European Court of Justice likely to clear UK government of failing to protect pensions at failed company Allied Steel and Wire

Former employees of the failed company Allied Steel and Wire (ASW) have suffered a blow in their bid to get compensation for lost pensions.

The advocate general of the European Court of Justice has ruled that the UK government is not breaking EU law by failing to provide compensation.

The court action was brought jointly by the unions Community and Amicus after more than 800 staff in Cardiff – together with hundreds more in Sheerness, in Kent, and Belfast – lost their jobs when ASW folded in July 2002.

Unions had argued that the UK government failed to protect savings.

An EU insolvency directive from the 1980s requires member states to take measures to protect employee pensions.

The advocate general said the breach was not sufficiently serious to trigger the UK’s liability under EU law. The opinion is not binding, but usually gives an indication of the likely outcome of a case.

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A spokesman for the Department for Works and Pensions said the government had done all that was required under EU law.

The ECJ’s final decision is not expected for several months.