A tribunal has found that collapsed firm Pure Legal failed to comply with employment rules when laying off employees.

Employment Judge KM Ross said that Pure Legal Ltd had failed to comply with the Trade Union and Labour Relations Act when it let staff go last November.

In total, the company - whose affairs are now run by the administrators - was ordered to pay all 18 claimants who were dismissed their remuneration for 90 days. The same judge made an identical finding and order in relation to four claimants who lost their job with Pure Business Group Ltd last November.

Pure Legal, based in the north west, entered administration last year following a High Court petition by lender Novitas following missed payments.

Administrators said in June that payments to former staff and repayments to the firm’s lenders were likely to wipe out any money recouped from the sale of the business and its work in progress.

At the time, there had yet to be any preferential claims through the redundancy payment service from employees, but the directors had estimated that eventually claims for arrears of pay and holiday would be £10,730. The administrators considered this to be a ‘low estimate’, saying they expected a higher claim from the 116 staff employed when the business went under.

The June update also confirmed that unsecured creditors were likely to receive nothing from the £23.3m they were collectively owed, although the firm’s lenders should be repaid in full. Pure Legal owed around £1.85m to Novitas and £6.1m to Perspective Investment.

Administrators said that fees had already come to £742,350 and a further £1m would be incurred. The administration was officially extended earlier this week to next January at least.