Nearly 100 staff who worked at Aylesford Newsprint in Kent have been awarded around £750,000 after being dismissed without consultation with their union.
The 'protective award' was handed to the staff on 15 March after a hearing at Ashford Employment, following a claim brought by Unite.
However the union said that because the Larkfield-based company fell into administration early last year, Unite’s members, who are classed as unsecured creditors, will only receive £321,000 of that figure, paid from the government’s redundancy fund.
In an insolvency situation employees can claim up to eight weeks’ pay arrears capped at the statutory maximum - in this case £464 per week - from the fund.
Unite regional officer Tim Elliott said the union had battled to get them the maximum amount possible under current legalisation.
“The sale of the company’s land will raise several million pounds and so it is possible that our members may also recover additional cash on top of that paid by the fund, but it won’t be the full amount.”
The 98 staff are expected to recieve payments of either £3,700 or £1,300 each depending on when they lost their jobs. A total of 233 staff were made redundant when the loss-making company fell into administration.
Its business assets were sold via online auctions in May 2015 by consultancy firm Lambert Smith Hampton (LSH), which was appointed to carry out the sale.
The auctions included internal transport and mobile plant as well as engineering and sheet metalworking equipment. The online auctions, as well as private treaty phases, resulted in total realisations of £8.74m.
In a statement, administrators from KPMG said: "W&S Recycling has purchased the two paper mills (machines) and all of the ancillary equipment as well as the buildings.
"W&S will not restart any kind of paper production at the site; they are currently in the process of selling the paper mills and equipment to interested parties for removal.
"What W&S cannot sell, they will take away from the site as part of the deal with the administrator. The administrator is looking to sell the freehold land, and will be seeking planning approval before going to market."
Earlier this month, regional news website Kent Online reported that plans for how to develop the Aylesford Newsprint site have been revealed to the public.
The three options that were presented by LSH were to keep the area for industrial use, use it for a mix of commerce and housing, with between 350 to 400 homes, or use it for a larger residential area, with up to 500 homes.
LSH has now also been appointed, in association with John Wilkie Paper Mill Services, to carry out the private treaty sale of a combined heat and power scheme as part of the administration. Offers are being sought in the region of £2.5m.
The site comprises a water treatment plant, two CHP facilities, a steam turbine and a steam turbine generator.
The CHP scheme was run by employees at Aylesford Newsprint on a day-to-day basis and provided power to the firm, some external customers and a small proportion to the national grid.
The plant was able to convert 16 tonnes per hour of process paper waste into steam used for both paper manufacture and power production, significantly reducing the level of emissions produced.
Aylesford Newsprint was the longest established producer of 100% recycled newsprint and helped to save half a million tonnes of paper going to landfill each year.
LSH Machinery & Business Assets team director Mike Hanson said: “Despite the unfortunate circumstances surrounding the closure of Aylesford Newsprint we were able generate widespread bidder interest in the business’s assets at auction in May.
“We will now be undertaking a targeted campaign to ensure the successful sale of the associated CHP scheme and are anticipating significant interest from a range of prospective buyers.”