Council faces £1.7m pay out

Middlesbrough Council say public services could suffer

A local authority has been told it must pay compensation totalling £1.7m to hundreds of workers served with redundancy notices.

An industrial tribunal ruled Middlesbrough Council flouted employment laws when they served 350 employees with redundancy notices in a cost cutting exercise.

Only 106 employees were eventually made redundant, but the tribunal ruled that all 350 must receive 90-days pay compensation for the distress it caused.

But the North East town council claims services to council taxpayers will suffer if they are forced to pay workers they still employ.

Effective service

The compensation awards date back to 1998 when the council served redundancy notices on workers in the economic development and transportation department.

The industrial tribunal found the council did not follow the proper consultation procedure before issuing the redundancy notices.

Middlesbrough mayor Ray Mallon, told BBC Look North: "The knock-on effects clearly could be a more derisory service to the public.

"What I want to see the public get is a very efficient, effective service and clearly if you are having to pay monies out to our employees then that will put a dent in the budget.

Legal costs

"I have no problem with some money being paid out, it is the sum."

Mike Brider, regional officer for the Transport and General Workers' Union, said he was hopeful workers who did lose their jobs will share in a further £1m compensation payout for unfair dismissal.

He claimed the total bill could be around £4m when legal costs are added.

Middlesbrough Council said they are taking legal advice.