FORMER workers at a North-East chipboard factory have been awarded £250,000 in compensation after they took their employers to court.

All 129 staff at Masistar, in Shildon, County Durham, were made redundant when the company went into receivership on February 25.

They took their case to Newcastle Employment Tribunal after the firm failed to hold a statutory 90-day consultation period to discuss the redundancies.

Taxpayers will have to foot the compensation award because the company no longer exists.

Union official Gerry Hunter, of Amicus, said workers had received a phone call at home telling them not to come into work and that cheques made out for their wages would bounce.

He said the company failed to tell employees there had been a management buy-out and that the company, formerly Vertex, was now owned by Masistar.

Workers made the discovery when they received pay cheques displaying the Masistar name.

Mr Hunter said: "They did not know about the buy-out until they got their pay slips.

"There was 129 employees at the time of receivership and a few of them have been successful in getting other jobs.

"It was quite a young workforce. One of the lads gave evidence to the tribunal saying he was contracted to work 60 hours a week which is astounding.

"The workers are delighted at the outcome, they had a hard time. Three days before the company closed, the gas at the factory was turned off but the company did not tell them then what was happening.

"Sadly the Government will have to underwrite this award and it has to be paid by the taxpayer."

The chipboard factory was formerly owned by George Reynolds UK before it was sold to Vertex Panel Products in February last year.

On December 18 last year Vertex went into administration and the company was subject to a management buy-out by former Vertex directors under the name of Masistar.

Two months later, Masistar went into receivership and the majority of its assets were sold to Egger (UK) Limited for £4.1m in April.

Last night, former director of Masistar Joe Martoccia said he was not aware of the tribunal case and all matters were with receivers KPMG.