MALTA - Former employees of Cable and Wireless (C&W) Malta have won a court battle to receive backdated pensions rights from now owners of the firm Go plc, after being promised their entitlement in an government-endorsed agreement in 1975.

The Court of Appeal has now ruled Go plc must set up a non-contributory defined benefit pension scheme by the end of October which pays a maximum of two-thirds final salary to the remaining former employees of C&W, many of whom are now retired.

Peter Borg Costanzi, counsel for the plaintiffs and partner at BCGL Advocates, said despite all of the arguments made by the defendants Go plc, the underlying case was the Maltese government nationalised several companies in 1970s and in this case promised over 100 C&W employees they would receive pension benefits in return of lower wages, yet individuals have never seen any payments since the firms were resold into private hands.

The name and status of the firm has changed several time since 1975, as C&W's Maltese interests were absorbed by TeleMalta in 1975, and were subsequently renamed Maltacom before becoming Go plc in 2007.

TeleMalta became Maltacom in 1997 was part-privatised in 1998 before the government sold its remaining 60% stake and liabilities to a subsidiary of Dubai Holdings in 2006.

Officials at the telecoms parent firm Maltacom have been arguing for some time they were not liable for the payment of associated pensions benefits, said Borg Costanzi.

"In the 70s, the main means of international communication was telegram. When Cable & Wireless was nationalised, this was taken over by a new corporation, TeleMalta, and employees saw a reduction in wages so as quid pro quo they were promised a pension. What the court has said is the 1975 agreement still stands and the company Go is bound to give a pension. Go tried to argue the case was time barred and that the claims were superseded by subsequent collective arrangements. But the main bone of contention was very straightforward," stated Borg Costanzi.

The exact cost to Go plc is unknown given the scheme has to be backdated to 1975, but the development is significant as there are understood to be further pending cases like the C&W/Maltacom judgment, including a potential claim by former Barclays employees against the banking giant HSBC plc.

Their case is understood to have similar complications as the former Barclays International's Malta operation saw a forced nationalisation in 1975 and became MidMed Bank. MidMed Bank was bought by HSBC in 1999.

Go's defence counsel, Mamo TCV, were unavailable for comment at the time of publication.

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