City Link Directors cleared

The three former directors of failed parcels delivery company City Link have been cleared of the charges of failing to inform the UK government that they were intending to make their staff redundant.

Under UK law a firm of a certain size must inform the Department for Business, Innovation and Skills (BIS) that they are planning to liquidate the company with due notice, and arrange redundancy packages for the staff under the Trade Union and Labour Relations Act.

Today (Friday 13th November) the three former directors – David Smith, Robert Peto and Thomas Wright – were cleared in Coventry Crown Court of the charges brought to them by the Department of BIS.

According to reports in the media, the three directors claimed that they were primarily focused on getting a £25 million investment package to help the company survive. When this failed they were unable to pay the 2,700 employees’ wages and folded the company on the 24 December 2014.

Recounting that running up to the business’s failure, David Smith told the court, “There was a clear and credible bid on the table for £18 million. The business could have been sold – subject to the price consideration being right – with no employees losing their roles.”

Smith says that he has yet to find another job after his delivery business’ collapse late last year. In a statement from the directors their legal team said that, “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.”

The collapse of City Link made waves throughout the industry, showing just how narrow margins are for businesses in this sector. Many of the staff who lost their jobs have managed to find new work in the industry however.