A Ministry of Defence contractor could be forced to pay out £1.5 million in compensation following a successful breach of contract claim by former workers of Rosyth Dockyard.
A group of 47 ex-employees of MoD contractor Babcock launched a joint legal claim against the firm after being made redundant in 2019.
An employment tribunal has now found that the firm breached their contracts by failing to correctly calculate their redundancy settlements, with the workers now set to receive between £1,300 and £4,500 in compensation each – a total of almost £128,000.
Trade union Unite, who represented 27 of the claimants, claims all former staff who have been made redundant over the last five years will now be entitled to similar payouts.
Bob MacGregor, Unite industrial officer, said: “On behalf on the twenty-seven Unite members who brought forward this case we are delighted that we’ve achieved a positive resolution on behalf of our members.
“The facts are that Rosyth Dockyard treated workers unfairly and they will now have to pay the costs associated with this botched process.
“The Employment Tribunal ruling affirms that those workers who have left the company and were not part of the claim are also legally entitled to payments because it was a contractual breach.
“Up to 400 workers could benefit from the decision and it could ultimately cost £1.5m.
“The decision highlights the value of trade unions in supporting members and securing just outcomes, but also that employers will be held to account.”
The case, which was a joint claim with GMB Scotland and Prospect trade unions, centred on Babcock’s redundancy policy which provided for an enhanced payment of one day’s pay for every six months of service.
A dispute arose over the correct calculation of a day’s pay, with the unions arguing that it should be based on current daily hours, which would be 9.25 hours per day for a four-day week.
Babcock were arguing that it should be based on 7.4 hours.
The tribunal found that the dockyard had failed to apply a “reasonable, notorious and uniform” method for calculating the enhanced payments and were in breach of contract.
GMB Scotland Organiser Gary Cook said: “This is a welcome judgment that ensures these workers will receive what’s rightly theirs, and for the employer its costly lesson that could very well rise further, serving as a timely example to others that the rights of our members cannot be trampled over.
“The outcome is ultimately one of justice for our members, but it also reaffirms the value of good, campaigning trade unionism as the most effective tool we have to defend and advance the employment rights of ordinary working people.”
A spokesman for Babcock said: “We have been notified by Employment Tribunals (Scotland) that the claims relating to legacy enhanced redundancy payments at Rosyth have been successful.
“We are surprised by this judgement, however we acknowledge it and have since settled these payments with the relevant parties.”