More than 200 former Stewart Milne Group workers have been awarded compensation after being made redundant without consultation.
The former employees were granted a payout worth a combined £1m, according to Thompsons Solicitors.
The Aberdeen-headquartered housebuilder and developer went under in January last year after attempts to sell the business failed.
Chair and founder Stewart Milne, a former chair of Aberdeen Football Club, said at the time that he was devastated by the “totally unexpected outcome” of the sale process and the impact it would have on staff.
Thompsons Solicitors employment lawyer Paul Kissen, who represented the former employees, told Construction News: “There’s a duty on employers […] In this case, they should have started consultation at least 45 days before they started making redundancies. That didn’t happen and everyone was dismissed pretty much immediately.”
He said workers had told him they were relieved about the payouts – worth eight weeks’ pay capped at £700. Totals are reduced for anyone who claimed benefits such as Jobseeker’s Allowance in the two months after the firm folded.
The Unite union held meetings in Aberdeen and Dundee to give former workers information about the claim, Kissen said. Legally, claims need to be lodged within three months of a redundancy.
The protective award relates to former employees of the Stewart Milne businesses in Scotland only and does not apply to its English arm, Stewart Milne Homes North West England (Developments) Ltd.
The case is the latest in a long line of similar actions regarding defunct contractors in recent years, including one in January 2021 against industry giant Carillion, which went under in January 2018.
Cash payouts in such cases are issued by the taxpayer-funded Redundancy Payments Service rather than taken from the assets of the failed company.
Founded in 1975, Stewart Milne Group collapsed after repeated attempts to sell the business, ahead of chair and founder Stewart Milne’s planned retirement.
In its most recent accounts for the year ending 31 October 2022, the group employed a monthly average of 486 staff. At the time of their appointment, administrators from Teneo said 217 of the group’s 329 employees had been made redundant.
The £170m-turnover company owed Bank of Scotland £107.9m when it went under, with administrators not expecting the bank to be paid the full sum owed.
Unsecured creditors have claimed £36.4m but are not expected to receive anything.
Teneo has been approached for comment on the protective award.