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25/01/2007
European Court of Justice judgement could secure compensation
A judgement by the European Court of Justice (ECJ) could mean that thousands of people who lost their pensions when their employers went into liquidation have moved a step closer to securing compensation.
Under the ECJ judgement the government could be forced to pay compensation to tens of thousands of pension scheme members who lost benefits in the past when their employer became insolvent.
In its judgement, the ECJ ruled that under EU law the government had "considerable latitude" when determining the level of protection of pension benefits in the case of a company becoming insolvent.
The case has been brought by unions representing former employees at Allied Steel and Wire (ASW) and United Engineering Forgings (UEF). Both shut in 2002 with staff losing their pensions as a result.
The case has wide implications for an estimated 125,000 workers who have lost their pensions, when their companies went bust.
In a statement the ECJ said: "The court finds that the (EU) directive does not oblige the member states themselves to fund the rights to old age benefits."
It will not be up to the High Court in London to make the final ruling on the case.
The Amicus trade union, which is a party in the case, said it was "confident" of persuading the High Court in London that compensation was due.
In 2006, the government rejected a call by the Parliamentary Ombudsman for people who had lost their pensions to be compensated.
(DS/SP)
Under the ECJ judgement the government could be forced to pay compensation to tens of thousands of pension scheme members who lost benefits in the past when their employer became insolvent.
In its judgement, the ECJ ruled that under EU law the government had "considerable latitude" when determining the level of protection of pension benefits in the case of a company becoming insolvent.
The case has been brought by unions representing former employees at Allied Steel and Wire (ASW) and United Engineering Forgings (UEF). Both shut in 2002 with staff losing their pensions as a result.
The case has wide implications for an estimated 125,000 workers who have lost their pensions, when their companies went bust.
In a statement the ECJ said: "The court finds that the (EU) directive does not oblige the member states themselves to fund the rights to old age benefits."
It will not be up to the High Court in London to make the final ruling on the case.
The Amicus trade union, which is a party in the case, said it was "confident" of persuading the High Court in London that compensation was due.
In 2006, the government rejected a call by the Parliamentary Ombudsman for people who had lost their pensions to be compensated.
(DS/SP)
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