Woolworths and Ethel Austin staff lose battle for compensation over redundancy
THOUSANDS of staff made redundant following the collapse of retailers Woolworths and Ethel Austin have lost a fight for back pay, following a ruling yesterday by the European Court of Justice.
Woolworths employed more than 27,000 people when it fell into administration in 2008 after struggling with £385m of debts, while retailer Ethel Austin collapsed two years later with 1,700 job losses.
The majority of the retailers’ staff received around 90 days of back pay.
But 3,233 ex-Woolworths employees and 1,200 Ethel Austin staff were left empty-handed because UK law does not to require firms to consult workers at “establishments” with fewer than 20 people.
Shopworkers’ union Usdaw had been fighting for compensation on the grounds that these workers belonged to a wider “establishment” of more than 20 people.
The European Court of Justice ruled each store “an establishment”.
Usdaw’s general secretary said: “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.”
Employment lawyers Pinsent Masons said: “The decision will be especially welcomed by multi-site companies such as retailers, who would have been particularly at risk from significant additional costs and burdensome red tape if the duty to consult was confirmed for small scale restructuring across several sites.”