Taxpayers To Fund £67m Woolworths Compensation

Taxpayers are to foot the £67m wage compensation bill for more than 24,000 former Woolworths employees made redundant in 2008.

Shopworkers union Usdaw won the huge sum after claiming on behalf of its members for a Protective Award, arguing administrators Deloitte had failed in their legal duty to consult with the union before making redundancies.

But because Woolworths no longer exists, the former employees will be compensated from National Insurance money, funded by working people.

The iconic high street retailer went into administration on November 27, 2008.

By early January 2009, the administrators had closed all of Woolworths' stores, offices and distribution centres, making nearly 30,000 people redundant.

The Employment Tribunal in London has found in favour of the union and awarded its members compensation of 60 days' pay, capped at £330 a week, the maximum payable in the circumstances.

John Gorle, Usdaw national officer, said: "While the award is never going to fully compensate people for losing their jobs, I'm sure our members will welcome the money and appreciate the effort Usdaw has made to secure the compensation for them.

"Cases like this once again demonstrate the immense value of belonging to a trade union."

However, former employees who worked in smaller stores where fewer than 20 redundancies were made are excluded from the compensation award.

This means around 3,000 people who worked in around 180 of the 814 stores may never receive compensation, Usdaw said.

Mr Gorle called their exclusion "just plain wrong", adding it shows "the gaping loophole and injustice of the current legislation".

Usdaw general secretary John Hannett said the union will likely appeal this part of the judgment.

"My delight at the award for the vast majority of our members is tempered by the clear injustice that workers in smaller stores could miss out," he added.