The European Court of Justice today ruled in
favour of Waterford Crystal workers who took a case against Ireland for the loss
of their pensions when the company collapsed.
The court which sits in Luxembourg found that
under EU law the State had an obligation to protect the pension entitlements of
workers in the event of a company becoming insolvent. The protection is provided
in the 2008 Insolvency Directive. It rejected the Government's claim that the
State contributory pension should be taken into account in assessing how much of
the lost pensions should be made up following the insolvency of Waterford
Crystal and its pension fund in 2009. In May of taht year 2009, a request for a State guarantee on a
€39m loan was rejected by the Irish Government, while the company had debts in
excess of €470m and a significant deficit in its pension fund. Waterford Wedgwood, the parent company, claimed that Government assistance would
be akin to the public bailouts of Northern Rock in Britain, Bear Stearns in the
US and the rescue in the 1980s of Insurance Corporation of Ireland.
Waterford Crystal employed 3,200 people in Ireland, at its high point in the
Glass making in Waterford dates from 1783 and in 1947, Czech immigrant
Charles Bacik, grandfather of Irish Senator Ivana Bacik, opened a glass
works in the city because of the reputation of the original glassware.
In the early 1950s, the operation was acquired by the Irish Glass Bottle
company, which was controlled by the McGrath family who also operated the Irish
When a receiver was appointed in July 2009, 1,500
workers were told they would receive only between 18% and 28% of their full
The court criticised the Government for not
fulfilling obligations which were imposed following the judgement in favour of
an English woman who brought a similar case against the UK in 2007, before the
Insolvency Directive was introduced. On that occasion the court ruled that the
woman, Carol Robins, should have received more than 49% of her pension
entitlements after a double insolvency - - the bankruptcy of a company and its
The judges 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 said the economics situation of Ireland 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 lawyers who represented the Waterford
Wedgwood employees in their case welcomed today’s decision by the European Court
of Justice that the Irish State has an obligation to protect the pension
entitlements of Waterford Wedgwood workers after that company became insolvent.
ByrneWallace represented the Waterford Wedgwood workers in this case.
“This is a case of enormous significance and the outcome represents a very
comprehensive victory for the Waterford Wedgwood employees”, said Gary Byrne of
Byrne Wallace. “The Court found in their favour on all of the major points that
were at issue”.
Byrne referred to the fact that the EU requirement for pension protection has
been in place since 1980 and said : “It is regrettable that it was necessary
to take this case to the European Court of Justice to achieve the protection to
which the Waterford Wedgwood employees are entitled ."
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