Employees made redundant after Hadden Construction plunged into administration have been awarded compensation after taking the firm to court.
The Perthshire company, which collapsed last year with debts of more than £10 million, failed to consult staff properly about the redundancy process.
They failed to elect employee representatives, and dismissed workers within the statutory 90 day notice period, employment judge Ian McFatridge ruled.
He has awarded more than 20 former Hadden staff renumeration for the 90 days missed wages which were not initially paid as a result.
The 90 day pay award is to be backdated to September 10 2024, when the Aberuthven-based firm collapsed.
A total of 67 jobs were lost after the company collapsed.
Hadden Construction failed to comply with law
Two cases were brought before Judge McFatridge, who ruled against Hadden in both.
Hadden Construction (in administration) was found to have breached section 188 and 188A of the Trade Union and Labour Relations Act.
It states if an employer is proposing to dismiss more than 20 employees, they need to consult staff representatives, which Hadden Construction failed to do.
Hadden Construction did not contest the claims.
Collapse of Hadden left debts of £10m
Administrators Alvarez and Marsal have been working to establish the levels of debt in the business and assets available.
In the past six months, more than £400,000 has been raised – a small fraction of the company’s debts of more than £10m.
Of this, £6.7m is due to unsecured creditors, including around £2m for subcontractors.
The administrators are currently forecasting that the company’s secured creditor, Bank of Scotland, will receive payment in full. It holds a floating charge over the company’s assets.
The bank is owed £541,000 and there were credit balances of around £620,000 when the company collapsed. The administrators are expecting to recover the remaining £79,000.
DM Hall has been instructed to market its Aberuthven headquarters and a property in Croy, North Lanarkshire, for sale.
A spokesperson for Alvarez & Marsal said: “As Administrators, our role has been to proactively engage with and support the process to allow former employees to make claims for funds to which they are entitled.”
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