Waterford Crystal pension deal to go to Cabinet

The Cabinet is expected to consider proposals on Tuesday for a pension deal for former workers at Waterford Crystal.

The proposed deal, drawn up by Labour Relations Commission head Kieran Mulvey, is expected to involve a lump sum payment of about €1,000 per year of service in addition to a new structured pension payment for the former staff of the company.

About 1,770 workers and former workers of the crystal glass manufacturer were left with very little from the pension fund when both the company and its fund were wound up in 2009 – a so -called double insolvency.

Those who were already receiving pensions at that stage were protected.

Legal action

In 2010, a number of the workers at the company took a legal action against the Minister for Social Protection, backed by their trade union, Unite.

This case initially went before the Commercial Court, which referred the matter to the European Court of Justice .

In a ruling in 2012, the Luxembourg-based European Court of Justice ruled that the State was in serious breach of the EU insolvency directive – a key piece of EU legislation which protects employees in the event of employer insolvency. In particular, the court ruled that Ireland had failed to implement article 8 of the directive, which states that countries are obliged to protect the interests of employees and former employees with respect to the protection of their pension entitlements, in the event that their employer becomes insolvent.

While the ruling in 2012 said that the Government had not adequately protected the pension scheme of the Waterford Crystal workers, it left the exact level of protection to be decided by the High Court in Dublin.

In a previous case involving the UK, the European Court of Justice had ruled that a scheme offering 49 per cent protection was insufficient.

A subsequent scheme introduced in the UK offered 90 per cent protection .

Protection of 50%

Legislation introduced by the Government last year – after the Waterford case in the European Court of Justice – set the level of pension protection in the future at 50 per cent.

The Waterford case is scheduled to go back to the High Court in January.

The Labour Relations Commission usually only deals with disputes between employers and employees. However it is understood that Mr Mulvey was asked by the Government and the trade union movement earlier this year to become involved in a talks process on the issue.

Mediation process

In a statement, the

Department of Social Protection

said: “The mediation process in the Waterford Crystal case is ongoing, progress is being made with a view to a settlement and the department will announce details of any such settlement once final agreement has been reached and Government approval secured.”

Highly placed sources said that while Mr Mulvey’s recommendations on dealing with the Waterford Crystal pension issues were expected to be discussed by the Cabinet on Tuesday, it was not clear as to whether a decision would be made on the issue this week.