THE 1,200 staff who were sacked without warning by failing rail firm Jarvis are to be awarded more than £3m compensation – more than it would have cost to keep the company afloat.
The employees – of which 350 were based in York, 300 in Doncaster and 80 in Leeds – arrived for work on March 31 last year to be told they were unemployed. As a result the company failed to meet its statuary obligation to consult and give notice so the staff will be entitled to eight weeks compensation, capped at £380 per week. As Jarvis is no longer operating, it will be the Government which pays the bill and a tribunal court in Leeds yesterday heard that any staff who were unable to find work and therefore claimed Jobseeker’s Allowance will have that, and any other relevant benefits, docked from their compensation.
The staff all worked for Jarvis Rail, Jarvis Fastline or at the York headquarters, Jarvis PLC.
Union bosses said it was disappointing that a number of workers, particularly those holding management positions, found employment swiftly and would therefore get more compensation than those who have been left jobless. It is also understood that administrators Deloitte went to Network Rail – owners of Britain’s rail infrastructure – to request around £3m to keep the company going and retain staff but this was turned down.
Bill Rawcliffe, of Justice for Jarvis Workers and a member of the RMT Union, said: “This is only the first hurdle and the result is pretty much what was expected because employment legislation clearly states if you do not receive notice you are entitled to claim compensation.
“We think it is a disgrace that the compensation is being paid for by the taxpayer – that money should be paid by Network Rail which owed millions in work that had been already carried out by Jarvis workers.
“What is also difficult to take is compensation will have Jobseeker’s Allowance and other benefits knocked off, but the management who did not have to claim benefits as they went round the revolving door and straight into other jobs will get the whole payout.”
A Network Rail spokesman was unable to comment last night. About half of the organisation’s budget is public money.
Unions claim some workers, who were also based in Glasgow, Newcastle, and Peterborough, were owed money for months before the company closed. Talks between Network Rail and the administrators officially finished in April 2010.
The fallout prompted a number of protest rallies, and Mr Rawcliffe claimed that workers from other parts of the UK have been carrying out the rail engineering work.
Unions were unable to say how many of the 1,200 had now found employment, but Mr Rawcliffe said those they knew of in work were now earning 30 per cent less in wages.
The tribunal yesterday heard that the company had no money at all to pay staff by March last year.
Claims against Jarvis will continue with at least 600 unfair dismissal claims likely to be made. Toni Haynes, of Morrish Solicitors, represented the members of the TSSA union at the tribunal.
“We are obviously pleased with the compensation offer – it is the maximum that we could have asked for,” she said.
“Not all of the staff will receive all of that money, it will depend on their individual circumstances and what they have already received in other benefits.
“But what is clear is that the amount of money to be paid out of the public purse, is more than the £3m the administrators needed in the first place to keep the company afloat and these people in work.”
– Reproduced with kind permission of The Yorkshire Post and Johnston Press