No compensation for redundant shopworkers

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TOWN staff who were made redundant after the collapse of a clothing firm last year will not receive compensation.

Ten workers at the former Ethel Austin store, in Middleton Grange Shopping Centre, lost their jobs when the firm went into administration in February last year.

The shopworkers union, Usdaw, made a claim on behalf of its members and despite a tribunal awarding compensation worth up to £1.5m to 500 former workers, that does not include former staff at the Hartlepool store.

The tribunal decided that stores which employed less than 20 members of staff were not to be awarded compensation, ruling out all, but one of the 186 Ethel Austin stores nationwide.

Only head office and distribution centre workers will benefit from the pay-out.

It means former workers at the Peterlee store, which was one of the victims of the company’s first fall into administration in 2008 will also not receive any compensation.

Union bosses said they were “bitterly disappointed” that many of their members will not be compensated.

John Gorle, Usdaw national officer, said compensation not being handed out just because stores had less than 20 employees is “plainly wrong and shows the gaping loophole and injustice of the current legislation”.

He added: “Usdaw believe 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 if we can appeal against the judgement we will do so.”

The Ethel Austin store, in Billingham, was taken over by Life and Style, which subsequently fell into administration in June this year.