4,000 staff who worked for collapsed firm to get compensation

More than 4,000 workers who lost their jobs when the firm they worked for went into administration are to get compensation.

Wholesaler Palmer & Harvey had debts of more than £700m when it collapsed in November 2017.

The group delivered goods to 90,000 grocery and convenience stores, including Tesco, Sainsbury’s and the Costcutter chain.

At the time of its collapse, the company owed £453m to suppliers, £66m to tobacco companies Imperial Brands and Japan Tobacco and £187m to banks.

Shopworkers union Usdaw represented staff who worked for the retail distribution company and took the case to the courts.

The Manchester Employment Tribunal has granted a protective award because the staff were not properly consulted about their redundancy, as required by law.

Just before Christmas 2017, over 4,000 Palmer Harvey staff were sacked when the company suddenly went into administration.

Paddy Lillis- Usdaw General Secretary says: “Yet again the taxpayer will have to pick up the bill for what is owed to sacked staff because administrators deliberately flouted the law.

“It’s absolutely disgraceful that companies can get away with this sort of tactic in the 21st century.

“The former staff at Palmer & Harvey, have had to wait well over a year for this decision, having already been through the trauma of losing their job and being forced to seek justice through a lengthy tribunal process.

“The company made no attempt to consult or treat staff with dignity and respect as they were immediately removed from their workplace with no notice.

“Not only were the staff treated very badly in the first place, they have suffered a long wait for justice.

“The complete failure of the company to consult with the union when it clearly knew it was in difficulties is reflected in the tribunal’s decision to make a maximum award to the former staff.

“This area of law requires review because it is riddled with injustices for both workers and taxpayers as liability to pay the protective awards when companies are in administration falls to the Government’s insolvency fund.

“The government needs to end the perverse financial incentive for employers and administrators not to comply with legal obligations on collective redundancy consultation.”