FORMER Wearside shopworkers will not receive a penny from a £1.5million compensation bonanza, union leaders warned today.
Staff lost their jobs at Ethel Austin clothing stores in Sunderland and Washington early last year, after the company went into administration.
Shopworkers’ union Usdaw has won compensation for more than 500 Ethel Austin staff who were made redundant by administrators in February last year.
Usdaw made a claim on behalf of its members for the Protective Award after administrators MCR failed to consult with the union before making 1,700 staff redundant.
A tribunal has now ruled that while staff at the firm’s former head office and distribution centre in Knowsley, Merseyside, and its store in London’s Edgware are due compensation for lack of consultation over the decision to axe their jobs, administrator MCR was not obliged to consult about cuts where fewer than 20 redundancies were being made, ruling out all but one of the 186 Ethel Austin stores that were closed.
The union is now looking into the possibility of launching a legal challenge to the ruling.
National officer John Gorle said: “While the award can never fully compensate for staff losing their jobs, I’m sure our members will welcome the money and appreciate the effort Usdaw has made to secure this compensation for them.
“Cases like these really demonstrate the value of belonging to a trade union.
“However, 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.”
Mr Gorle said 1,700 staff had been made redundant, “from the same company, for the same reason”.
“To suggest only 500 of them constituted a collective redundancy is nonsense,” he added.
The Ethel Austin brand recently returned to the high street, after the purchase of its successor company Life&Style, by Ashloch Limited, and the company’s Chester-le-Street branch is still open.