Waterford: pension case expected to go to European Court

About 1,800 former Waterford Crystal workers, who are suing the Government for failing to provide pension protection, expect their case to go to the European Court of Justice (ECJ).
The workers, led …

About 1,800 former Waterford Crystal workers, who are suing the Government for failing to provide pension protection, expect their case to go to the European Court of Justice (ECJ). The workers, led by trade union Unite, are taking legal action against the Government because they have been left with no pensions as a result of the company“s closure and the fact that their retirement schemes are insolvent. They claim that European law obliges the Government to provide protection for workers if both employers and pension schemes become insolvent. According to Unite official, Jimmy Kelly, the case will go before the High Court, but is also expected to go to the ECJ, since the union“s argument revolves around European law. The outcome of the case could oblige the Government to set up a protection fund for private sector pension schemes and, if won by the union, will have implications for workers who find themselves in the same situation in the future. In October 2008, the Waterford Wedgwood plc pension schemes had a deficit of EUR 111 million, while assets in the schemes EUR 120 million, far short of total liabilities. A receiver was appointed by the group“s banks in January 2009, and most of its businesses, except the Waterford Crystal manufacturing plant, were sold to US investment fund KPS, which is not obliged to take on any of the plc“s liabilities. This resulted in the closure of the pension fund, which would, however, continue to pay retired workers who are drawing benefits from it. However, workers who have not reached 65 years of age and who lost their jobs as a result of the closure, will now get nothing from the pension scheme, even if they had been contributing to it for up to 20 years. Workers at British Wedgwood were not affected as Britain has a state pension protection scheme. Unite“s case is based on Article 8 of the European treaties, which states that member states must take necessary measures to protect the interests of employees and pensioners in situations where both employers and their pension schemes are insolvent and must be in addition to states“ social security systems. According to Kelly, in a 2007 case – Robins – the ECJ ruled that a British scheme which provided up to 49% of pension benefits was not adequate. The British government argued against this and lost, while the Irish Government supported its British counterpart. Kelly said that the Republic“s Government was therefore aware of its responsibilities but did not act on them, with the result that Waterford workers lost out. The Irish Congress of Trade Unions (Ictu) raised the issue of pension protection with the Government during the failed partnerships previously in 2009. The general secretary of Ictu“s, David Begg, has also held talks with senior officials from the departments of the Taoiseach and Finance.