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Ex-workers 'heartbroken' by defeat

Published 30/04/2015

Only staff at larger branches of Woolworths qualified for compensation
Only staff at larger branches of Woolworths qualified for compensation

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.

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.

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.

"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.

One former Woolworths worker said the decision was "devastating."

Barbara Wilson, who worked in the firm's store in St Ives, Cornwall, told the Press Association: "It is totally bizarre that just because I worked in a store which employed 19 people I should be treated differently.

"We did exactly the same job and everything was run at a national level - it just doesn't make any sense.

"The decision is just so disappointing. There will be a lot of very upset people around today."

Ms Wilson, who worked in the store for 23 years, said she hoped the case would raise awareness of the campaign to change the law.

Katja Hall, the CBI's deputy director general, said: "This is a victory for common sense and will be welcomed by firms right across the UK.

"The case has dragged on for nearly two years and the uncertainty caused has created additional and costly burdens for British businesses. This decision has given certainty to the law and restored consultation to genuine cases of collective redundancy.

"The Government was right to heed our advice and appeal the original judgment."

Chuka Umunna, shadow business secretary, said: "It is grossly unfair that when these businesses went under, some employees got the lifeline of compensation on losing their jobs, whilst others did not.

"The fact that ministers were not only happy to watch this unfairness happen but at the European Court of Justice acted to stop the employees being compensated in this situation is scandalous and tells you all you need to know about their attitude to people's rights at work.

"If elected on May 7, it will be left to the next Labour government to change the law to address this."

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