Workforce to waive legal claims

The Rover workforce has agreed to waive legal claims of at least £100 million (€170 million) that helped to scupper the bid by…

The Rover workforce has agreed to waive legal claims of at least £100 million (€170 million) that helped to scupper the bid by venture capitalists Alchemy Partners, in order to support the Phoenix consortium.

Lawyers acting for the unions denied their tactics had left employees vulnerable should the deal sour, claiming they had secured enhanced redundancy terms for the next 12 months.

"It was the unions' intention to put as many legal obstacles in Alchemy's way as possible, but at the same time not to roll over . . . and give a blank cheque to John Towers, head of the Phoenix consortium," said Mr Michael Stokes, a partner at Rowley Ashworth, which acted for three of the four unions involved.

Phoenix is understood to have agreed to give BMW an indemnity to cover any unexpected redundancy and legal costs.

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Alchemy's refusal to give such an undertaking was "absolutely central" to the last-minute collapse of its bid, a legal adviser said.

The unions have dropped a legal claim against BMW, which alleged the German group had failed to meet its legal obligations on employee consultation. The potential bill for this failure was put at £100 million.

Phoenix, BMW and Rover have agreed in effect to match for the next 12 months the terms paid by BMW last year to people taking voluntary redundancy.

"We were threatening all sorts of other claims in addition to the legal action for failure to inform and consult," said Mr Stokes. "We threw a lot of things in the air in the hope the bid could go wrong for Alchemy."

This tactic almost backfired when the Alchemy bid was withdrawn, leaving Rover facing potential closure.