fund. Whether benefits referable
to those contributions are to be regarded as “deferred pay” is neither here nor there,
so far as entitlement to pension is concerned. Mr Walker was entitled to have for his
married partner a spouse’s pension at the time he contracted a legal marriage. The
Page 21
period during which he acquired that entitlement had nothing whatever to do with
its fulfilment.
57. As AG Jääskinen said in Römer at AG160:
“In the hypothetical case that Mr Römer had been able to enter
into a marriage in October 2001, instead of a life partnership,
the Freie und Hansestadt Hamburg would have had to increase
the supplementary pension paid to him … The financing of the
retirement scheme concerned must have been planned taking
into account the possibility of changes in the marital status of
pensioners.”
58. Likewise, the financing of Innospec’s retirement scheme should have been
planned taking into account a possible change in Mr Walker’s marital status. He
could not have been denied entitlement to a spouse’s pension if, perfectly legally,
he married a woman after he retired. His marriage to his current partner is just as
legal as would be a heterosexual marriage. His entitlement to a spouse’s pension is
equally well-founded.
59. The Court of Appeal considered that the Barber case explained how the
future effects principle should be applied to the Framework Directive. At para 11 of
his judgment, Lewison LJ said of the exception in Barber, “The concept
underpinning this limitation on the effect of the judgment is, in my judgment, the
same concept that distinguishes between situations that are permanently fixed or
established and those that are not.” In fact, none of the Barber line of cases mentions
the future effects principle. As Mr Chamberlain submitted, this is because that
principle is concerned with the effects of legislation, whereas Barber and Ten Oever
dealt with temporal limitations on judgments.
60. The approach of the Court of Appeal led it to the same conclusion as the
EAT, in equating the time at which a right to a pension accrues with the time at
which discrimination in the provision of benefits is to be judged. The implication of
this approach was considered by Professor Wintemute in an article in (2014) 43 ILJ
506, 510, commenting on the EAT judgment when he said:
“The implication of the EAT’s analogy was that, from 1980 to
2003, Mr Walker had been paid the lower ‘gay wage’ (one with
no expectation that a survivor’s pension would ever be paid to
the employee’s surviving partner despite the employee’s equal
contributions to the pension scheme), rather than the higher
Page 22
‘heterosexual wage’ (one with an expectation that a survivor’s
pension might be paid to the employee’s surviving spouse
based on the employee’s contributions to the pension scheme).”
61. This illustrates the essential flaw in the approach of the EAT and the Court
of Appeal. 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. 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.
62. Dealing with Maruko Lewison LJ said that the fifth question which the
referring court had posed (set out at para 47 above) was “very puzzling” – para 37.
He suggested (at para 40) that the court had given “an unnecessary answer to the
wrong question.” Undoubtedly, the referring court’s reference to 17 May 1990 was
misplaced – how could that date, being the date of the Barber judgment on equal pay
under article 119, have any possible relevance to the temporal application of the
judgment in Maruko on equal treatment under the Framework Directive? But the
Court plainly understood the referring court as asking essentially whether the effect
of its judgment should be “limited in time”. That question is only puzzling or
unnecessary if one proceeds on the assumption that there is a general rule that the
time at which a pension right accrues should be equated with the time at which
discrimination in the provision of resulting benefits occurs. For the reasons given
earlier, I do not consider that this is correct. The response given to the fifth question
in Maruko is therefore perfectly explicable and provides the inescapable answer in
Mr Walker’s case.
63. In order to deal with the Court of Appeal’s treatment of the Römer decision,
it is necessary to say a little more about the questions referred to the CJEU in that
case. The fifth question had two parts which the CJEU interpolated as 5(a) and (b).
Question 5(a) asked whether, if the domestic legislation contravened the Framework
Directive, Mr Römer was entitled to supplementary pension payments in line with
married people before that legislation was amended. This was answered
affirmatively by the court – see paras 53-56. Question 5(b) was whether, if the
domestic legislation contravened the Directive, Mr Römer was entitled to backdated
supplementary pension payments even for the period before the transposition
deadline for the Framework Directive. Question 6 was whether, if Mr Römer was
entitled to supplementary pension payments, the amount of those payments should
be calculated by reference to the contributions made after the Barber judgment.
Page 23
64. Mr Römer had conceded that the answer to question 5(b) might be that he
could only receive backdated supplementary payments from 2003. But, as far as
question 6 was concerned, “his pension payments should, in any event, be calculated
from that date on the basis of all the contributions he has paid, irrespective of their
date.” A-G Jääskinen – AG142. The CJEU accepted that Mr Römer was not entitled
to payments that were due to be paid before 2003 (because the Directive had not
been implemented before then) but that when it came to the calculation of the
quantum of the pension payments, the fact that the contributions underpinning the
entitlement had been paid before then made no difference – para 66.
65. Put simply, Mr Römer could not claim pension payments before 2003 but the
pension due to him after that date should be calculated on the basis of all the years
during which entitlements to them had been built up. Translating that to Mr Walker’s
case, the message is clear. He could not have claimed entitlement to the payment of
the pension before the transposition of the Directive into UK law but, once that
happened, the rate of his pension was to be based on all the years of his service, even
those which preceded the date of the transposition.
66. The Court of Appeal misunderstood Römer. At para 43, Lewison LJ said that
the CJEU had held that entitlement to equal treatment did not become part of EU
law until the time limit for transposing the Directive had expired. On that basis, the
“answer to question 5 was plainly a negative answer: the entitlement did not apply
before the deadline for transposing the Directive” (para 44). It was, of course, true
that entitlement did not arise until the Directive had to be transposed, but this does
not address the question of what the entitlement was after the deadline was reached.
Lewison LJ thought that question 6 was conditional on an affirmative answer to
question 5” and since, in his estimation, a negative answer had been given to
question 5, question 6 was irrelevant. This was, I am afraid, wrong.
67. In the first place, both parts of question 5 had not been given a negative
answer. Question 5(a) had been answered affirmatively. More importantly, question
6 remained supremely relevant to Mr Walker’s case. His entitlement to a spouse’s
pension did not materialise until after the transposition of the Directive but the
response to question 6 provided the key to the nature of the right that Mr Walker
then acquired. It was entitlement to a pension calculated on the basis of his years of
service before the Directive was transposed.
Parris v Trinity College Dublin
68. The case Parris v Trinity College Dublin (Case C-443/15) [2017] Pens LR 3
was a reference to the CJEU from the Labour Court in Ireland. It also concerned a
claim for a survivor’s pension under the Framework Directive. Dr Parris had entered
Page 24
a civil partnership with his partner of 30 years in the UK on his 63rd birthday in
2009. This civil partnership was not recognised in Ireland until a change in the law
on 12 January 2011. Dr Parris had been employed as a lecturer by Trinity College
Dublin (TCD) from 1972 to 2010. He took early retirement in 2010. He had been a
member of TCD’s non-contributory occupational pension scheme. The scheme
provided a survivor’s pension, but only where the marriage or civil partnership took
place before the member’s 60th birthday. The questions referred to the CJEU
concerned whether TCD’s refusal to provide the survivor’s pension to Dr Parris’
civil partner, by reference to that rule, constituted indirect discrimination on sexual
orientation grounds, direct age discrimination, and/or discrimination on a
combination of those grounds.
69. The questions referred did not concern Dr Parris’s period of service. In fact,
his employment almost entirely predated the deadline for transposing the
Framework Directive, and had ended before Ireland’s recognition of civil
partnerships. The UK nevertheless made submissions to the CJEU which broadly
mirror those of the Secretary of State in the present appeal. It was submitted that
since Dr Parris’s pension entitlements were based almost entirely on periods of
service completed before the coming into force of the Directive, they could not be
subject to the principle of equal treatment.
70. Advocate General Kokott rejected those submissions. At paras 39-42 of her
Opinion she said
“39. … that objection is unfounded. For it is settled case law
that a new rule of law applies from the entry into force of the
act introducing it, and, while it does not apply to legal situations
that have arisen and become definitive under the old law, it
does apply to their future effects, and to new legal situations. It
is otherwise, subject to the principle of the non-retroactivity of
legal acts, only if the new rule is accompanied by special
provisions which specifically lay down its conditions of
temporal application.
40. Those principles also apply to the temporal application
of Directive 2000/78. A restriction of the temporal scope of that
Directive, in derogation from the aforementioned general
principles, would have required an express stipulation to that
effect by the EU legislature. No such special provision has been
made, however.
Page 25
41. Consequently, the Court has already declared Directive
2000/78 to be applicable to cases concerning occupational and
survivor’s pension schemes the entitlements under which had
arisen – much as they did here – long before the entry into force
of that Directive and any contributions or reference periods in
respect of which also predated the entry into force of that
Directive. Unlike in Barber, for example, concerning article
119 of the EEC Treaty (now article 157 TFEU), the Court
expressly did not apply a temporal restriction to the effects of
its case law relating to occupational pension schemes under
Directive 2000/78. I would add that there was, moreover, no
longer any need for such a temporal restriction, since it had
become sufficiently apparent to all the interested parties since
the judgment in Barber that occupational pensions fall within
the EU-law concept of pay and are subject to any prohibitions
on discrimination.
42. It is true that the Court has held that the prohibition on
discrimination contained in Directive 2000/78 cannot give rise
to claims for payments in respect of periods in the past that
predate the time limit for transposing that Directive. However,
the recognition of the right to a future survivor’s pension, at
issue in the present case, is unaffected by that principle because
such recognition is concerned only with future pension scheme
payments, even though the calculation of those payments is
based on periods of service completed or contributions made in
the past.”
71. These statements are entirely consistent with the analysis of Maruko and
Römer which Mr Chamberlain offered and which I accept. The CJEU held that Dr
Parris’s case did not amount to discrimination at all, citing the principle in Maruko
that legislation treating surviving civil partners less favourably than surviving
spouses will amount to direct discrimination if the two are in comparable situations
under national law, but noting that the rule in issue in Dr Parris’s case applied
equally to opposite-sex marriages and same-sex civil partnerships. His inability to
meet the qualifying criterion for the survivor’s pension resulted from the lack of
provision for same-sex partnerships under Irish law at the time of his 60th birthday
and it was for member states to decide both whether to make such provision and, if
so, whether to make it retrospective. The CJEU did not, therefore, need to address
the UK government’s argument that Dr Parris’s claim fell outside the temporal scope
of the Directive but nothing in its judgment cast doubt on AG Kokott’s clearly
expressed opinion that the submissions of the UK were incompatible with Maruko
and Römer.
Page 26
Conclusion on the first issue
72. I would therefore hold that Mr Walker’s husband, provided he does not
predecease him, and that they remain married at the time of Mr Walker’s death, is
entitled under the Framework Directive to a spouse’s pension calculated on the basis
of all the years of Mr Walker’s service with Innospec. On that account, paragraph
18 of Schedule 9 is incompatible with the Framework Directive. In particular,
paragraph 18(1)(b) which authorises a restriction of payment of benefits based on
periods of service before 5 December 2005 cannot be reconciled with what I
consider to be the plain effect of the Directive.
Must effect be given to paragraph 18 or should it be disapplied – the second issue?
73. The appellant claims that, applying the principles established by
Kücükdeveci v Swedex GmbH and Co KG (Case C-555/07) [2010] 2 CMLR 33,
paragraph 18 must be disapplied. As Lord Mance explained in R (Chester) v
Secretary of State for Justice in the passage cited at para 10 above, for the general
principle of non-discrimination to apply, the context must fall within EU law. Both
the EAT and the Court of Appeal considered that non-discrimination did not become
a fundamental principle of EU law until the transposition deadline of the Framework
Directive – Lewison LJ at para 49 and Underhill LJ at para 59.
74. Mr Chamberlain submits that this is incorrect, arguing that the CJEU did not
say that non-discrimination only became a general principle of EU law in 2003. Its
relevant finding was that Mr Römer’s claim for equal pension benefits only came
within the material scope of EU law from that time. Whether that is right or not need
not be decided finally in this case because Mr Chamberlain’s second argument
disposes of the issue. That is that non-discrimination on grounds of sexual
orientation is now a principle of EU law. It follows that any contemporary denial to
his husband of a spouse’s pension, calculated on all the years of Mr Walker’s
service, would be incompatible with the Framework Directive. In so far as paragraph
18 authorises that, it must be disapplied on the basis of the principles articulated in
Kücükdeveci and Chester.
The third issue
75. In light of my conclusion on the first two issues, it is not necessary to decide
the third issue, viz whether paragraph 18 is incompatible with Mr Walker’s rights
under article 14 of ECHR, when read together with article 8 and article 1 of the First
Protocol.
Page 27
Final conclusion
76. I would allow Mr Walker’s appeal and declare that, in so far as it authorises
a restriction of payment of benefits based on periods of service before 5 December
2005, paragraph 18 of Schedule 9 to the 2010 Act is incompatible with the
Framework Directive and must be disapplied. I would make a further declaration
that Mr Walker’s husband is entitled to a spouse’s pension calculated on all the years
of his service with Innospec, provided that at the date of Mr Walker’s death, they
remain married.
LORD CARNWATH AND LORD HUGHES:
77. We agree that Mr Walker’s appeal should be allowed, but on more limited
grounds. This appeal was heard at the same time as the appeal in O’Brien v Ministry
of Justice [2017] UKSC 46, in which the court has decided to refer to the European
court a question relating to the pension entitlement of part-time workers. As
explained in the judgment of Lord Reed, that arises from a difference among the
members of the court as to the interpretation of the Ten Oever line of authority (as
he describes it – para 20). In so far as Lord Kerr’s reasoning in the present case (in
particular, paras 35-46) turns on his interpretation of that line of authority, we prefer
to await the authoritative ruling of the European court.
78. The present case is in our view distinguishable substantially for the reasons
given by Lord Kerr at paras 56-58. On any view Mr Walker had earned a right to a
pension for his spouse. That right, and the possibility of a change in his marital
status, should have been taken into account in the financing of the scheme. The
question who qualified as his spouse fell to be answered at a date when it was
unlawful under the Directive to discriminate as between heterosexual and same-sex
marriages. At that time, as Lord Kerr says (para 56), he was entitled to have for his
married partner a spouse’s pension; “The period during which he acquired that
entitlement had nothing whatever to do with its fulfilment.” To the extent that
paragraph 18 of Schedule 9 to the Equality Act 2010 restricted that right it was
incompatible with European law, and must be disapplied.