Judicial Review - Court Upholds Decision of Pensions Ombudsman

Author:Ms Kate Colleary
Profession:Eversheds O'Donnell Sweeney

A construction company that failed to pay contributions to a pension scheme is held liable to pay full death benefit to a widow. Judicial review upholds decision of the Pensions Ombudsman.

The High Court today awarded costs to the Pensions Ombudsman in judicial review proceedings and upheld a decision by the Pensions Ombudsman directing Star Homes (Middleton) Ltd to pay €70,000 to the widow of an employee who had died.

This was the first judicial review brought against the Office of the Pensions Ombudsman. It was an important victory in that the Court supported the investigative and decision making processes used by the Ombudsman. It was also an example of yet another instance where a construction company failed to pay full contributions under the mandatory Construction Workers Pension Scheme (CWPS). This case serves as a stark reminder that companies may be required to pay the full amount of death benefit to the estate of deceased employees if they fail to pay the relevant contributions.

Background to the complaint

Under the terms of a Registered Employment Agreement (REA), all construction companies are required to pay insurance premiums for construction workers insuring them for pension and death benefit. The complainant's husband was a construction worker employed by Star Homes (Middleton) Ltd (the "Company") 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 for her husband and consequently benefit could not be paid. However, the terms of the REA provide that the employer becomes liable for the benefit where the appropriate pension cover is not in place. The Office of the Pensions Ombudsman investigated at the request of the complainant. The Company claimed that the complainant's husband was a subcontractor with them for a considerable amount of time rather than an employee, and consequently did not have a sufficient number of weeks worked to qualify for death benefit. However, social welfare records obtained by the Pensions Ombudsman during his investigation showed that he had been classified as an employee and that the Company had paid PRSI contributions on behalf of the deceased at the employee rate for the full duration of his employment. The various explanations and excuses offered by the Company, when repeated in Court, were dismissed by the Judge.

Court Judgment


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