WORKERS made redundant when a carpet maker went into receivership are getting less compensation than they expected, because the Government is paying for the redundancy package.

The 140 former employees of Hugh Mackay, based at Meadowfield, near Durham City, were expecting up to £3,600 -equivalent to 13 weeks' pay -awarded by an employment tribunal that ruled they got insufficient notice of the redundancies in March.

The workers, many with 30 years' service, would have received that much if the firm was still trading and could pay, but the money is instead coming from the Department of Trade and Industry (DTI), whose rules limit payments to eight weeks.

Trevor Owens, 58, of Bowburn, near Durham, who worked for the company for 42 years, said he had been told he was getting £2,400 gross, but that National Insurance deductions would reduce that to £2,070.

He said: "It is a hell of a drop from £3,600 and people are not happy. A lot of people have spent their money already.

"We want to know why this has happened, because we were told we were going to get 13 weeks' money."

Nick Halton, of the workers' union, the TGWU, said: "If the company was still in existence and had assets, the workers would have got the 13 weeks, the maximum award, but the DTI's rules are that they only pay out eight weeks.

"If the firm had done things right, the workers would have gone out with just the statutory notice pay and redundancy money.

"I would love it if we had got the maximum payment, but those are the rules; harsh rules."

He said the "most galling thing" was that the Government did not give the company a grant to help tide it over a cashflow problem.

He said: "The firm had £6m-worth of orders. The workers would still have been employed and paying taxes. Another firm finished at about the same time, Philips, and the Government offered it £20m."

The company, established in 1903, supplied Buckingham Palace and the Royal Yacht.