Sacked workers get pounds 6m payout

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Labour Editor

More than 2,000 shipyard workers who were thrown out of work without redundancy payare to share nearly pounds 6m in compensation.

The former employees of Swan Hunter, on Tyneside, will each receive between pounds 450 and pounds 15,000 - depending on length of service - as part of an out- of-court settlement with the receivers, Price Waterhouse.

The City firm originally argued that as receivers they were not liable to pay sums due nder agreements with the previous management.

However, after prolonged negotiations involving the Confederation of Shipbuilding and Engineering Unions, Price Waterhouse agreed a package for the workers who were made redundant over a two-year period.

Tommy Brennan, of the GMB general union, said: "This is a sweet victory, but all we have won is what the workers would have been entitled to if they had been made redundant by the employers rather than the receivers. It has been a long haul caused by the total neglect of workers' rights."

Stefan Cross, of Thompsons, solicitors acting for the unions, said the workers would have to accept the deal by the end of April. "Negotiations have been tough but fair and we are very pleased with the settlement."

The deal was struck in the wake of a House of Lords ruling in 1994 which left receivers and administrators liable to settle claims from workers they had laid off.

Gordon Horsfield, joint receiver, said the level of the settlement realised the worst fears of insolvency practitioners, prompted by the Lords' ruling. The Swan deal covers, severance pay, wages in lieu of notice and payment for a period when workers were laid off during the receivership.

"This settlement almost certainly removes any prospect of dividends being paid to preferential and unsecured creditors." He said the settlementwould have to be accepted by 95 per cent of the redundant workers to become operational.