Employment tribunal decision could cost MoD £1.5m, says union

Hundreds of former staff at Babcock-owned dockyard could get boosted exit payments after Rosyth case
Built at Rosyth: HMS Queen Elizabeth. Photo: PA Images

By Jim Dunton

31 Aug 2021

The Ministry of Defence could be forced to underwrite compensation payments of up to £1.5m for former civilian staff at Rosyth Royal Dockyard following an employment tribunal decision.

Facility owner and MoD contractor Babcock has been found to have breached the contracts of staff at the dockyard, on the Firth of Forth in Scotland, because of the way their payouts were calculated in a 2019 redundancy programme.

The successful challenge, brought by the Prospect, Unite and GMB unions, will see the 48 former Rosyth staff named in the case receive between £1,300 and £4,500 in additional compensation – totalling around £128,000.

But Unite, which is the UK’s second-largest trade union – and which represented 27 of the Rosyth workers, said that because the tribunal found Rosyth Dockyard had committed a contractual breach in relation to calculating redundancy payments, hundreds more former staff could get compensation.

Industrial officer Bob MacGregor said Rosyth Dockyard had treated workers unfairly and would now have to pay the costs associated with the “botched” process.

“The employment tribunal ruling affirms that those workers who have left the company and not part of the claim are also legally entitled to payments because it was a contractual breach,” he said.

“Up to 400 workers could benefit from the decision and it could ultimately cost £1.5m. The decision highlights the value of trade unions in supporting members and securing just outcomes, but also that employers will be held to account.”

Unite said it ultimately expected the Ministry of Defence to have to underwrite those payments.

The tribunal centred around the interpretation of an enhancement to the redundancy pay package for staff at Rosyth Dockyard, which entitled them to one day’s pay for every six months of service.

Prospect, Unite and the GMB argued that the calculation should be based on current daily hours, which were 9.25 hours a day as part of a four-day week in 2019. The company based its calculation on a five-day week of 7.4 hours which had applied in 1997.

Prospect negotiations officer Jane Rose, who took the case through internal procedures, said she was delighted a positive resolution had been achieved for the members.

“The ruling underlines the value of trade unions in supporting members and securing just outcomes,” she said.

“It also provides clarity and protection on redundancy rights for Prospect members at Rosyth going forward.”

A spokesperson for Babcock confirmed the company had been notified that the claims relating to legacy enhanced redundancy payments at Rosyth had been successful. 

“We are surprised by this judgement, however we acknowledge it and have since settled these payments with the relevant parties,” they said.

Babcock bought Rosyth in 1997, prior to which it was known as Royal Naval Dockyard Rosyth. The aircraft carriers HMS Queen Elizabeth and HMS Prince of Wales were both constructed at the 120-hectare facility.

CSW asked the MoD for a response. It declined to provide one.

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