Hundreds of employees who are losing their jobs on Teesside could also lose thousands of pounds in redundancy pay – following a change in their contracts just a few months ago.
Alex Cunningham MP for Stockton North has been told by employees at Direct Line on the Teesdale site that they were persuaded to sign new contracts which took effect from 1 June, just 3 months before they were told they were out of a job.
He has been told that the contracts mean that redundancy terms have been reduced and even people with only a few years service face a considerable cash loss compared to what they would have been entitled to under the old contracts.
Alex today raised this issue on the floor of the House of Commons and asked new Leader of the House, Andrew Lansley for a debate on the issue and if the Business Secretary planned a statement on the matter.
Alex told the House:
“500 Teessiders, many of them from my Stockton North constituency, yesterday lost their jobs with Direct Line, part of the state owned RBS Group, not long after being apparently cajoled into signing new contracts which took effect on the first of June. I’m told these new contracts mean that their redundancy payments will be considerably less than under the old one. Many could lose thousands of pounds as well as their jobs. I’m sure the Leader of the House will agree that such action is abhorrent, and the managers must be held to account. Is he aware if the Business Secretary plans to make a statement on the decisions of this state owned business and will the Leader of the House agree to a debate?”
After the debate was turned down, Alex said:
“I’m disappointed there is no statement planned and that we can’t debate the issue in the Commons. I don’t believe for one minute that Direct Line didn’t know their employees’ jobs were soon to go when they were persuading them to sign new contracts. I’m told the man delivering the bad news yesterday actually admitted he knew several weeks ago they were all to be sacked – and that must have been around the same time as the new contracts were coming into effect.
“I spoke to their managing director yesterday and will be writing my second letter in two days to him, this time asking for clarification on his company’s redundancy policy – and whether or not the 500 employees will lose this vital cash.”