Ex-Alloa Woolworths staff miss out on share of £67.8m pay-out

Published 26 Jan 2012 08:00 0 Comments

FORMER Woolworths staff in Alloa could lose out on pay-outs despite the shopworkers union Usdaw winning compensation worth up to £67.8 million.

for thousands of former employees made redundant when the firm collapsed at the end of 2008.

An employment tribunal has ruled they are not entitled to compensation - simply because they didn't work in a bigger store.

The iconic high street retailer went into administration in 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, an Employment Tribunal in London finally heard the case involving members employed in England, Scotland and Wales in late November 2011. Last week it ruled 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.

But the compensation award excludes all former employees who happened to work in smaller stores where fewer than 20 redundancies were made. When the Mill Street store closed on 29 December 2008, 19 employees were made redundant.

John Gorle, Usdaw National Officer, said, "I'm 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.

"To suggest 3000 of them didn't constitute a collective redundancy is a nonsense."

The former Alloa store staff are among around 3000 employees who worked in 180 of the 814 Woolworths outlets covered by the judgement who may never receive compensation. A number of the staff in Alloa had worked at the store for over 10 years, while one employee had 18 years' service with Woolworths in the town.

John Hannett, Usdaw General Secretary, said, "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."

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This article appeared in Alloa & Hillfoots Advertiser 25 Jan 12

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