NOTES OF CASES
| Published date | 01 May 1988 |
| DOI | http://doi.org/10.1111/j.1468-2230.1988.tb01761.x |
| Date | 01 May 1988 |
NOTES
OF
CASES
EQUALITY, SURVIVOR’S BENEFITS
AND
OCCUPATIONAL PENSION
SCHEMES
Introduction
THE
reference to the Court of Justice of the European Communities
in
Newstead
v.
(1)
Department
of
Transport and
(2)
Her Majesty’s
Treasury’
initially promised a review
of
the complex inter-
relationship of Article
119
EEC with the subsequent equality
directives in relation to occupational pension schemes. At the heart
of
the complaint was the issue of unequal provision of survivor’s
pensions. In a claim supported by the Equal Opportunities
Commission, Mr. Newstead, a civil servant, who declared himself
to be a “confirmed bachelor,” raised an objection to the compulsory
deduction
of
one and a half per cent.
of
his gross salary by way of
contribution to a fund providing for widow’s pensions. At the time
of
the complaint female civil servants were not subject to this
compulsory deduction.2 The contributions were refunded with
compound interest at the rate of four per cent. per annum to
unmarried male civil servants upon retirement (or to their estate
upon death). Discrimination was alleged in that a male civil servant
was denied immediate access to a part of his salary in a way that a
female employee was not. The Industrial Tribunal accepted that
Mr. Newstead received less favourable remuneration for the
purposes
of
a claim under the Equal Pay Act
1970
and there was a
detriment on the ground of sex for the purposes of the Sex
Discrimination Act
1975.
However, it was held that the complaint
was covered by the exemptions relating to death or retirement
contained in the In the Employment Appeal Tribunal Mr.
Newstead turned to European Community law, arguing that the
deductions from his salary were contrary to Article
119
EEC and,
in the alternative, Articles
l(1)
and
5(1)
of
the equal treatment
directive. The EAT felt unable to decide the matter without
further clarification from the European
In Britain the legal nature of pensions was clarified to some
extent in the round of debates and reforms
of
the
1970s.
Pensions
were generally accepted as a form of deferred pay although
dependant’s benefits were not
so
easy to categorise. They could be
Case 192/85, [1988]
I.R.L.R.
66.
At the second oral hearing Counsel for
Mr.
Newstead reported that as from 1 July
1987 both women and men would be required to contribute towards a survivor’s pension
in the Principal Civil Service Pension Scheme.
s.6(1A)
of
the
Equal
Pay Act 1970; s.6(4) of the Sex Discrimination Act 1975. The
latter has been amended by
s.2
Sex Discrimination Act 1986 in order to
conform
with the
ruling in Case 15284,
Marshall
v.
Southampton and South West Hampshire Area Health
A;thorify (Teaching)
[1986] 1
C.M.L.R.
688.
[1986]
2
C.M.L.R.
1%.
355
356
THE MODERN LAW REVIEW
[Vol. 51
seen as part of deferred pay from a “family wage” perspective or
as an insurance benefit.5 In Britain, and within the European
Community, a view
of
households headed by a male breadwinner
has prevailed and very rarely have female employees been given
the opportunity of providing automatically for survivor’s benefits.
Where such opportunities exist they are often circumscribed by
tests
of
dependency.6 Complications have arisen with the advent of
equality legislation since pension provision generally differed
between men and women. The differences have been justified by
perceived and real differences in women’s labour market participa-
tion, different life expectancies and different roles within the
family. The United Kingdom opted for the easy solution of
adopting the blanket exceptions relating to “death and retirement”
referred to above. The discrepancies in national pension provision
forced the European Community to incorporate various exclusions
into the equality directives. For example, differences in pensionable
age, and survivor’s benefits are excluded from Council Directive
79/7/EEC7 which deals with state social security schemes, and
member states are given the option to defer the obligation to
introduce equality in pensionable age and survivor’s benefits
in occupational social security schemes in Council Directive
86/378/EEC.8
Developments before Newstead
Generally, under Article 119 EEC the concept of “pay” has
been given a liberal interpretation and in accordance with accepted
industrial relations practice has been held to encompass a wide
range of payments in cash and in kind that make up the overall
pay package.’ The question of whether pension contributions are
within Article 119 EEC has received a mixed reception from the
Advocates General and the European Court. The central issue is
how far pension provisions can be viewed as an integral part of the
employment relationship, and how far they can be seen as a
general social security issue and therefore outside the scope of
Article 119 EEC. The situation has been complicated by the
addition of the two directives on state and occupational social
security. In order to understand and contextualise the issues raised
by the
Newstead
reference, the jurisprudence in this area needs to
be charted.
Equal Status
for
Men and Women in Occupational Pension Schemes, Report
of
the
Occupational Pensions Board 1976, Cmnd 6599,
paras.
6, 22-3.
For
an overview see European Parliament,
Report drawn
up
on behalf
of
the
Committee on Social Affairs and Employment, on the equal treatment
of
widows and
widowers
as
regards social security,
March 12, 1984, Doc 1-15W83.
’
O.J.
1979 L 6/24, Article 7.
*
O.J.
1986 L 225/40, Article 9.
See Case 12/81,
Garland
v.
British Railways Engineering Ltd.
[1982] E.C.R. 359;
Hayward
v.
Camme11 Laird
[1987] I.R.L.R. 186 (C.A.).
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