Date: 14 July 2010
The shopworkers union Usdaw has warmly welcomed decisions by the Co-operative Group and the East of England Co-operative Society to step in and offer financial support to workers recently made redundant following the collapse of Vergo Retail.
Over 600 Co-op employees
transferred to Vergo Retail in July 2009 when Vergo took over the
running of 17 Co-operative department and home stores in East
Anglia and the South West. However, Vergo subsequently went into
Administration on 7 May this year.
Following representations by
Usdaw, the Boards of both Co-ops have agreed to make ex-gratia
payments to former employees made redundant by Vergo's
Administrator, the amounts being based on workers former
contractual redundancy terms with the Co-op.
Both Co-ops will be writing
to those eligible shortly and cheques are expected to be sent out
by the end of this month.
The total cost to the both
the Co-operative Group and the East of England Co-operative Society
will run to several hundred thousand pounds.
Sharon
Ainsworth, Usdaw National Officer said:
'I am extremely pleased that
the Boards of both Co-ops have responded so positively to our
representations on this issue.
Despite the fact that the
Societies have no legal responsibility for their former employees,
they have taken a brave and not inexpensive decision that reflects
the principles of the Co-op and will be much appreciated by our
members.
While the ex-gratia payments
will obviously be of great assistance to members at this very
difficult time, this unprecedented gesture again highlights the
failure of the law to protect workers in these situations. I also
very much welcome the Co-op's decision to join Usdaw in calling for
the Government to investigate how workers can be better protected
when their employers go into Administration.
At the moment, employees
working for companies that enter Administration have virtually no
rights and Administrators are effectively able to ignore all their
existing legal protections and contractual terms. The interests of
Banks & other financial institutions are put before employees,
many of whom have long and loyal service behind them that suddenly
counts for nothing.
Usdaw will continue to
campaign for a fundamental change in the laws surrounding
liquidations and administration until this injustice is
stopped.'