Waterford Crystal pension entitlement case opens

A LEGAL action by 10 former workers with Waterford Crystal against the State over pension entitlements following the insolvency of the company has opened before the Commercial Court.

The case has implications for the pension entitlements of all workers whose employers become insolvent.

Waterford Crystal was placed in receivership in January 2009 and the company’s pension schemes were wound up two months later with a deficit of more than €100 million.

Each plaintiff was later offered a “transfer payment” with the effect all will receive payments representing between 18-30 per cent of their entitlements. The plaintiffs claim that, following a decision of the European Court of Justice (ECJ) in 2007, they are entitled to at least 49 per cent.

A central issue in their action against the Minister for Social Protection is whether the State met its obligations under the European “Insolvency Directive” requiring EU member states to “protect” employees in insolvencies.

Michael Collins SC, for the plaintiffs, said key issues raised in the State’s defence relate to the interpretation of the directive and appear to require a reference to the ECJ for determination.

Counsel said the ECJ had ruled, in the 2007 Robins case, that provisions of UK law guaranteeing benefits on retirement limited to 49 per cent of the employee’s entitlement did not amount to “protection” of employees as required.

In this case, the plaintiffs were likely to receive “very significantly less” than the 49 per cent deemed inadequate in Robins.

The plaintiffs claim measures taken by the State in purported transposition of the directive do not meet the requirements of the directive.

Mr Collins rejected the State’s argument the directive permits the employees’ entitlement to the State pension to be taken into account in assessing whether adequate protection is provided. The plaintiffs were entitled to the State pension, having paid PRSI for many years, he said.