Former Woolworths and Ethel Austin workers have lost their redundancy case after the European Court ruled they will not be included in the protective awards against both companies.

The European Court ruled that workers in stores of less than 20 employees will not be entitled to compensation due to redundancy.

In January 2012 Usdaw won compensation worth tens of millions of pounds for 25,000 former employees of both companies. However, around 1,200 former employees of Ethel Austin and 3,200 former employees of Woolworths were denied compensation because they worked in stores with fewer than 20 staff.

The decision to deny compensation to workers in small shops was based on the interpretation of UK law which has caused outrage among former employees, customers, politicians and sections of the media.

John Hannett – Usdaw general secretary says:

“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.”

This ruling means that employers are allowed to calculate the number of redundancies they are proposing to make within each establishment. So for employers with multiple sites, one establishment may not be the whole business.

Usdaw is now focusing its attention on a change in the law to try and prevent future redundant workers suffering the same injustice.

Hannett adds:

“There has to be questions asked about the conduct of Government Ministers – having sided with administrators, who acted illegally, against the best interests of hard-working, loyal and low-paid staff, by pursuing this case to the highest available court. They could have simply accepted the decision of the Employment Appeal Tribunal and justice would have been served.

“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, in line with the EAT decision on Woolworths and Ethel Austin.’


Title image credit: Martin Pettitt