European court rules in favour of former Waterford Crystal workers

Ten former Waterford Crystal workers have won a court battle against the Government over losses in their pensions.

The European Court of Justice ruled that the retirees had been denied protection by the state after the company went bust in 2009 with a gaping hole in its pension fund.

The retirement pot for workers was €110m in deficit.

Actuaries for the workers calculated that they were in line for between 18 and 28% of what had been expected while actuaries for the state said it was more like 16-41%.

Judges at the Luxembourg court ruled that offering retirees half of what they had been promised under a defined benefit scheme does not amount to protection by the state.

It added: “The economic situation of the member state concerned does not constitute an exceptional situation capable of justifying a lower level of protection of the interests of employees as regards their entitlement to old-age benefits under a supplementary occupational pension scheme. ”

The successful case was taken by Thomas Hogan, John Burns, John Dooley, Alfred Ryan, Michael Cunningham, Michael Dooley, Denis Hayes, Marion Walsh, Joan Power and Walter Walsh against the Government.

The workers claimed that their rights were not protected by the state in the event of the insolvency of their employer.

The case was taken on the back of a successful legal challenge by English woman Carol Robins against the British government after a company’s insolvency left her with only 49% of her pension.

Article 8 of European Directive 2008/94 is designed to ensure that workers’ pensions are protected if a company goes bust.

The directive does not examine the reasons why a company went bust or why the pension fund is insolvent.

The Department of Social Protection declined to comment as the case will now go back to the High Court in Dublin to determine how much the workers should be paid in pensions.

Jimmy Kelly, a former Waterford Crystal worker and a regional secretary with the Unite trade union, said there is an onus on the Government to ensure retirees are protected.

“It is regrettable that the state chose to contest what should have been an open and shut case, causing distress and uncertainty for the workers involved and forcing the taxpayer to pick up a substantial legal bill,” he said.

“It should be noted that, at present, workers in the UK are entitled to receive 90% of their accrued pension entitlements in the event of insolvency.”

Mr Kelly said it is a crucial decision for Unite, Waterford Crystal and the union movement as a whole as it affects any worker in an occupational pension scheme.

The 10 workers who took the case were a cross section of those employed at the world renowned crystal factory.

About 1,700 workers are due defined benefit pensions.

On average they were worth €9,600 a year while the ten who took the case, who included some long-serving skilled craft workers, had pensions worth on average €19,000.

Unite said that if the Government contests liability in the courts it could end up costing €258m in a one-off payment to the pension fund. If the state accepts, then it could be about €15m a year.

Walter Cullen, who worked at the crystal factory for 20 years up to 1987 and is a Unite official, said the union will continue to argue that the Government should cover 90% of the pension fund.

“I don’t believe that it is necessary for the Government to waste any more taxpayers’ money pursuing this through the courts,” Mr Cullen said.

“The cost of this to the Government depends on the way they approach it.”