Taxpayers could foot compensation bill after defunct firm failed to inform its staff members of redundancy
FORMER Circularity Scotland staff members are reportedly seeking compensation after being made redundant last month.
Solicitors from Scottish law firm Thompsons are lodging a ‘protective award’ claim on behalf of the employees after the staff claimed they were dismissed without proper statutory consultation.
David Martyn, head of employment law at Thompsons, said: “The law obliges employers who are thinking about dismissing staff on a large scale to consult with their employees to seek their views on ways of avoiding redundancies.
“It is extremely disappointing that those in charge of Circularity Scotland made no effort to comply with their legal obligations.”
The former employees could see thousands of pounds in compensation should their bid be successful, with Martyn stating that this “will likely” be paid for by the taxpayer due to Circularity Scotland’s mistake.
Dozens of staff members were made redundant with immediate effect at the firm in June after Circularity Scotland announced it could no longer pay staff. This followed on from the Scottish Government announcement of the latest delay to the deposit return scheme.
Scotland’s DRS is now currently expected to launch in October 2025, in line with the UK-wide go live date, following discussions over the viability of the scheme after glass was removed by Westminster.
Following the Scottish Government announcement, Circularity Scotland put out the following statement:
“The board of Circularity Scotland have been working to manage the impact of the Scottish government’s announcement and find a way for the business to continue to operate.
“While this work is ongoing, we instructed staff to go home on Thursday 8 June.
“The unfortunate reality is that, at this point, we are not able to confirm whether our staff will be paid for this month or whether they will be able to return to the office.”
Retailer Abdul Majid also recently won his judicial case against Circularity Scotland after challenging the legality of the retailer handling fees that the firm was seeking to impose on retailers.
Commenting on the judgment, Scottish Grocers’ Federation chief executive Pete Cheema said: “The Court of Session has held that the way that the Scottish Government and Circularity Scotland had set up the Deposit Return Scheme was unlawful and did not comply with the regulations made by the Scottish Parliament.
“CSL had no powers to set the fees that it sought to impose on retailers and, even if it had, then they had still got it wrong by trying to impose a flat fee on all retailers, despite the difference in costs to the operators.”
