London Metropolitan University was last week ordered to pay £160,000 to 23 staff in what is thought to be the first "class action" in higher education for unfair dismissal.
An employment tribunal ruled that the university unfairly dismissed the lecturers. The university terminated their contracts and shifted them to new ones in August 2004 after London Guildhall University and the University of North London merged to form London Met. The tribunal also said the university gave "vague and unsatisfactory" evidence on when it took the decision to dismiss the staff.
The staff took their case to an employment tribunal and argued that the university tried to put them on inferior contracts.
London Met said the new contracts would align pay and conditions for staff after the merger. But the tribunal heard that staff could lose significant amounts of consultancy income under the new contracts - £16,000 a year in one case. Academics would have to work on site unless their managers agreed otherwise and could be asked to work abroad under the new contracts.
Jenny Golden, regional official at lecturers' union Natfhe, which helped bring the action against the university, said: "Employers need to think very carefully before seeking to dismiss people from their existing contracts and issuing new terms without collective agreement. It's a warning to any other employers who think they can do that and get away with it."
A spokeswoman for the university said it would consider lodging an appeal against the decision: "The university is seeking legal advice as to whether there are grounds for an appeal."
Two staff who refused to sign the new contracts received more than Pounds 37,000 each in compensation. Thosse who did sign got between £540 and £8,100.
The contract changes affected 387 staff, but as the deadline for bringing cases against the university has passed, other individuals may not come forward.
Meanwhile, a separate group action has been brought against the university by Natfhe on behalf of 20 staff asking to be reimbursed for pay docked during an exam-marking boycott in summer 2005 as part of protests over the new contracts. The lecturers are seeking about £1,600 each in compensation.
Ms Golden said the case could prompt "hundreds" more staff to claim. She said that London Met thought it had "got away with pay docking", but its "problems are just beginning" .
The county court case will start with a discussion on March 22, when a date for the full hearing is likely to be set. Natfhe said that some staff were docked pay even though they had been on holiday or maternity leave.
But a spokeswoman for the university said pay was not docked from staff who could prove they were on authorised leave. She added: "Where partial performance due to strike action did genuinely take place, the university will fight for the right to deduct pay."