Staff who worked at 200 Woolworths stores miss out on compensation

Around 3,000 staff who were made redundant from just under 200 Woolworths stores across the country will not receive a share of the payout of up to £67.8 million awarded to other employees due to the small size of the workforce in their branches.

An employment tribunal awarded 60 days’ pay to former Woolworths staff members following the firm’s failure to consult collectively on redundancies when it collapsed in 2008.

However, former employees who worked in the 199 stores with fewer than 20 workers have missed out on protective awards as each store was considered to be a distinct establishment and so did not reach the size necessary under the duty to consult appropriate representatives during collective redundancies.

This will be bitter news for the former staff members of 35 Woolworth stores, such as Bedworth, Dorking and Mill Hill, which were one employee short of being eligible for the payout.

Woolworths had trade union recognition agreements with unions Usdaw and Unite, and a national joint consultation committee (JCC), at the time of its collapse. The unions brought a claim against Woolworths pursuing protective awards for their members and Ms B Wilson, a member of the JCC entered as a co-claimant on behalf of staff who fell outside of the scope of recognition of Usdaw and Unite. Wilson was a staff member at St Ives’ Woolworths in Cornwall, which is one of the stores where former staff will miss out on the payout.

Usdaw, the union of shop, distributive and allied workers, said that it was “bitterly disappointed” that the tribunal had limited the scope of the award.

Usdaw’s officer John Gorle commented: “The fact that some of our members won’t be compensated simply because their store had less than 20 employees is just plain wrong and shows the gaping loophole and injustice of the current legislation. Nearly 30,000 employees were made redundant from Woolworths at the same time and for the same reason, so to suggest 3,000 of them didn’t constitute a collective redundancy is a nonsense.”

The union said that it was “highly likely” that it would appeal against the ruling and confirmed that it is seeking legal advice on the issue.

Woolworths, which has since changed its name to WW Realisation 1, has gone into liquidation. Due to this, the Government’s Insolvency Service will be dealing with the payouts.

A spokesman for the Insolvency Service said that, as the union is yet to decide on an appeal, it would be wrong to comment on the case before the judicial process has run its course.

Read the full details of the employment tribunal’s ruling in the Woolworths case on XpertHR.

The list of Woolworths stores that had fewer than 20 employers can be viewed below: