MORE than £350,000 will be handed out to 100-plus former workers of Peter Scott & Co after they won compensation for illegally being made redundant.
An employment tribunal in Edinburgh awarded 90 days’ pay as compensation for the 117 workers dismissed by the Hawick knitwear firm as it went into administration last May.
At the hearing, 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 that 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. A new owner could not have been expected 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.”
Because the company went into administration, application for payment will be made to the Redundancy Payment Office (RPO) but its maximum payout is eight weeks’ pay at up to £380 per week.
Patricia Buckley, manager of Roxburgh CAB said: “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 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.”
Meanwhile, Roxburgh and Berwickshire MSP John Lamont believes Peter Scott is now on “the road to recovery” after news that 20 extra staff will be taken on at the Buccleuch Street factory.
The firm was bought by South Korean-owned company Gloverall last summer.
Mr Lamont said: “Peter Scott has been an important part of the town for well over a century and its downfall last year was a devastating blow to the community and those who lost their jobs.
“I hope that this announcement will allow Peter Scott to continue to build a strong future for the workforce.
“These additional jobs will be a welcome boost to the town at a time when the lack of employment is one of the major issues facing it.”