European court to rule on Waterford Crystal pension entitlements

The European Court of Justice will tomorrow issue a decision which could secure €2.6m in pension entitlements for 10 former Waterford Crystal workers — and many millions more for thousands of other Irish workers.

A European Council directive was introduced in 1980 requiring EU states to ensure that the “necessary measures” were taken to protect the old age benefits of employees and former employees in the event of the employer’s insolvency.

However, when Waterford Crystal went into receivership in Jan 2009, its pension schemes were wound up with a deficit of over €100m.

At the time, the 10 plaintiffs at the heart of the European Court of Justice hearing were aged about 65 and ceased working with the company in 2008 and 2009. Given the funding levels in the scheme, each plaintiff was offered payments representing 18% to 30%. However, their British counterparts in Wedgewood had their entitlements secured by Britain’s pension protection fund and received 90% of owed sums.

Initially, the former Waterford Crystal employees pursued a case before the Commercial Court saying the State had failed to meet its obligations under the EU Insolvency Directive to “protect” staff whose employers become insolvent.

At that hearing, Kevin Cardiff, then secretary general of the Department of Finance, said it was not possible for the Government to guarantee either the €13bn actuarial cost of full pension entitlements in insolvency situations or the lesser unspecified cost of paying less than 100% of the entitlements of persons still working at the time of insolvency.

Then in 2012 they took the case against the social protection minister and Attorney General at the European Court of Justice. According to Rachael Liston of Augustus Cullen Law, the action said “Ireland had failed to fully or properly transpose the insolvency directive and a declaration that pursuant to article 8 of the said directive the plaintiffs were entitled to a guarantee of the totality of their pension entitlements, or in the alternative a portion in excess of 49% of their pension entitlements in addition to damages for breach of EU law”.

“This case is relevant not only to former Waterford Crystal workers, but to all workers in defined benefit pension schemes in Ireland,” she said.

“It is imperative that the Irish Government establish a similar pension protection fund to that of the UK in an effort to ensure that adequate insurance is in place in the event of a pension fund becoming insolvent.”