Date: 20 January 2012
The shopworkers Union Usdaw has won compensation worth up to a massive £67.8 million for over 24,000 former employees of Woolworths made redundant when the firm collapsed at the end of 2008.
The iconic high street retailer went into
administration on 27 November 2008 and by early January 2009 the
administrators had closed all of Woolworths stores, offices and
distribution centres and made nearly 30,000 people redundant in the
process.
Usdaw made a claim on behalf of its members
for a Protective Award after the administrators failed in their
legal duty to consult with the union before making redundancies.
After many months of legal wrangling, the Employment Tribunal
finally heard the case involving members employed in England,
Scotland and Wales in late November 2011.
In a judgement released today, the Employment
Tribunal in London found that the administrators had failed in
their legal obligations to consult with Usdaw and awarded its
members compensation of 60 days pay, capped at £330 a week, the
maximum payable in these circumstances.
Unfortunately, as occurred in a similar case
involving former employees of Ethel Austin, the compensation award
excludes all former employees who happened to work in smaller
stores where fewer than 20 redundancies were made. This means
around 3,000 employees who worked in around 180 of the 814 stores
covered by today’s judgement may never receive compensation.
Usdaw has already made a separate and
successful claim for its members formerly employed by Woolworths in
Northern Ireland. As no employees in Northern Ireland worked in
stores with less than 20 staff, all former employees received
compensation of 60 days pay.
John Gorle, Usdaw National
Officer said:
“While the award is never going to fully
compensate people for losing their jobs, I’m sure our members will
welcome the money and appreciate the effort Usdaw has made to
secure the compensation for them. Cases like this once again
demonstrate the immense value of belonging to a trade union.”
“However, I’m once again bitterly disappointed
that a Tribunal has limited the scope of the award. The fact that
some of our members won’t be compensated simply because their store
had less than 20 employees is just plain wrong and shows the gaping
loophole and injustice of the current legislation. Nearly 30,000
employees were made redundant from Woolworths at the same time and
for the same reason, so to suggest 3,000 of them didn’t constitute
a collective redundancy is a nonsense.”
John Hannett, Usdaw General
Secretary added:
“My delight at the award for the vast majority
of our members is tempered by the clear injustice that workers in
smaller stores could miss out.”
“Usdaw thinks that the UK's current
interpretation of the law on collective redundancies is both unfair
and possibly a breach of the European Directive which seeks to
protect workers in large scale redundancy situations.”
“We are taking further expert legal advice and
it is highly likely we will appeal against this part of the
judgment.”
Notes for Editors:
- An employer proposing to make collective
redundancies is required to consult in advance with representatives
of the affected employees and the consultation must be completed
before any notices of dismissal are issued. A complaint of failure
to consult may be made to an employment tribunal and if upheld, the
tribunal can make a protective award. The obligation to consult is
currently limited in UK law to situations where 20 or more
employees are to be made redundant at one establishment within a
90-day period.
- As Woolworths was in administration at the
time of the redundancies, responsibility for the compensation
payments rests with the taxpayer, through the government’s
Redundancy Payments Office (RPO). The RPO will write to all former
Woolworths employees entitled to receive compensation, enclosing a
form that will need to be completed and returned to the RPO before
they can process payment. As a result, and because this is the
largest insolvency the RPO has ever had to deal with, it is likely
to be several weeks before members receive their compensation.
- Usdaw (the Union of Shop, Distributive and
Allied Workers) is the UK’s fourth biggest and fastest growing
trade union with over 410,000 members. Membership has increased by
more than 17% in the last five years and by nearly a third in the
last decade. Most Usdaw members work in the retail sector, but the
union also has many members in transport, distribution, food
manufacturing, chemicals and other trades.