Former ASW workers poised to sue Government over pensions

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The Independent Online

Community, the union which represents the majority of the 1,200 former Allied Steel and Wire employees who lost most or all of their pensions when the company became insolvent two years ago, is to press ahead with plans to sue the Government, arguing the proposed £400m compensation package is insufficient.

Community, the union which represents the majority of the 1,200 former Allied Steel and Wire employees who lost most or all of their pensions when the company became insolvent two years ago, is to press ahead with plans to sue the Government, arguing the proposed £400m compensation package is insufficient.

The union first filed a writ against the Government last November, subsequently lobbying ministers to provide a compensation package for the 65,000 workers who have lost their pensions over the past few years thanks to insolvencies.

Andrew Smith - the former Work and Pensions Secretary, who resigned from his job this week - gave into demands in May, narrowly staving off a backbench revolt over the issue. However, his proposed "Financial Assistance Scheme" was received with cynicism by unions and other campaigners who argue that more than £1bn is needed to fully compensate the workers.

Following several meetings with ministers over the summer, Community confirmed yesterday that it would push ahead with its proposed legal action, and said it is set to present its case to the High Court between 9 and 11 November. It said it will ask the judge for its case to be referred to the European Court of Justice in Strasbourg.

Michael Leahy, the general secretary of the union, formerly known as the ISTC, said: "Earlier this year, Community and other unions secured the establishment of the FAS... but we never believed that the £400m allocated to the fund was enough and that is why we argued that there should be a review of the fund after three years. However, in the process of discussions with the Government they have made it clear that the review will only cover administrative issues and not the adequacy of the funding. To us, this is unacceptable." Amicus, which joined Community in serving the original writ, is still considering whether or not to proceed with legal action.

A union victory in the European court would be a major blow for the Government, setting a precedent for the remainder of the 65,000 workers who have lost their pensions over the past few years. The Parliamentary Ombudsman, Ann Abraham, is also expected to announce an inquiry into the accuracy of the Government's advice over occupational pension schemes this autumn, following complaints by a consortium led by Ros Altmann, the Government pensions adviser.

If the Ombudsman is sufficiently persuaded that the Government misled workers, it could also force the Government to provide a greater level of compensation. The Department for Work and Pensions refused to comment on any proposed legal action.

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