Workers' victory marred as investment firm owners Better Capital pay nothing

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SACKED City Link workers are to receive compensation — but the taxpayer will foot the bill.

An employment tribunal in Leeds ruled on Thursday evening that the workers should receive a payment of at least eight weeks’ wages after the parcel delivery firm went bust.

Coventry-based City Link was owned by investment firm Better Capital. It called in administrators on Christmas Eve 2014 after declaring “substantial losses.”

The company employed 2,727 workers at 60 depots nationwide. Most lost their jobs on New Year’s Eve 2014 but received no redundancy pay.

Transport union RMT pursued claims for financial compensation for its members at City Link.

But because the firm went into liquidation, the payments will come from the taxpayer-funded Insolvency Service.

In the past, some companies going into liquidation have deliberately failed to comply with employment legislation on redundancy procedures, knowing that, if they are found guilty of non-compliance, the taxpayer has to foot the redundancy bill, rather than their directors or shareholders.

The tactic has been repeatedly condemned by trade unions.

RMT general secretary Mick Cash said: “Although this is clearly a victory for the City Link workers, it remains a scandal that the tab will be picked up by the taxpayer and that those responsible for driving this company into the ground walked away without any financial penalty.

“The union has stood by our City Link members from the start and we have pursued action on their behalf through all available channels.

“It is sickening that the current balance between the workforce and corporate greed is so heavily weighted in favour of the bad bosses.”

City Link was founded in 1969 and had annual revenues of about £300m, a fleet of 1,700 vehicles and delivered 60 million items across Britain and worldwide each year.

In 2006, it was taken over by pest control firm Rentokil, but suffered substantial losses. In 2013, Rentokil sold the business for £1 to investment firm Better Capital, which put in £40 million.

Victims of City Link’s collapse included hundreds of sub-contractors who were left with their company-liveried vehicles but no jobs.
Better Capital was unavailable for comment.