High Street workers lose compensation battle

Ethel AustinEthel Austin
Ethel Austin
THOUSANDS of workers at high street stores which went out of business have lost a long battle for compensation.

A decision by the European Court of Justice (ECJ) means that 3,200 ex-employees of Woolworths and 1,200 former staff at Ethel Austin will not receive any money.

The workers missed out because they were based in stores employing fewer than 20 staff, whereas their colleagues in larger sites qualified for compensation.

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Their union said they were “heartbroken” by an ECJ ruling today that what happened to them was valid.

Shopworkers’ union Usdaw has been fighting for compensation since Woolworths collapsed in 2008, while clothing chain Ethel Austin went out of business five years ago.

Under UK law, workers in smaller stores are excluded from an obligation to consult over redundancies and do not qualify for compensation.

Usdaw’s campaign suffered a setback earlier this year when the ECJ’s advocate general rejected the union’s case.

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Usdaw general secretary John Hannett said: “This decision marks the end of the road for our members from Woolworths and Ethel Austin seeking justice and they are heartbroken by today’s verdict.

“Our case is morally and logically robust, so today’s verdict is a kick in the teeth. It is unfair and makes no sense that workers in stores of less than 20 employees were denied compensation, whereas their colleagues in larger stores did qualify for the award.

“These were mass redundancy situations where one central decision was made to close the whole company down, with no individual analysis of the viability of each store on a case-by-case basis.”

Mr Hannett said questions should be asked about the conduct of Government ministers, whom he accused of “siding” with administrators against low-paid workers.

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“We can now only pin our hopes on the election of a Labour government to prevent this happening again to other workers in small stores who are made redundant without proper consultation.

“Only Labour has pledged legislation so that in large-scale redundancy situations, workers from all workplaces affected will be treated as part of the same consultation.”

Usdaw won compensation worth tens of millions of pounds for 25,000 former employees of both companies in January 2012.

But 4,400 workers based in stores with fewer than 20 staff did not receive any compensation, based on an interpretation of UK law.

The union won a legal case at the Employment Appeal Tribunal in 2013, but the Government was granted leave to appeal.

The Court of Appeal decided last year to refer the case to the ECJ.