In January this year, Shopworkers' union, Union of Shop, Distribution and Allied Workers (Usdaw), won compensation worth nearly £70 million for 25,000 former employees of both companies, but around 1,200 former employees of Ethel Austin and 3,000 Woolworth's employees were denied compensation because they worked in stores with fewer than 20 staff.
On Friday, the chairman of the employment appeal tribunal granted Usdaw leave to move to a full hearing on the basis that the union did have an arguable case.
The full hearing is expected to take place in spring 2013.
John Gorle, Usdaw national officer, said: "Although there is still some way to go, the fight to correct the clear injustice of denying compensation to staff purely on the basis of the size of shop they worked in has now overcome a major hurdle.
"Whatever the current interpretation of the law, it has always been a nonsense to suggest that staff in smaller shops were not part of the same collective redundancy situation as their colleagues in larger stores."
Gorle added: "While our focus is on achieving a just settlement for our members formerly employed by Ethel Austin and Woolworths, this case could have far-reaching implications for all workers facing redundancy, whether in the retail sector or wider economy."
Martin Warren, head of employment at law firm Eversheds, believes the legal appeal could impact on all UK employers. He said: "Employers, especially retailers, will be watching closely whether the unions are successful in its bid to take an appeal to the Employment Appeal Tribunal.
"For the sake of legal certainty, it is hoped that the appeal tribunal refuses the union's application, endorsing the approach taken by the employment tribunal, which applied existing case law in reaching its decision."
