Oddbins could face legal action from long-serving staff after it was revealed they would not be paid statutory redundancy pay or full-notice payments.

The troubled off-licence chain revealed earlier this month that it was closing 39 stores ahead of a Company Voluntary Agreement (CVA).

In a letter to staff at the 39 stores, seen by The Grocer, MD Simon Baile confirmed they would be made redundant.

"Please note that as a result of the financial position of the company and the consequential limited funds available, we are not able to make statutory redundancy payments or full-notice payments to employees with more than four years' service," he said in the letter.

One member of staff said he was planning legal action. "I'm personally appalled that the directors are paid £150,000 each year and won't pay a few thousand pounds to the staff for their notice period," he said. "They should have sought financial advice ages ago. I'm going to do whatever it takes to get my money."

The affected staff can now ask the government to fund the statutory redundancy money Oddbins has refused to pay through the Redundancy Payments Office. The government could then try to recover this money from Oddbins, but experts said this was unlikely when Oddbins already owed HMRC £8.6m. If Oddbins' creditors accept the terms of the CVA, Oddbins would become insolvent in law and the government would automatically make up the shortfall of the missing statutory redundancy pay. Staff would still need to bring a breach of contract claim in an employment tribunal for the additional missing notice and redundancy pay. Even a successful claim would be treated as money owed to an unsecured creditor.

Creditors will vote next Thursday on whether to accept the CVA, which would see Oddbins repay them 21p for every £1 owed over a 46-month period. If it is not passed, the company risks entering administration.