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12 January 2011: Pensions Ombudsman successful in Judical Review case

 

OFFICE OF THE PENSIONS OMBUDSMAN

JUDICIAL REVIEW JUDGEMENT VINDICATES PENSIONS OMBUDSMAN DECISION IN FAVOUR OF WIDOW

HIGH COURT JUDGE DELIVERS HARSH VIEWS ON CORK BUILDING COMPANY -- "THE MANNER IN WHICH THE APPLICANT (COMPANY) HASCONDUCTED ITSELF THROUGHOUT THIS SORRY SAGA HAS BEEN CHARACTERISED BY FRAUD AND DECEIT".

The High Court today (12 January, 2011) awarded costs to the Pensions Ombudsman following a judgement on Judicial Review proceedings initiated by Star Homes (Middleton) Ltd which upheld a decision by the Pensions Ombudsman directing the company to pay €70,000 to the widow of an employee who had died.

Commenting on the case, Mr Paul Kenny, the Pensions Ombudsman said that he was pleased with the outcome of the legal proceedings taken against him.  "This was the first Judicial Review brought against my Office and while I am naturally pleased with the outcome in that it vindicated my investigative and decision making processes, more importantly it copperfastens the right of a widow to the award I made to her and her two children", he said.

Explaining the background to the complaint, Mr Kenny said that under the terms of a Registered Employment Agreement (REA), all construction companies are required to have construction workers insured for pension and death benefit.  The complainant’s husband was a construction worker employed by Star Homes (Middleton) Ltd and who died as a result of an accident.  When she sought payment of a death benefit from the Construction Workers Pension Scheme, it was discovered that appropriate pension contributions had not been paid by the company in respect of her husband and consequently benefit could not be paid.  However, the terms of the REA provides that the employer becomes liable for the benefit where the appropriate pension cover is not in place.  The Office of the Pensions Ombudsman undertook an investigation, with considerable difficulty, in view of the conflicting evidence being presented by the company.  "There is no need for me to go into the detail of the investigation, as this is set out very succinctly in Mr Justice Hedigan’s judgement.  However, it is quite incredible, to say the least, that the company claimed that the man in question was a subcontractor for a considerable amount of his time with them rather than an employee, and consequently did not have sufficient weeks worked to qualify for death benefit.  They then attempted to pay contributions for those weeks after he had died.  However, Social Welfare records showed that they had classified him as an employee and paid the appropriate PRSI contributions for the full duration of his time with them and I found to this effect in my formal Determination.  While it was also claimed that he had died the day after he had left the company, there were conflicting statements as to the manner of his leaving and serious discrepancies between different versions of the P45 form.  In fact, there was no need for these explanations in the first place, because if the appropriate pension contributions had been paid, the employee would have been covered by insurance for the weekend on which he died regardless of whether he had left the company not", Mr Kenny said.  The various explanations and excuses offered by the employer, when repeated in court, were characterised by the Judge as "fraud and deceit"

When the Determination of the Pensions Ombudsman issued, the company lodged an Appeal in the High Court and subsequently initiated Judicial Review proceedings, on the grounds that an Oral Hearing had not been held as part of the investigation.  The Pensions Ombudsman had ruled that such a hearing was not needed and the High Court found that this decision was well within the bounds of reasonableness, given the circumstances and facts of the investigation.

"While it is precious little compensation for the loss of her husband, at least the death in service benefit due to the lady in question has been confirmed by the High Court" said Mr Kenny.

Kate Colleary, solicitor from Eversheds O’Donnell Sweeney, who represented the Pensions Ombudsman added "It is also important to note that the High Court recognised the right of the Pensions Ombudsman to set his own procedures for resolving disputes. The Courts are usually reluctant to interfere with the decision of an Ombudsman who has the requisite experience and skill in such matters, and have consistently recognised their procedures as being more informal than those of the Courts."

For further information contact Mr. Paul Kenny, Pensions Ombudsman at (01) 647 1650.

A copy of the full High Court judgement is available from a link here in the Press Release on the Pensions Ombudsman website -- www.pensionsombudsman.ie.

12 January 2011.

Ends.