Former employees of Woolworths have won £67.8m in compensation, according to the shopworkers union Usdaw.
However, due to an error by the administrators put in charge of the chain during its 2008 collapse, the British taxpayer will be forced to foot the bill through the Government's Redundancy Payments Office.
Having failed to find a buyer, the high street chain, which had featured on Britain's streets for more than 100 years, closed the last of its 800 stores in January 2009.
A spokesperson for the union said that more than 24,000 who were made redundant will be awarded 60 days’ pay.
The agreement was reached following an employment tribunal in which Usdaw argued that the administrators had not consulted with the union before making the redundancies, despite being legally obliged to do so.
The tribunal found in the union's favour, however the compensation will not include around 3,000 former staff members who worked in smaller branches where fewer than 20 redundancies were made, the spokesman added.
John Gorle, Usdaw national officer said: "While the award is never going to fully compensate people for losing their jobs, I'm sure our members will welcome the money and appreciate the effort Usdaw has made to secure the compensation for them.
"Cases like this once again demonstrate the immense value of belonging to a trade union."
"However, I'm once again bitterly disappointed that a tribunal has limited the scope of the award.
"The fact that some of our members won't be compensated simply because their store had less than 20 employees is just plain wrong and shows the gaping loophole and injustice of the current legislation.
"Nearly 30,000 employees were made redundant from Woolworths at the same time and for the same reason, so to suggest 3,000 of them didn't constitute a collective redundancy is a nonsense."
Usdaw general secretary John Hannett added: "My delight at the award for the vast majority of our members is tempered by the clear injustice that workers in smaller stores could miss out.
"Usdaw thinks that the UK's current interpretation of the law on collective redundancies is both unfair and possibly a breach of the European Directive which seeks to protect workers in large scale redundancy situations.
"We are taking further expert legal advice and it is highly likely we will appeal against this part of the judgment."