Redundancy pay ruling may close magazine

THE New Statesman magazine was facing a financial crisis last night after a court ruling that it wrongly made two of its employees redundant.

The costs faced by the publication for failing to adequately compensate Caroline Heler, its picture editor, and Sally Townsend, its arts editor, when it made them redundant in 1990 are estimated at between pounds 15,000 and pounds 20,000. Duncan Campbell, the chairman of National Publishing, New Statesman's owner, said that was enough to bring the magazine to its knees.

Judge Anthony Thompson, sitting at Wood Green county court, north London, said Ms Heler, 39, and Ms Townsend, 37, were made redundant in December 1990 when the publication was in 'dire trouble and staff were making great personal sacrifices'.

Ms Heler, who was on maternity leave, was paid pounds 5,905, the equivalent of four months' pay. But, under a house agreement she claimed she was entitled to a further pounds 11,800 in redundancy money and maternity pay. Ms Townsend was paid pounds 3,697 in lieu of notice but claimed a further three months' pay.

Announcing his judgment, Judge Thompson said that Duncan Campbell, who presented the company's defence, had said the women were offered redundancy and had the option to refuse. They accepted their redundancy cheques and cashed them, he said.

But Judge Thompson said there was nothing in the communications with the women that suggested they could reject redundancy or that the payments they received from the magazine were 'full and final'. He said a clause in their contracts of employment that said the generous house agreement settlements were bound only in honour and not in law was, in fact, legally binding.

Mr Campbell said staff had been told at a number of meetings that only basic redundancy payments of three months in lieu could be paid and staff, and the National Union of Journalists (NUJ), had agreed. Despite this, Judge Thompson's ruling meant that the house agreement could be legally enforced.

After the hearing, each side blamed the other for the situation.

Ms Heler said New Statesman, known for its progressive socialism, had behaved like a 'bullying, right-wing company'.

Mr Campbell said the women, supported by the NUJ, were 'gold digging' to the detriment of the remaining 17 employees at the magazine. 'We are operating on a pounds 300,000 deficit and our liabilities outweigh our assets,' he said. 'Our circulation is up and we are operating just about in profit. But if we have to pay this money in one sum, we will either have to make other people redundant or close down. We can't afford it.'

He said he believed he had been let down by the union. 'If the NUJ wants to put a company run by its members for its members out of business, then it can do it by pressing for this settlement immediately,' he said.