Ayrshire, England, August 25, 2006--A defunct carpet firm belonging to controversial Aberdeen millionaire Ian Suttie has been ordered to pay out GBP160,000 to its former workers, according to the Aberdeen Press and Journal.
An industrial tribunal found Ayrshire-based First Textile Flooring had failed to adequately consult 38 workers in advance of their redundancies when the firm went into administration and closed down on July 14 last year.
The workforce at the Cumnock factory found out one week into their summer holidays that the business was closing, and many returned from their summer break to find they had no jobs.
The workers, members of the Scottish Carpet Workers Union, took their claim to an employment tribunal and were yesterday awarded 90 days' compensation--with individuals receiving between GBP2,500 and GBP10,700.
Union secretary Peter Bell had been a machine operator with First Textile Flooring for 35 years until July last year.
He told the tribunal he received a phone call on July 14 from a firm of chartered accountants, advising him that an administrator had been appointed and that the factory would be closing down at 5pm that day.
Bell said he had received a letter on July 15 advising him that First Textile Flooring had ceased trading on July 14. Bell said there had been no prior consultation with him or anyone else prior to the shutdown.
Tribunal chairman Stuart Watt ruled that all 38 workers were entitled to a protective award under the Trade Union & Labour Relations (Consolidation) Act 1992.
"In this case, the tribunal are satisfied that the respondents made no attempt whatsoever to comply with their statutory duty to consult," said Watt.
"A protective award is effectively a punitive award and its purpose is to impose an effective sanction for an employer's failure to observe the statutory duty to consult.
"In this case, the tribunal found the failure on the part of the employer to consult was 'extremely serious'." The tribunal ordered First Textile Flooring, of 12 Carden Place, Aberdeen, to pay each of the workers, the majority of them men, the maximum 90 days' pay, ranging from GBP2,582 to GBP10,710, a total of more than GBP161,000.
The awards will likely be paid by the Government, which is to say the taxpayer.
Suttie acquired First Textile Flooring, originally known as Kingsmead, through a management buyout in October, 2003, in an effort to resolve cash-flow problems at textile manufacturer Richards of Aberdeen.
Michael Reid, of Meston Reid, the firm handling the administration, said the company is now in the final stages of being wound up.
"As administrator, it's entirely expected because that is what the law provides, it's simply just the due process." Oil tycoon Suttie is joint 44th in the latest Sunday Times rich list, with wealth estimated at GBP85million, mostly built up from his oil-industry activities.
Last November, he was cleared of defrauding the tax authorities, but told he was "irresponsible" in not checking his bank statements.
Aberdeen Sheriff Douglas Cusine found him not guilty on four charges of deliberately trying to cheat the taxman out of GBP21,000 by failing to declare more than GBP179,000 he had earned as interest on a personal bank account over four years.
He also hit the headlines in November 2004, when Richards collapsed. The 196 people the firm had employed learned it was going under only when they turned up for work.
Suttie, who had rescued Richards from receivership just two years earlier, was understood to have spent more than GBP 10million of his own money on the business.
His company, First Construction, is currently waiting to hear if it will get planning permission to build an urban village on the site of the former textiles factory.
