England

City Link directors deny not informing government over job cuts

City Link van Image copyright AFP
Image caption The firm called in administrators on Christmas Eve

Three former directors of collapsed parcel firm City Link have denied failing to inform the government they were planning to make staff redundant.

The Coventry-based firm, which employed 2,700 people across the UK, called in administrators on Christmas Eve.

Prosecutors said City Link was "dead in the water" when a rescue plan failed.

The three men all deny failing in a statutory duty to give 45 days' notice to the secretary of state of potential job losses of 100 or more.

Robert Peto, 48, of Southam, Warwickshire; Thomas Wright, 32, of Camden; and David Smith, 50, of Dickens Heath, Solihull, are on trial at Coventry Magistrates' Court.

'Deprived workers'

Prosecutor Paul Ozin said after failing to secure a rescue package on 22 December, the men formulated a plan to keep trading over Christmas and put the company into administration by Boxing Day.

Having called in administrators on Christmas Day, City Link announced more than 2,300 job losses just days later on New Year's Eve. A week later it announced a further 230 redundancies.

The court was told an HR1 form giving notice of potential redundancies between 31 December 2014 to 31 March, was sent to the Insolvency Service on Boxing Day.

Mr Wright said during interview he believed the government had been informed and redundancies were not inevitable on 22 of December.

Mr Peto said it was "up to the administrators" to decide what to do with the firm, and Mr Smith said the situation had been sprung on them, the court heard.

But Mr Ozin said the duty to give notice fell on the company.

"The failure to give such notice deprived workers of the potentially substantial benefit arising from notice to the secretary of state for the period between December 22 and December 26, when the administrator remedied the deficiency."

The court heard the company, which had 53 depots across the UK, had cash-flow problems and had been marketed for sale in October 2014.

The trial continues.

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