24 November 2011 #Employment
A controversial ruling by an employment tribunal has seen more than 1000 former employees of Ethel Austin miss out on redundancy pay.
Ethel Austin is a discount fashion chain that went into administration in February 2010, after suffering 2 years of poor trading.
The employment tribunal in Liverpool ruled that only 500 of the 1700 workers made redundant would be compensated because they had not been properly consulted by the administrators MCR. These 500 employees were awarded compensation of 8 weeks pay, which was capped at £380 a week.
The compensation was strictly limited to those employees made redundant from the former head office and distribution centre in Knowsley, Liverpool and the company’s store in Edgware, London. Significantly, the tribunal ruled that MCR had no obligation to consult with workplaces where there were fewer than 20 redundancies being made. This ruled out all of the 186 Ethel Austin stores that were closed, apart from one. The union says it may appeal that judgment.
John Gorle, national officer at the Union of Shop, Distributive and Allied Workers, said: "I`m bitterly disappointed the tribunal limited the scope of the award. The fact that many of our members won`t be compensated just because their store had less than 20 staff is plainly wrong and shows the gaping loophole and injustice of the current legislation.
"1,700 employees were made redundant from the same company for the same reason, so to suggest only 500 of them constituted a collective redundancy is nonsense.
"We are taking further expert legal advice and if we can appeal against the judgment we will do so."