Almost a third of workers at the Prax Lindsey oil refinery in north Lincolnshire, which collapsed into administration this summer, will lose their jobs at the end of October.
The Insolvency Service said the decision to make 125 roles redundant, with 255 people remaining at the site, “was not taken lightly” and follows a thorough review of “all aspects of the business, following its insolvency”.
A spokesperson said: “We understand that this a very difficult time for all those affected by this decision, and the Insolvency Service will fully support employees subject to redundancy via the Redundancy Payments Service.
“The conduct of the company and its directors, following the liquidation of Prax oil refinery, remains the subject of an ongoing Insolvency Service investigation.”
The job losses emerged weeks after a court froze £150m of assets belonging to the owner of the refinery, Winston Soosaipillai, whose whereabouts have been a unknown since the plant’s sudden financial collapse.
Soosaipillai, who is known by his middle names Sanjeev Kumar, is being sued by administrators for breach of his duties as a director, and the government has called for an investigation into the conduct of bosses at the refinery.
Michael Shanks, the energy minister, said: “Our thoughts are with the workers, their families and the community who have been badly let down by Prax Lindsey oil refinery’s owners … The majority of the workforce will be retained beyond the end of October and we remain hopeful that a solution will be found that supports jobs on the site long-term.”
Workers were warned in July to expect job losses after an attempt to find a buyer for the refinery after the collapse of its parent company the previous month had failed to bring forward an offer that was “both feasible and deliverable”.
However, Unite, a trade union, has claimed that the job cut plans come despite “at least two bids” to buy and operate the facility as a going concern.
Sharon Graham, the Unite general secretary, said: “The government has been tin-eared to the plight of workers at the second oil refinery facing closure in less than a year. This makes a mockery of government promises to protect workers and its plan for net zero.
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“The government had promised to ensure that job-focused bids would be the priority at Lindsey, yet prior to bids even being considered, they are already issuing redundancy notices. Unless Labour start to back workers and British industry it will continue to haemorrhage support.”
The official receiver, an Insolvency Service employee who manages nationally significant corporate bankruptcies, appointed Teneo as the refinery’s administrator and FTI Consulting to manage the site at North Killingholme.
All potential bids “with credible and deliverable proposals” for the future of the refinery and its assets will be independently assessed by the official receiver, Shanks added.