Wescol Steel, of Leeds, West Yorkshire, made more than 250 staff redundant and called in Ernst & Young as receiver last September.
It was ruled at an employment tribunal in Leeds last Friday that Wescol did not consult the relevant trade unions, despite the fact that it knew it was in difficulties for at least three months before it collapsed.
M&E union Amicus said the Trade Union Relations Act 1992 required Wescol to contact it at least 90 days before the redundancies were made.
Bernard McAulay, regional officer at Amicus, said that according to an Ernst & Young report read at the tribunal, Wescol had lost 拢16m in the 35 months leading up to June 2002.
He said the company had failed to contact trade unions between June and September last year, when the firm was finally placed into receivership.
McAulay said: "We are very happy with the award. We had 101 of our members working for Wescol and they have got the money they deserved."
He added that about 30 other workers had received a total of 拢60,000 from the firm after further union submissions. He said these staff were employed as office workers and draftsmen and were not members of Amicus.
Structural steel firm Wescol suspended trading on the stock market last September.
The group was said to be suffering "severe financial difficulties" because of restructuring, late payment for work done and difficult trading conditions. It employed 550 staff.
n Amicus general secretary Derek Simpson warned this week that British firms were missing out on the building contracts that would be available in the wake of a war with Iraq. The US government has allocated all contracts for the reconstruction of the country to American companies.
Simpson said the US government's decision raised a number of concerns about its attitudes toward British companies and workers, and added that he would raise the issue with prime minister Tony Blair.
He said: "There are many firms in this country that could easily compete for any such work after the conflict."
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