EUROPE – The UK government is not liable for the pensions of the former workers of failed industrial group Allied Steel and Wire, according to a preliminary judgment at the European Court of Justice.

The ASW case had been brought by the Amicus union, which sought recompense for workers who lost their jobs and pensions when the firm went into insolvent liquidation in 2002.

The UK has flaws in its protection for workers who lose their pensions when firms fail but they are not serious enough to mean it is breaking EU law, Advocate General Juliane Kokott said.

She said in her 100-point conclusion today that while Article 8 of the Directive 80/987/EEC on insolvency “in principle” requires full protection of employees’ interests it “does not oblige Member States to guarantee the protection of employees’ interests by means of their own payments”.

The opinions of advocates general are not binding but are followed by the full court in most of its rulings.

"The government believes it has met its obligations under Article 8 of the European Insolvency Directive, as successive governments have done since the directive was implemented," said a spokesman for the Department of Works and Pensions, quoted by Reuters.

Late last month the UK was referred to the ECJ by the European Commission for failing to implement the occupational pension funds directive.