The former directors of collapsed parcel carrier City Link have been cleared of failing to inform the government of impending staff redundancies before it went into administration last year.
The case against David Smith, Robert Peto and Thomas Wright was dismissed by Coventry Magistrates’ Court last week (13 November), a spokeswoman for the court told Motortransport.co.uk.
The former City Link directors were accused by the Department for Business, Innovation and Skills (BIS) of failing to notify the government of its intention to make staff redundant. However, the court found that the directors believed a sale could be achieved before the company appointed an administrator on Christmas Eve, which would have therefore avoided redundancies.
Over 2,500 staff were made redundant throughout December 2014 and January after the company suffered consecutive years of losses. In the year to 24 December 2014, it saw £44.4m net loss after tax.
Following the hearing Nicholas Greenacre, partner at law firm White & Case which represented the former directors, said: “My clients are all pleased at this morning's verdict. But their overwhelming feelings are sadness and regret that, despite their very best efforts in dreadful circumstances, they could not save City Link from insolvency and that so many people lost their jobs at the end of last year.”
Pay-out for Belfast employees
Meanwhile, 10 people formerly employed at City Link’s Belfast depot have won a maximum redundancy pay out after the Industrial Tribunal found that the company failed to properly consult with staff based at the depot before they were made redundant.
The group has been awarded 90 days’ pay, capped at eight weeks’ due to the damages being paid by the Department for Education and Learning in Northern Ireland.
In its decision issued after the hearing at the Office of Industrial Tribunals and The Fair Employment Tribunal in Belfast on 9 September, the Tribunal said it was not satisfied that there were special circumstances which made it impractical for the company to consult with employees.
The Tribunal was told that no collective consultation took place and no efforts were made to facilitate the election of appropriate representatives to discuss redundancy with, as required when a business plans to make 20 or more people redundant at one site within a period of 90 days or less.
Carl Moran, partner at JMW, which represented the group, said: “We are delighted to have won the judgement in Northern Ireland for City Link’s failure to consult properly over the redundancy of the employees at the Belfast depot. We are now urging any other ex-employees from this depot to contact us as they are also entitled to apply for the same amount of damages.”
Similar group action proceedings in Great Britain, for which over 350 staff have signed up, are ongoing.
