A COUNCIL has lost an employment tribunal against six former members of staff who renegotiated "preferential" redundancy packages just months before a group committed to closing down the authority won an election.
A Bedford Industrial Tribunal ruled that it was lawful for former councillors sitting on Letchworth Town Council to alter severance terms with its staff before elections in 2009.
During that election many of the councillors were ousted by members of the group HELP, which wanted to permanently close the authority, leaving the staff without jobs.
The new administration had argued that the change of terms was "irrational" and the council was not duty bound to honour them, however a claim was brought by the former employees who subsequently left the authority.
At the hearing, the council argued that the new terms were many times more generous than similar councils locally, including severance payments and 12 months notice.
The council said that meant that staff were entitled to between 17 months to two years pay following redundancy.
But the tribunal did not regard this contractual variation as going beyond what the old council could lawfully do.
Speaking after the ruling, council chairman Cllr Frank Lovett defended the council’s decision to try to renegotiate the contracts saying that they had acted only after taking legal advice.
"If the former councillors had not changed the contracts just before the elections in 2009, the cost to the rate-payers of Letchworth would have been around £40,000," he said. "Because the tribunal ruled against us the full cost of the redundancy payments to the six former staff will be in excess of £200,000."
He added: "It is unfortunate because we had hoped that any surplus money would eventually have been redistributed back to Letchworth ratepayers.
"We felt this would have been particularly welcome during this difficult economic time. Now the money will go to the past employees instead.
"Ultimately it is for the ratepayers of Letchworth to form their own view as to whether the way in which the staff contracts were changed was rational or whether it was unreasonably generous.
"We remain convinced that it was our duty to try to safeguard the council’s funds for the ratepayers of Letchworth and that it was the correct thing to do."
He said that the current council remained committed to the permanent closure of the town council as soon as possible.