Sex Discrimination: Pension scheme not capable of retroactive amendment to prevent discrimination

In Safeway Ltd v Newton & Safeway Pension Trustees Ltd [2019] EUECJ C-171/18, the Court of European Justice (ECJ) considered a change that was made to Safeway’s pension scheme, a question referred to it for preliminary reference from the Court of Appeal. Initially, the pension scheme allowed men and women to receive their pensions at different ages – 65 for men and 60 for women. Following the case of Barber v Guardian Royal Exchange, in which it was held that fixing a different ‘Normal Pension Age’ (NPA) for different sexes constituted discrimination under Article 119 of the EC Treaty (i.e. equal pay for equal work), Safeway decided to change its NPA to 65 for everyone from 1 December 1991. In later proceedings, the Court of Appeal held that Safeway had not properly implemented this until 2 May 1996. The questions then referred to the CJEU was whether the pension rights of the members of the pension scheme in relation to the period from 1 December 1991 to 2 May 1996 must be calculated on the basis of a uniform NPA of 60 or 65, and therefore, whether the pension Trust Deed could validly, in respect of that period, retroactively equalise the NPA of those members to that of the persons within the previously disadvantaged category, namely male workers.

The ECJ declared that it was not possible in this case for the pension scheme to adopt a different measure which equalises with retroactive effect the NPA in order to end discrimination (i.e. fixing of an NPA differentiated by gender) for the period in issue.  This is so, even where such a measure is authorised under national law and under the Trust Deed governing that pension scheme. It found that whilst there should not be any form of discrimination, it was equally the case that there must be certainty at law regarding accrued rights, and retrospectively amending these accrued rights in order to avoid discrimination was in breach of that certainty. The only exception to this rule to end discrimination for pension schemes is where it is warranted by an overriding public interest, which in some cases may include the risk of seriously undermining the financial balance of the pension scheme.

Published: 24 October 2019

Article Sections: Benefits | Payments during Employment

Tags: pension, retroactive


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