The UK government will not have to compensate a group of steelworkers who lost their jobs and pensions when Allied Steel and Wire collapsed, according to a preliminary ruling at the European Court of Justice.
The ASW case has been brought by trade union Amicus which argued that under Article 8 of the Directive 80/987/EEC on insolvency, the government has to guarantee the worker’s pensions. The group went into liquidation in 2002 and around 1,000 former employees who saw their pensions cut are now suing the UK government for compensation.
However, advocate general Juliane Kokott found that while the article does in principle protect employees’ interests, it does not oblige member states to guarantee the protection of employees’ interests by means of their own payments. The opinions of advocate generals are not binding but are usually followed in the court’s ruling.
The unions say some scheme members will receive less than 20% of their expected pensions, despite having made contributions for 30 years or more. Since the high-profile collapse, the government has set up the Pension Protection Fund, designed to pay out in the event that a company cannot honor its pension scheme requirements.