Patrick Nulty (Dublin West, Labour)
Link to this: Individually | In context | Oireachtas source

Deputy Shortall and I have been tabling this matter for inclusion in a Topical Issue debate for the past three weeks. With all due respect to the Minister of State, Deputy Cannon, it is unacceptable that the Minister for Social Protection has not seen fit to attend the House to debate this crucial issue. It concerns not only the Waterford Crystal workers but also other workers across the economy. Plenty of notice of this matter was given, but it makes a mockery of Topical Issue Matters if the relevant Minister does not attend the House. I wish to put on record the fact that I consider it to be completely unacceptable.

I wish to explain the context of this judgment by the European Court of Justice. Some 1,700 workers in Waterford Crystal were initially impacted when the pension scheme insolvency issue arose. Ten of those brave workers took a case to the European Court of Justice, supported by their trade union, Unite. They did a great service for workers in this country. The previous Fianna Fáil-led Government and the current Government fought those workers every step of the way to stop them getting their rights under the EU insolvency directive of 2008. The State resisted that directive repeatedly.

The Pensions Ombudsman, Mr. Paul Hogan, has said that this judgment has implications for workers across the economy. The Government has known since the Robins case in 2007 that there was a need to act on this issue, but it has completely failed to legislate. The Government has left the workers in limbo, obliging them to go to Europe to vindicate their rights.

It is now clear that under EU law, the State has an absolute obligation to protect the pension entitlements of workers in the event of insolvency. It is my understanding that even since the judgment, the Government has completely failed to engage with those workers or the Unite union. They will now potentially be dragged through the High Court to vindicate their rights.

Will the Government face reality and engage with those workers to reach a settlement to which they are entitled? On a broader question, what is the Government's strategy to deal with the protection of workers' pension rights and entitlements?

Róisín Shortall (Dublin North West, Independent)
Link to this: Individually | In context | Oireachtas source

It is a matter of regret that the Government has failed to address this issue since the European Court of Justice issued its judgment last month. This is a pressing issue that has been around for a number of years. It concerns the workers from Waterford Crystal but also has implications for many other workers in this country who are members of defined benefit schemes.

The workers' legal teams are currently preparing for a return to the Commercial Court. If the matter goes ahead, the court will decide the outcome of the case. It is expected that there is likely to be a determination from the courts that will entail a capital sum as a financial settlement. Such a financial settlement will have significant implications. There has been speculation that it could be in the region of €250 million to €300 million. It would seem to make eminent sense to have an engagement between the Government and the workers in order to make provision for the workers' pension provision and secure it for the future. That could be done by way of staged payments. It is estimated by the workers' actuarial advisers that the payment could be as low as €2.5 million initially, rising to a maximum of about €80 million in 2030. This is about extending that payment period and the Government meeting its commitments by way of staged payments in order to guarantee the pension rights of those workers.

This kind of approach has a lot to recommend it because we do not know what a court ruling is likely to come up with in terms of the Government's commitment and obligations. It has potentially significant, immediate implications for the taxpayer unless the Government seeks to reach some kind of settlement which would not only give security for the workers themselves but would also initially take pressure off the taxpayer's liability. It makes common sense to take that kind of practical approach to resolving this issue. It is regrettable that no action has been taken in this regard up to now.

Ciarán Cannon (Galway East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

On 25 April, the European Court of Justice issued a ruling which contained a number of clarifications regarding the transposition of EU Directive 2008/94/EC which concerns the protection of employees in the event of the insolvency of their employer. This ruling was in response to a July 2011 referral from the High Court regarding proceedings brought by former workers at Waterford Crystal.

In taking the view that interpretation of the provisions of the Directive 2008/94 was necessary for it to give its decision in this case, the High Court had decided to stay the proceedings and to refer a number of questions to the European Court of Justice for a preliminary ruling.

Following that European Court of Justice ruling, the matter will now revert to the High Court for consideration. Given this matter remains before the courts, it would not be appropriate for the Government to comment further on any specific aspects of the case at this point in time.

Patrick Nulty (Dublin West, Labour)
Link to this: Individually | In context | Oireachtas source

I find it astonishing that the Government now intends to drag these workers through the High Court rather than engage with them. They are ready, willing and able to come to a constructive solution which would ensure the rights of workers, as set out by the European Court of Justice, are vindicated while protecting Irish taxpayers by coming up with a practical solution to the challenge we face. The refusal of the Government to engage with the workers really beggars belief and potentially has huge costs for the taxpayer.

We do not know what the High Court will decide but we know workers in these schemes are absolutely protected in terms of their pension entitlements. Surely it would make sense to engage and negotiate with them rather than going through another prolonged and protracted legal process.

On the broader issue of pensions, it is very disappointing that although the Government has made reference many times to the gap in the social insurance fund, it has a strategy of increasing contributions to the social insurance fund for low-paid workers but cutting them for employers, who often have quite lucrative incomes due to lower employers' PRSI. I appeal to the Minister to ask the Cabinet to engage and come up with a solution. A head-in-the-sand approach will not solve the problem and certainly will not ensure the rights and entitlements of those in defined benefit schemes.

Róisín Shortall (Dublin North West, Independent)
Link to this: Individually | In context | Oireachtas source

Initially a proposal was put to the then Government to resolve this issue, which seemed to make a lot of sense at the time, but was rejected by the then Minister for Finance. It is important to point out that the European Court of Justice, ECJ, has found in favour of the workers on all fronts and on the major points that were put before it. That is the backdrop to this. It makes no sense to expose the taxpayer to further liability. On the face of it, it would seem that annual payments represent a much more efficient approach than settling for an unknown capital sum that will be decided by the courts. Annual payments avoid the need to purchase annuities to settle the matter because annuities are a very expensive way of generating pension income for people. Taking that approach would also avoid the additional legal costs involved, which are probably very significant. On behalf of the workers, and the Irish taxpayer, I urge the Minister to enter into discussions on finding a resolution to this issue and not to leave it to the High Court to decide.

Workers in other companies, both solvent and insolvent, deserve to be adequately protected. A solvent employer should be required to stand over the pension commitments it made to workers in the past. Where the employer is insolvent, a safety net is required, as has been implemented in the UK and other jurisdictions. This Government continues to be irresponsible in its failure to legislate in this area.

Ciarán Cannon (Galway East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will undertake to convey the views of both Deputies directly to the Minister, Deputy Burton, but, as I have been advised, because the matter remains before the courts it would be very inappropriate for me to comment any further on the issue.