Cable blocks workers’ compensation

Thousands of former Woolworths workers will find out this week if Vince Cable is to deny them a Christmas payout.

The government will go to court this week in an attempt to overturn a legal ruling that entitled thousands of former shop assistants to a share of millions of pounds of compensation dating back five years to when the firm went bust.

Vince Cable’s Business, Innovation and Skills (BIS) department has already committed thousands of pounds to preventing the payout yet this week’s appeal could have been avoided if the department had appeared at the last hearing.

When Woolworths became the most high-profile victim of the economic downturn in November 2008, many staff were sacked with immediate effect.

The law states that where the statutory 90-day consultation period before redundancy is ignored, workers are entitled to compensation for the three months’ pay they’ve missed out on. However, that only applies to organisations with more than 20 employees.

Administrators argued that each shop of less than 20 people was a separate establishment so staff in smaller shops weren’t entitled to anything.

The shopworkers’ union, Usdaw, sued claiming they worked for Woolworths which obviously employed thousands and were therefore entitled to be paid for the 90 days.

An Employee Appeals Tribunal (EAT) found in the workers’ favour, meaning 3,200 former employees were in line for an average payout of around £1,000 from the Government scheme set up to support employees of companies that have gone under.

However, BIS has decided to fight that ruling and, so far, has dedicated more than £30,000 to overturning it.

Labour’s shadow business minister Ian Murray said: “People will find it staggering that Vince Cable is spending tens of thousands of pounds in an attempt to stop hardworking retail workers get the compensation they deserve.”

A spokesman for BIS said: “The Department is appealing the judgment to the Court of Appeal because it thinks that the EAT got the law wrong.”