#AceNewsServices – Editors Featured Post:BRITAIN:Dec.29: On Christmas Eve just after all the shops have closed and people have bought all their Christmas Food & Fayre. The parcel and delivery firm City Link announces it is going into, administration putting 2,000 peoples jobs at risk.
The Guardian reports today that the founder of City Link’s parent company has denied the firm’s collapse was mishandled and apologised to more than 2,000 workers who found out on Christmas Day that they would lose their jobs. Jon Moulton said the directors of Better Capital, which owns the parcel delivery firm, were very sorry about its collapse and the fallout for its workforce.
The veteran venture capitalist claimed that taxpayers would not foot much of a bill for redundancy payments for the firm’s staff as City Link had “paid a fortune” in taxes since it was taken over by Better Capital in April 2013. More than 2,000 City Link staff are facing redundancy on New Year’s Eve and company administrators EY have been unable to reach a deal with trade union bosses desperate to save the jobs.
The RMT union has urged the business secretary, Vince Cable, to rescue the company but Moulton said the Department for Business, Innovation and Skills was aware of City Link’s collapse before Christmas and did not request a meeting.
Government Press Release:
The administrators for the delivery firm City Link have confirmed they anticipate a substantial number of redundancies in the coming days.The administrators will have the opportunity to consult employee representatives about redundancies.
There are special arrangements for employees dismissed on the insolvency of their employer which guarantees a basic minimum of payments from the National Insurance Fund (NIF), administered by the Redundancy Payments Service in the Insolvency Service.
This covers redundancy and other contractual payments, within limits, and aims to pays 80% of claims within 3 weeks after the claim is received. The payments are made from the National Insurance Fund under provisions contained in the Employment Rights Act 1996. All payments are subject to legal limits in both the period that they can be paid and the maximum weekly amount – currently £464.00 per week.
Thought the statutory scheme does not cover payments due to self-employed contractors or agency workers. City Link employees and contractors (as creditors) should contact the administrators, Ernst and Young in the first instance. Agency workers should contact their respective agencies.
The sale by pest control company Rentokil Initial to Better Capital took place in April 2013 when it sold its parcel delivery firm City Link for £1, after years of losses.
Rentokil acquired City Link in 2006, but City Link has lost money since 2007, including £26m in 2012.
It is now being offloaded to restructuring specialist Better Capital, who are expected to invest £40m into the business.
Better Capital has recently invested in fashion retailer Jaeger and double-glazing firm Everest.
City Link will continue to be run by its existing management team, Rentokil said in a statement.
Rentokil chief executive Alan Brown said: "I believe City Link has now turned the corner after five years of substantial losses."
Mr Moulton, founder of investment business Better Capital, told Radio 4’s Today programme: "We chased every possible way to save this company." and have invested £40 million but keeping it open any longer is illegal and in breach of insolvency rules.
Well what a great bit of jiggery pokery as investing just £40 million was barely enough to keep it going and closing it now with it there still being about 40,000 parcels at City Link depots across the country, to be collected by customers, will help to offset loses and as it was purchased show a debt-book able to offset these against future investments.