Cherie Booth QC has successfully negotiated one of the biggest settlements for unfair dismissal in employment tribunal history.

The barrister wife of prime minister Tony Blair achieved what is believed to be a substantial out-of-court payout based on a £4m claim submitted by 119 sacked Yardley perfume workers.

The worker's firm of solicitors, Fladgate Fielders, told the tribunal hearing at Stratford, east London, on Wednesday, that their claim was the largest made by any group of employees outside of a trade union.

The workers' case centred on allegations that they had been unfairly dismissed, when their firm Yardley was sold to Cosmopolitan Cosmetics, a subsidiary of rival German cosmetics firm Wella, for £7m in 1998.

Wella, however, only wanted to acquire the Yardley brand name including its royal warrants and left the fate of the 119 employees in the hands of receivers KPMG. But when the English perfume house eventually went broke, most of the remaining funds at Yardley went to creditors.

Miss Booth argued at the tribunal that by acquiring the Yardley assets, Wella was obliged to pay the workers redundancy payments when they were subsequently sacked. But Cosmopolitan Cosmetic's lawyer Nicholas Underhill QC hit back by saying that it was wrong to assume that whoever got the Yardley name also got the whole of its business.

He cited the example of one Yardley fragrance, called So, which accounted for 15% of its turnover but had no reference to the English perfume house on its packaging.

The case ended abruptly on Thursday, when Cologne-based Cosmopolitan Cosmetics reached an undisclosed out-of-court settlement with the sacked workers.

Both sides refused to divulge the size of the payment.