A landmark ruling finding veganism is a philosophical belief will have a wider impact on the pensions industry, experts have said, as they warned trustees against knee-jerk reactions.
Employment judge Robin Postle found on January 3 that ethical veganism was worthy of protection under the Equality Act 2010.
In a case brought by Jordi Casamitjana, it was claimed that he was unfairly dismissed by the League Against Cruel Sports, an animal welfare charity, for raising concerns about the way the League’s pension scheme was invested – including in companies that experimented on animals.
Stuart O’Brien, partner at Sackers, explained: “His employer offered a contract-based pension, which until 2015, auto-enrolled its staff into an ‘ethical’ fund. The employer subsequently changed the default fund, and offered an ethical fund only as a ‘self-select’ option for employees.”
Even though Mr Casamitjana was able to choose to invest his own pension in the self-select ethical fund and did so, his concern was that donors to animal protection charities have the right to expect their donations will be invested in a way that is compatible with their beliefs.
He argued it was not sufficient to merely give employees the option to select an ethical fund.
In its defence the League stated on its website: “There are pension funds available that offer more ‘ethical’ choices – but these are generally not available for organisations to offer automatically, because they often have higher financial risk and higher administration charges that fall outside the regulations.”
Mr O’Brien added: “This raises the question about what default funds affinity group employers should choose to use for auto-enrolment purposes – balancing the financial interests of their staff with reputational issues for the employer.”
Wider impact for pensions industry
Experts said this case opened the door for veganism to form part of the pension trustees’ environmental, social and governance considerations, and could have a wider impact on the pensions industry.
Penny Cogher, partner at Irwin Mitchell, said: “Employers will need to take their employees’ views on ethical veganism seriously and ensure that they are not directly or indirectly discriminated against, harassed or victimised for expressing their belief on ethical veganism.”
She added that as veganism becomes even more popular, it will be interesting to see which fund manager first develops a vegan pension fund proposition.
She noted Greggs had announced on Thursday that it will share a £7m bonus between its 25,000 workers, giving them £300 each as a reward for the launch of its successful vegan sausage roll that boosted Gregg’s sales and profits.
“There’s money to be made in veganism, and big business is catching up and embracing this,” she added.
Schemes challenged by personal beliefs
However, Mr O’Brien argued the tribunal’s decision did not really change anything as far as pensions law was concerned.
He said: “In trust-based pension schemes, trustees should still act on ESG issues as financial factors – but issues which are non-financial in nature (such as member ethical views) may only be taken account of in limited circumstances.”