The Co-op offers financial support to former workers

Workers who lost their jobs when a new firm took over the stores where they worked are being offered financial support by their former employers.

Some 345 of the East of England Co-op's former employees were made redundant following the collapse of their new employer Vergo Retail.

It bought 12 Co-op stores in Norfolk, Suffolk and Essex in July 2009 but the stores collapsed in May.

Of the 345 staff, 290 will be eligible for the payments.

They had worked for the Co-op for at least two continuous years before the handover to Vergo.

The will receive 75% of what they would have got if they had been made redundant by the Co-op in July 2009 when the transfer to Vergo took place.

The money is in addition to what the shop workers will receive in statutory redundancy pay from the government and the East of England Co-op said it would total several hundreds of thousands of pounds.

Talks with unions

The decision to pay enhanced redundancy compensation came after talks with the unions USDAW and NACO and Ipswich Conservative MP Ben Gummer.

East of England Co-op chief executive Richard Samson said: "The failure of Vergo Retail has created many victims across the country and the lack of protection for employees highlights a serious failure in the law.

"Although there is no legal obligation for the Society to contribute to their redundancy pay, we are concerned that the law has been ineffective in protecting their employment rights in this situation."

Sharon Ainsworth, of the union USDAW, said: "While the ex-gratia payments will obviously be of great assistance to members at this very difficult time this unprecedented gesture again highlights the failure of the law to protect workers in these situations.

"I also very much welcome the Co-op's decision to join USDAW in calling for the Government to investigate how workers can be better protected when their employers go into administration."

Cheques are expected to be sent out within the next fortnight.

More on this story

Related Internet links

The BBC is not responsible for the content of external Internet sites