FORMER employees of Peter Scott & Co have won compensation for the company’s failure to consult before announcing their redundancies last year.
An employment tribunal in Edinburgh has just announced an award of 90 days pay as compensation for the 117 workers dismissed by the beleaguered firm on May 28.
The claim for the protective award was brought by the Roxburgh CAB on behalf of 65 non-union members, and by GMB on behalf of union members.
At the hearing last month the administrators KPMG contended that there were mitigating circumstances which should reduce any award.
They claimed that a Korean company with whom they were in negotiations had pulled out of the deal which would have saved all the jobs – and that it was the Koreans action which prevented the company from carrying out the consultation.
However, evidence was provided showing that the company had been in financial difficulty for a long time, and that no action had been taken to reduce its costs. They could not have expected a new owner to safeguard all the jobs.
Employment judge Joseph d’ Inverno said: “It was the respondent’s inability to meet its wage bill resulting from its decision to continue trading at a substantial loss over a prolonged period that caused the redundancies, not the withdrawal by the Korean company from the negotiations.
“The company appeared to have risked everything upon the hope that terms could be negotiated that would include the whole workforce being taken on.
“The decision to run such a risk does not amount to mitigating circumstances.”
Since the company is in administration, application for payment will be made to the Redundancy Payment Office (RPO) but their maximum payout is eight weeks’ pay capped at £380 pw.
Patricia Buckley, manager of Roxburgh CAB commented: “We are very pleased that the claim has been successful. We hope it will act as a reminder to all employers that they must consult with their employees and their representatives before announcing any redundancies.
“If employers are unsure as to what they should do in these circumstances, they can always come to the CAB for guidance.”