More than 400 former staff at Debenhams' UK operation are set to receive a payout totaling around €1m after winning a legal battle against the retailer, which went bust more than two and a half years ago.
A tribunal judge ruled that the business failed in its duty to properly consult with the staff at risk of redundancy, lawyers acting on behalf of former employees said.
Debenhams fell into administration in 2020 and was forced to shut its doors after 242 years on British high streets.
It marked one of the UK's biggest retail failures and resulted in more than 10,000 job losses. The business suffered from national lockdowns during the Covid-19 pandemic.
Law firm Simpson Millar, which represented the group of former workers, said that the settlement relates to staff who were based in the landmark department store on London’s Oxford Street.
It means that the 419 staff can be compensated with up to 90 days’ gross pay, capped at €5,000 given that the retailer is insolvent.
The money will come from a UK Government-funded redundancy scheme designed to compensate people when their employer has gone bust.
The court ruled "that the retailer failed in its duty under UK employment law legislation to carry out proper consultation with staff at risk of redundancies," Amanda McKinley, a lawyer at Simpson Millar, said.
"The outcome of the legal action now paves the way to secure a payout in the form of a protective award for our clients which is expected to be in the region of £860,000 (€1m)."
She expressed delight at having received the first judgement on behalf of hundreds of former staff.
The firm represents a further 475 people who have taken Debenhams to court and who are awaiting final judgements.
Ms McKinley added that "our clients are delighted that the matter is now coming to a close so that they can finally move forward with their lives."
The decision comes amid a turbulent time for UK retailer Wilko, which fell into administration earlier this month, putting more than 12,000 jobs at risk.
The high street chain is in the midst of seeking bids for the business that could rescue some or all of its stores.
