Former employees of the personal injury claim firm The Accident Group (TAG) have been paid between £600 and £2,500 each by the government in a £4m deal.
Many workers were sacked by text message
The 2,500 TAG ex-employees have now been paid by the Department of Trade and Industry after being sacked in May without a month's pay.
The Manchester-based company, which also had offices in Liverpool and Birmingham, was the UK's largest compensation claims firm.
But it called in administrators after racking up debts of £100m and sacked many of its workers by text messages.
Alec McFadden, of the TUC, which represents 1,300 former TAG workers said: "I am pleased that we have got the money but it's only about 85%.
"The award is a result of the collaboration between the TUC and
Mr McFadden expects more than £8m to be eventually paid out to former workers.
The TUC is co-ordinating employment tribunals on behalf of the ex-staff claiming unfair dismissal.
"As a result of the three test cases we are planning in Manchester we are expecting to get £1,000 per person" said Mr McFadden.
There was anger over this image of former boss Mark Langford
Solicitor Bryan Slater, who represents former staff, said the payout was
"testimony to the work of the TUC".
He said: "This large payout has been made through TUC pressure and the gathering together of the working people."
Mr Slater said legal action was being considered against the group's
Former boss Mark Langford provoked the fury of his former employees when he was pictured sunning himself on his luxury yacht in Spain.
A spokesman from the DTI said: "The redundancy payment service ensures that people get a minimum redundancy payment even if the company has gone out of business."