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19th October 2015

Benefits for Part-time workers and civil partners

The Court of Appeal has dismissed the appeals against decisions of the Employment Appeals Tribunal in O’Brien v Ministry of Justice and Walker v Innospec and others [2015] EWCA Civ 1000 which concerned the benefit entitlements of part-time workers and civil partners.

The Court of Appeal has dismissed the appeals against decisions of the Employment Appeals Tribunal in O’Brien v Ministry of Justice and Walker v Innospec and others [2015] EWCA Civ 1000 which concerned the benefit entitlements of part-time workers and civil partners. To transpose the terms of EU directives into UK law, a change to the law was made on 7 December 2000 so that part time workers could not be treated less favourably than full-time workers, unless such treatment could be objectively justified. Another change to the law on 5 December 2005, enabled same sex couples to enter civil partnerships but provided that benefits for surviving civil partners could be restricted to the period of the deceased member’s pensionable service since that date (with contracted-out benefits based on rights built up from 6 April 1988). The facts Mr O’Brien sat as a part-time judge from 1978 until 2005. He was entitled to the same benefits as full-time judges but was excluded from pension entitlement. After 7 December 2000, the court held that the exclusion of Mr O’Brien from entitlement to a judicial pension was not objectively justified. It now had to consider whether to take account of all of Mr O’Brien’s sitting days in calculating of his benefits. Mr Walker worked for Innospec from 1980 until he retired in 2003. He entered into a civil partnership and asked the court to decide whether his scheme should pay a surviving spouse’s pension in the event of his death based on all his pensionable service. The decision The court found that a worker’s claim for pension benefits based on rights derived from EU directives, only covers the period following the date on which the relevant directive should have been (or, if earlier, was) implemented into UK law. The claim for benefits cannot cover the whole period of the worker’s service where that is longer. Broadly, subject to the scheme rules: the benefits for part-time workers (such as Mr O’Brien) should be calculated on the basis of the period of their service on and after 7 April 2000; and the benefits for surviving civil partners and same-sex spouses (such as those due on Mr Walker’s death) can be restricted to the period of the deceased member’s pensionable service since 5 December 2005 (with contracted-out benefits based on rights built up from 6 April 1988). This decision provides clarity on how the benefits of part time workers, surviving civil partners and same-sex spouses should be dealt with. Trustees may want to check how their scheme rules deal with such groups of people and, if appropriate, decide whether to make more than the minimum benefit entitlement available to them. Whilst the Government’s review of the differences in survivor benefits for opposite-sex and same-sex couples in 2014 did not recommend that a greater level of benefits should be provided than those described above, the Government is still considering whether to make any changes to reduce or eliminate inequality in the provision of survivor benefits by regulations. Trustees and employers should therefore continue to be alert to future developments in this area. For more information on pensions please visit our Pensions Service page or contact Christopher Nuttall on 01604 463134 or click here to email Christopher.

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