Scots staff face job loss after City Link collapse

Vince Cable has offered to meet RMT union representatives. Picture: Getty

The troubled firm announced it was going into administration on Christmas Day, causing uncertainty and anger among the firm’s 2,727 employees, many of whom were on holiday with their families.

CONNECT WITH THE SCOTSMAN

• Subscribe to our daily newsletter (requires registration) and get the latest news, sport and business headlines delivered to your inbox every morning

• You can also follow us on Facebook, Twitter and Google +

The timing of the announcement was branded “disgraceful” by the RMT, who told its members that wages owed up to 31 December would still be paid, but any further payments were not guaranteed.

Staff had been left in the dark until Christmas to find out that their employer had collapsed, despite union claims that bosses had been working with insolvency advisors since November.

City Link, owned by investment firm Better Capital, called in administrators Ernst & Young because no buyer had been found to save the company.

Ernst & Young said some staff would be retained to return parcels to customers and help with winding down the company.

Yesterday they also confirmed that “substantial redundancies” were expected “over the coming days”.

City Link, which has struggled financially for years, employees more than 100 Scottish staff across the country, including in Edinburgh, Glasgow, Aberdeen and Motherwell.

RMT general secretary Mick Cash said it was “shocking” to have “sprung this announcement once all the Christmas deliveries have been completed”.

Mr Cash said the decision to go into administration was the “bitterest blow any group of workers could receive on Christmas Day”.

He said: “RMT will do everything within its power to mobilise a political and industrial fight to save the thousands of jobs that have been put at risk as a result of this shock announcement.

“The way it’s happened … that on Christmas Day they’ve done this to our members is disgraceful.”

The RMT union was told from New Year’s Eve a skeleton staff will be retained to wind down the company.

Mr Cash has demanded an immediate meeting with Vince Cable, the Business Secretary, to arrange a plan to salvage the company.

“Mr Cable had offered to meet RMT representatives in the new year, but Mr Cash said this was too late and added “the business will have been smashed to pieces by then”.

Founded in 1969, City Link was acquired by restructuring specialist Better Capital in April 2013. It invested £40 million but E&Y said City Link had incurred substantial losses over several years and the money could not help it turn the firm around.

Paul Horner, from Kirkcaldy, has been a sub-contractor at a City Link depot in Fife for three years. He said he was “totally and utterly gutted”.

He added: “This has happened after they spent money on new uniforms and new scanners.

“Everyone thought we had turned a corner and things would be getting a lot better, but obviously not.

“I found out on Christmas Day. I’m still pretty numb. I’ve just told my fiancée. I couldn’t bring myself to tell her yesterday. She’s distraught.

“I just hope I get paid at the end of the month because, like all the other sub-contractors, I need money to live on, to pay for the van and the diesel.”

City Link administrator Hunter Kelly explained how the company would go forward over the coming days: “We have temporarily suspended operations at all transport hubs and depots until Monday 29 December 2014, when we intend to reopen depots to the public to enable customers and intended recipients to collect their parcels,” she said.

“We will also provide support to employees relating to potential redundancies. We are now beginning the process of realising the company’s assets.”

SCOTSMAN TABLET AND IPHONE APPS

• Download your free 30-day trial for our iPad, Android Android and Kindle apps

• Keep up to date with all aspects of Scottish life with The Scotsman iPhone app, completely free to download and use