Justification
2.25 As far as justification is concerned, the Government
in its letter relied in general terms on the risk of affecting
the balance of pension schemes which have not budgeted for them.
It argued that backdating changes to pensions would impose an
unexpected burden on pension schemes by reference to past periods
when the trustees or managers would have had no reason to take
account of this potential liability. It stated that this was also
consistent with the Government's long-standing policy that improvements
to occupational pension provisions to reflect changing social
attitudes and expectations should not be made retrospectively
at the cost of employers or the taxpayer.
2.26 We note, however, that the Government in its
letter produced very little in the way of concrete evidence about
the precise scale of the additional burden which it alleged would
be imposed on existing occupational pension schemes. In our earlier
report, we pointed out that the onus rests on the Government to
demonstrate sufficiently weighty reasons for discrimination on
grounds of sexual orientation, and that if the justification relied
on were that it would upset the balance of existing schemes, "evidence
must be provided of the precise impact on those schemes".[34]
Such evidence could be expected to show the number of people who
would benefit if survivor's pensions were available to surviving
same-sex partners in respect of their whole period of pensionable
service; the number of schemes which currently confine survivor's
pensions to married partners; the number of schemes in which members
make different contributions according to whether they are married
or unmarried; and the assumptions on which the pension schemes
project their future liabilities. All of this is information which
would be necessary in order to assess the extent to which paying
survivor's pensions to same-sex partners would exceed the expected
liabilities of the scheme.
2.27 In Barber, for example, the UK Government
supported its argument that the Court's interpretation of Article
119 would have serious financial consequences for the UK by referring
to the large numbers of workers affected and the fact that pension
schemes frequently provide for different pensionable ages for
men and women.[35] The
Court accepted its argument. In Griesmar, by contrast,
the Court held that the French Government had not established
that the number of retired male civil servants who would be able
to prove that they had been treated unequally was such as to give
rise to serious economic repercussions.
2.28 In light of the Government's answers in its
letter to our questions concerning justification, we consider
the question of survivor's pensions for same-sex partners to be
closer to Griesmar than Barber. The Government asserted
in its letter that backdating survivor's pensions for civil partners
to 1988 would add £125 million to the liabilities of public
service pension schemes, but its assumptions in arriving at this
figure are not clear. There is no concrete evidence of the number
of same-sex partners likely to claim a survivor's pension, nor
of the number of existing schemes which confine survivor's pensions
to married spouses, nor of the actuarial assumptions about the
number of survivor's pensions likely to be claimed. If, for example,
most pension schemes now provide for survivor's pension for unmarried
opposite-sex couples, as well as spouses, actuarial assumptions
based on marriage statistics can no longer be relevant to such
schemes. No evidence has been provided to demonstrate the basis
on which schemes which already grant survivor's pensions to unmarried
partners calculate their future liabilities. In these circumstances,
we were not satisfied that the Government in its letter went beyond
mere assertion in stating that paying survivor's pensions to same-sex
partners would upset the balance of existing schemes and/or cause
serious economic repercussions.
2.29 In our
view therefore the onus of justification in relation to the difference
of treatment had not been made out by the Government in its letter
responding to our concerns. In the absence of such justification,
we conclude that the difference of treatment would be incompatible
with Article 14 in conjunction with Article 1 of Protocol 1. We
welcome the fact that this now appears to be accepted by the Government.
Conclusion
2.30 In its letter of 29 July the Government disagreed
with the view we expressed in our earlier report that, on the
basis of the reasoning of the House of Lords in Mendoza,
the denial of survivor's benefits to same-sex partners may in
certain circumstances already be in breach of Article 14 ECHR
in conjunction with Article 1 of Protocol 1, even before the enactment
of the Civil Partnership Act.[36]
The Government inferred from this that it is also our view that
the service which should be taken into account goes back to the
date of implementation of the Human Rights Act 1998.
2.31 This is a misunderstanding of the view we expressed
in our earlier report. In order to clarify that position and in
the hope of avoiding future uncertainty on this important question,
we now conclude by summarising our understanding of the position
under both the current law and following enactment of the Civil
Partnership Act. The correct analysis seems to us to be as follows.
(1) A difference of treatment in relation to pension
benefits on the basis of sexual orientation is within the scope
of Article 14 ECHR in conjunction with Article 1 of Protocol 1
and requires weighty justification if it is to be compatible with
Convention rights (Karner v Austria).
(2) This has been the position in UK law since 2
October 2000 (when the HRA came into force).
(3) Where a benefit is available to unmarried heterosexual
couples as well as married couples, it is discriminatory to exclude
same-sex couples from the same benefit without justification (Mendoza).
The right to complain of such discrimination is only available
to those whose partner died since 2 October 2000.
(4) Anybody whose same-sex partner has died since
2 October 2000, when the HRA came into force, and who was a participating
member in a pension scheme which pays survivor's pensions to unmarried
opposite-sex partners in return for the same contributions, should
be entitled to a survivor's pension on the same terms as the unmarried
opposite-sex partner in the same position, unless there is justification
for the difference of treatment.
(5) When the Civil Partnership Act comes into force,
so that same-sex partners can become civil partners, it would
have been discriminatory to exclude a surviving same-sex registered
partner from the pension available to a surviving spouse, without
weighty justification for such difference of treatment. This only
applies to people whose registered partner died after the Civil
Partnership Act came into force.
(6) It follows that, in order to be compatible with
Article 14 and Article 1 of Protocol 1, the new Regulations made
under the enabling provision in the Bill would have to require
that pension funds which provide survivor's pensions to married
partners, where married and unmarried members of the scheme make
the same contribution, also make such pensions available to surviving
civil partners on the same terms.
(7) In these circumstances, the onus is on the Government
to justify any difference of treatment by reference to evidence
of the impact on existing schemes. In our view, on the basis of
its letter of 29 July, it had not established that the number
of surviving civil partners who will be entitled to a survivor's
pension on the basis of their deceased partner's full contribution
record is such as to give rise to serious economic repercussions,
or that the impact on existing schemes will be so grave as to
justify a difference of treatment. We welcome the fact that this
is no longer necessary because the Government has agreed to remove
the difference in treatment.
12 Bill 132-EN Back
13
These provisions, which were added by amendment at Report stage
in the House of Lords, enable civil partnerships to be formed
by persons within the specified degrees of family relationship
who are over 30 and have lived together for 12 years. Back
14
Fifteenth Report, Session 2003-04, Civil Partnership Bill,
HL Paper 136, HC 885 Back
15
Ibid., see Appendix Back
16
Ibid., at paras 26 and 47 Back
17
Appendix 1 Back
18
HC Deb., 12 October 2004, cols 176 and 249-250. Back
19
EN para. 472 Back
20
Fifteenth Report, Session 2003-04, op cit Back
21
HC Deb., 12 October 2004, cols 249-250 (Anne McGuire MP, Parliamentary
Under-Secretary of State for Scotland).The Government rightly
states that there is no need to amend the Bill in order to give
effect to the change of policy: the change will be achieved by
way of regulations (see above). Back
22
Clause 244 of the Bill Back
23
"It must therefore be held that the direct effect of Article
119 of the Treaty may not be relied upon in order to claim entitlement
to a pension with effect from a date prior to that of this judgment",
Douglas Harvey Barber v. Guardian Royal Exchange Group,
Case C-262/88, para. 45. Back
24
ibid., para. 44 Back
25
ibid., para. 40 Back
26
Ten Oever v. Stichting (Case C-109/91), para. 15 Back
27
ibid., at para. 19 Back
28
In Barber itself, for example, the Court found discrimination
by comparing the pension paid to a woman in certain circumstances
with the entitlement of a man of the same age in similar circumstances:
"If a woman is entitled to an immediate retirement pension
when she is made compulsorily redundant, but a man of the same
age is entitled in similar circumstances only to a deferred pension,
then the result is unequal pay between those two categories of
workers": op cit., at para. 38. Back
29
Case C-366/99, Griesmar v Ministre de l'Economie, des Finance
at de l'Industrie [2001] ECR I-9383 Back
30
ibid., at para. 58. We note that, on the Government's analysis
of the ECJ pensions cases, the Court should have found there to
be no difference of treatment, because the right to a service
credit in respect of children would already have accrued in the
past, giving rise to an entitlement which was merely deferred
until the date of payment of the pension. Back
31
ibid., at paras. 71-72 Back
32
ibid., at para. 77 Back
33
Although the Government in its letter considered that the question
of justification does not arise because there is no relevant difference
of treatment, it went on to consider the issue "since the
Committee has raised a number of questions" in relation to
it. Back
34
Fifteenth Report, Session 2003-04, op cit., at para. 46 Back
35
Barber, op cit., at para. 40 Back
36
ibid., at paras. 37-39 Back