Irish Government Faces €280m Pension Bill after Court Ruling

(April 25, 2013) – A landmark European court ruling will force the Irish government to provide pension benefits for around 1,500 former employees of Waterford Crystal.

The case – taken by 10 named members of the Unite trade union on behalf of all former employees of the company – argued the Irish government was obliged to protect employees after Wateford Crystal and its pension fund after it went bust in 2009.

Existing pensioners’ money had already been secured, but the remaining workers who lost their jobs when Waterford Crystal shut its doors – as well as those who lost their jobs during previous rounds of redundancies – had been left just 18% to 28% of their pension entitlement.

Unite and the 10 workers representing the other 1,500 affected claimed the government had an obligation to make up the shortfall, citing 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 eight of the 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 European Courts of Justice ruled in favour of the workers, resulting in the issue now returning to the Irish High Court to decide what level of cover the government will have to provide. If full benefits are bestowed, it will cost the government €280 million.

Interestingly, and in bad news for governments in struggling economies, the judges also said the economic situation of Ireland did not provide the government with an excuse to only provide a lower level of protection.

Walter Cullen, who worked at the crystal factory for 20 years up to 1987 and is a Unite official, was reported in the Irish Times as saying the union will push for the government to cover 90% of the pension fund.