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Unions sue UK government over pensions

UK – Two UK trade unions are suing the UK government on behalf of 1,000 pension scheme members of Allied Steel and Wire (ASW).

Community union ISTC and manufacturing union Amicus today served pensions minister Malcolm Wicks with a writ. They intend to take the government to the European Court of Justice for failure to have properly applied European law to protect workers’ pensions when their employers are declared insolvent.

Around 800 workers of Cardiff-based ASW lost large parts of their pensions when the firm folded last year with its scheme in deficit. ISTC and Amicus claim that the government is liable for the shortfall.

Amicus assistant general secretary Paul Talbot explains: “ASW workers were told that their final salary scheme was secure but now they’ve lost almost everything…. Because the UK government has failed to protect workers’ pensions, as other EU member states have, they have a moral and financial responsibility to compensate these people now.”

The claims are based on Article Eight of the EC directive 80/987 regarding company insolvency. The article, dating back to 1980, requires member states of the European Union to establish a guarantee body to guarantee payment of employees’ outstanding claims, such as pensions, in the case of insolvency.

The Department of Work and Pensions, however, has remained insistent that EU law has not been broken, and refuses to pay compensation.

The case is likely to be heard in the High Court early in 2004 says ISTC, “at which point Council for the unions will request that it be transferred to the European Court for a hearing at the earliest possible date”.

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