Dozens of workers who were dismissed as a Dundee textiles company collapsed have won an employment tribunal.
Bonar Yarns, which specialised in yarns used for carpet backing, went into administration in April last year.
The business, which operated from Caldrum Works in St Salvador Street, was then rescued by one of its customers.
American John Newman formed a new company called Newman Bonar, acquiring Bonar Yarns’ assets, including its workers who were transferred under TUPE.
However, just two months later, the company was on the brink of closing again due to unsustainable energy costs in the region of £300,000 a month.
Again, it found a way to continue trading after negotiating better terms with its energy supplier.
But in October, it was confirmed liquidators were appointed for Newman Bonar.
Employment tribunal
The lack of consultation with workers before they were dismissed was at the centre of an employment tribunal.
Unite the Union and more than 40 employees were claimants in the case, which was held in May.
A newly published judgement found almost the entire workforce were sacked without warning on October 25.
It states: “Employees present in the workplace were informed that the respondent would be entering liquidation.
“With the exception of two or three employees, the entire workforce (around 60 employees) were advised that they were dismissed by reason of redundancy with immediate effect.
“This was confirmed by letter dated October 30 2023. The remaining two or three employees, who were retained for the purposes of winding up the business, were dismissed around two months thereafter.”
The tribunal found that Newman Bonar did not undertake any consultation with the trade union of its employees before the dismissals. This is required when more than 20 redundancies take place.
“No elections were arranged and no prior information was provided,” it states.
Newman Bonar was not represented at the virtual hearing.
Employment judge Michelle Sutherland said she had “no reason to doubt the credibility or testimony” of witnesses.
What will workers receive?
The tribunal awarded workers a protective pay award of 90 days’ gross pay.
If a company is insolvent, the Insolvency Service pays the protective award, capped at eight weeks’ pay.
Interpath Ltd is in the process of winding up the business.
The judgement found: “Considering all the circumstances including the respondent’s total default, and in the absence of any mitigating circumstances, it is considered just and equitable to make an award for the full protected period of 90 days.”
The owner of Newman Bonar was asked to comment.
Dating from 1872, Caldrum Works was said to be the world’s first fully integrated, single-storey jute works.
It grew to become the second-largest jute mill in Britain in the 1920s, after Camperdown Works, also in Dundee.
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