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Judges to rule on steel pensions Judges rule on pension schemes
(about 2 hours later)
The European Court of Justice is poised to make a ruling in the case of 1,000 former steelworkers who lost their pensions when their firm folded. Steelworkers who lost out when their final salary pensions collapsed have failed in their bid to force the UK Government to make up the shortfall.
Unions have claimed that the UK government failed to implement an EU law which would have protected workers. European judges said pension rules were "inadequate" but said it was up to British courts to decide if the government had to pay out.
Allied Steel and Wire (ASW) staff in Cardiff and Sheerness, Kent, lost their jobs and most of their pensions when the firm went under in 2002. Around 1,000 Allied Steel and Wire (ASW) workers lost pensions when the company was declared bankrupt in 2002.
The UK government has argued it has done all it was required under EU law. Unions had claimed the government had failed to protect the workers.
The European Court of Justice ruling on their case said: "Member states are not required to finance rights to old-age benefits under supplementary pension schemes themselves in the event of the employer's insolvency."
However, it is reported that the case will now go back to the High Court, which may rule that people who have lost out should be compensated.
European judges
ASW staff in Cardiff and Sheerness in Kent, lost their jobs and most of their pensions when the firm went under.
The UK Government argued it has done all it was required under EU law.
An EU insolvency directive from 1980 requires member states to take measures to protect employees' pensions.An EU insolvency directive from 1980 requires member states to take measures to protect employees' pensions.
The case was referred to the European judges, who sit in Luxembourg, by the UK's High Court in November 2004.The case was referred to the European judges, who sit in Luxembourg, by the UK's High Court in November 2004.
Last year, the advocate general - who advises the court's judges - said although the UK had flaws in its protection for workers who lost pensions, the breach was not serious enough to trigger the government's liability under EU law.Last year, the advocate general - who advises the court's judges - said although the UK had flaws in its protection for workers who lost pensions, the breach was not serious enough to trigger the government's liability under EU law.
Unions representing the ASW workers say the case has implications for about 125,000 people across the UK who lost pensions following bankruptcy. Unions representing the ASW workers said the case has implications for about 125,000 people across the UK who lost pensions following bankruptcy.
Victims of insolvency
If the outcome is successful, the case will return to the High Court, which would decide if the breaches are significant enough to make the government pay full compensation to victims of insolvency before 2005.
Ex-ASW workers in Luxembourg in 2006 for an earlier hearing
The court action was brought jointly by the unions Community and Amicus.The court action was brought jointly by the unions Community and Amicus.
The pension loss emerged after ASW folded in July 2002, with the loss of 800 jobs in Cardiff and 200 in Sheerness. The former steelworkers' plight led the UK Government to set up a £400m Financial Assistance Scheme to protect pension rights when a firm goes bust.
The former steelworkers' plight led the UK government to set up a £400m Financial Assistance Scheme to protect pension rights when a firm goes bust.
This was included in a new pensions bill, published in 2004, but there was disappointment that the legislation was not retrospective.This was included in a new pensions bill, published in 2004, but there was disappointment that the legislation was not retrospective.
A spokesman for the Department of Works and Pensions last year said that the advocate general found "that the facts of the case would not warrant payment of damages."
But he added that the department "await the court's judgement".