Amicus said workers at Dara should have been protected

Workers were laid off from the Defence Aviation Repair Agency (Dara) facility at St Athan in the Vale of Glamorgan after work was transferred to England.

Union Amicus claims the redundancies were a breach of employment law.

The MoD, which could face multi-million pound pay-outs, has suspended decisions on future redundancies.

Employee protection

But the MoD said in a statement that the issue did not call into question the decision taken to transfer support of the Harrier and Tornado fleet from St Athan to two RAF bases in England.

Amicus has launched a legal challenge on behalf of the workers who lost jobs, which it said it was confident of winning.

The union said the MoD has broken regulations under legislation known as the Transfer of Undertakings Protection of Employment (Tupe).

The regulations protect employees when one business is transferred to another business.

Employees cannot be dismissed, but should be transferred with their existing terms and conditions, the legislation states.

Legal challenge

A source at Dara told BBC Radio Wales' Good Morning Wales that the problem emerged because the MoD thought it was transferring work between public organisations - in which case Tupe regulations did not apply.

But the involvement of private firms BAE Systems and Rolls Royce at the RAF bases which took on the jet repair work meant the legislation should have been taken into account, the source said.

The union said in a statement: "Amicus has raised a legal challenge via an application to an employment tribunal accusing Dara, Rolls Royce, and BAE Systems of failing to consult under Tupe legislation, thereby acting unlawfully in the treatment of their members employed at Dara St Athan.

"If successful, the total compensation payable to the employees affected may be substantial and could run into tens of millions of pounds."

Vale of Glamorgan MP John Smith, who also sits on the Commons defence select committee, said he wanted the transfer of jobs away from St Athan suspended immediately following the revelation.

"If there is now going to be compensation of tens of millions it has to call into question the very business case for this decision," he said.

Harrier contracts

An MoD spokesperson said: "We're clear that these current Tupe issues do not in any way call into question the decision taken to transfer depth support of the Harrier and Tornado fleet from St Athan to RAF main operating bases.

"The improved arrangements are already delivering increased availability of aircraft to the front line.

"The chief exec of Dara has suspended decisions on future redundancies and our aim is that in all cases where Tupe does apply we'll follow all the information requirements."

The St Athan facility will close completely in April 2007 with a loss of about 1,000 jobs.