A COUNCIL faces a compensation bill of £1m over the sacking of 150 workers.

A panel has thrown out an appeal by Middlesbrough Borough Council against the finding of an industrial tribunal that it did not carry out proper consultation before dismissing the employees.

It will be weeks before the Employment Appeals Tribunal publishes its report, but Town Hall officials will recommend to councillors next week that negotiations are opened with the trade unions.

It can today be revealed that Middlesbrough council has set aside £1.8m for just such a contingency.

Tim Bush, the Transport and General Union Workers regional industrial organiser, said: "We are possibly looking at £1m in compensation, allowing for the 90 days notice to which they had been due.

"They (the council) got it well and truly wrong. This proves we were right in the first place to stand by our members and proves that an authority of this size can make mistakes. Obviously, we are overjoyed at the decision.

"If only the council had taken a different route, all this could have been avoided."

"We will be seeking financial restitution for those people involved. There may be further claims for unfair dismissal - already lodged - which now may become live."

The council had originally issued 350 compulsory redundancy notices, but only made 150 redundant when it axed the economic development and transport department to save £1.7m.

A council spokesman said: "A report on this matter will be going for discussion to next week's cabinet meeting. The report will recommend that the council negotiates with the trade unions to reach a settlement and resolve this matter."

The appeals tribunal finding came as Councillor Patricia Walker, wife of council leader Councillor Ken Walker, was installed as Mayor of Middlesbrough.

Former local television celebrity Paul Frost was brought in to act as a master of ceremonies for yesterday's mayor making.

Some £260,000 has just been spent redecorating the mayor's parlour and west wing of the town hall with £10,000 spent on carpeting the parlour and £35,000 on oak panelling.

The council employs its own public relations unit, while retaining for £800-a-month the services of PR company, Paul Frost Associates, to promote the work of the cabinet, which is led by Coun Ken Walker