Court rules out Woolies & Ethel Austin compensation

Thousands of workers at high street stores that went out of business have lost their long-running fight for compensation.

John Hannett says the verdict is a 'kick in the teeth'. Picture: Bill Johnson

The European Court of Justice (ECJ) decision means 3,200 ex-employees of Woolworths and 1,200 former staff at Ethel Austin will not receive any money.

Workers missed out because they were based in stores with fewer than 20 staff, whereas colleagues in larger sites qualified for compensation. Woolworths collapsed in 2008, while clothing chain Ethel Austin went out of business five years ago.

Shop workers’ union Usdaw said members were “heartbroken” by the ruling, with general secretary John Hannett describing the ECJ verdict as a “kick in the teeth” for those who worked in smaller branches.

Hannett added: “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.”

However, the ruling was hailed as a “victory for common sense” by Katja Hall, deputy director-general of the CBI.

She said: “The case has dragged on for nearly two years – and the uncertainty caused has created additional and costly burdens for British businesses. This decision has given certainty to the law and restored consultation to genuine cases of collective redundancy.”

Usdaw won a legal case at the Employment Appeal Tribunal in 2013, but the UK government was granted leave to appeal. The Court of Appeal decided last year to refer the case to the ECJ.

Hall added: “The government was right to heed our advice and appeal the original judgment.”