Former Woolworths employees have won compensation totalling £68m after being made redundant when the retailer collapsed in 2008.

More than 24,000 employees will share the amount. Nearly 30,000 staff members were made redundant when Woolworths fell into administration.

Union Usdaw made a claim on behalf of its members for a Protective Award after the administrators “failed in their legal duty to consult with the union before making redundancies”.

The taxpayer is to fund the payout, rather than the administrator, Deloitte.

Usdaw said: “After many months of legal wrangling, the Employment Tribunal finally heard the case involving members employed in England, Scotland and Wales.

“In a judgement released today, the Employment Tribunal in London found that the administrators had failed in their legal obligations to consult with Usdaw and awarded its members compensation of 60 days pay, capped at £330 a week, the maximum payable in these circumstances.”

However, any former employee that worked in smaller stores where fewer than 20 redundancies were made were excluded from the payout, meaning around 3,000 employees who worked in about 180 of the 814 stores will not get compensation.

Usdaw said it is likely to appeal against this part of the judgement.

Usdaw general secretary John Hannett said: “My delight at the award for the vast majority of our members is tempered by the clear injustice that workers in smaller stores could miss out.

“Usdaw thinks that the UK’s current interpretation of the law on collective redundancies is both unfair and possibly a breach of the European Directive which seeks to protect workers in large scale redundancy situations.

“We are taking further expert legal advice and it is highly likely we will appeal against this part of the judgment.”