135 staff across the region have been told they face redundancy after the delivery firm City Link went into administration. The RMT Union says talks broke down last night and administrators have confirmed many staff could lose their jobs within the next few days.
The company has depots in the North East and North Yorkshire .
As Kenny Toal reports, as well as full time staff, it employs many subcontractors who are also owed thousands.
A member of staff from City Link in the North East has told ITV Tyne Tees they still haven't been officially notified that the company has gone into administration.
The worker says staff were made to work beyond their hours delivering parcels on Christmas Eve and many times in the run up to Christmas.
News of the administration began to reach staff via word of mouth on Christmas Day but no official confirmation has been made. Workers are attending a meeting at the depot at 7am on Monday.
Administrators for the delivery firm City Link have confirmed they anticipate a substantial number of redundancies in the coming days. EY has been working with City Link since November and were appointed as administrators on Christmas Eve.
The firm says it is assessing the status of existing orders and that will determine the timescale of redundancies. It believes a portion of employees will be kept on for up to three months.
City Link's insolvency means it won't be able to meet redundancy payments and staff will be offered support in making claims from the Government statutory scheme.
The RMT Union has accused City Link of deliberately withholding news of the insolvency. EY says it was asked to take steps to prepare for administration on December 22 but the company continued to trade in order to deliver a significant number of parcels in the run up to Christmas, avoiding disruption for customers. This also enabled some payments to be made to suppliers.
The administrators say they're cautious about the prospect of finding a buyer for the firm after a previous attempt failed.
The RMT Union claims 'a truly horrific catalogue of mismanagement' has led to the redundancy threat to more than 2000 City Link staff.
The Union says a meeting with City Link and administrators Ernst and Young yesterday exposed the mismanagement at the top of the company dating back to November.
The Union claims the firm will not be paying redundancy to staff who will have to apply to the government scheme and sub contractors, who are owed thousands of pounds, are unlikely to see any of their money.
The RMT says the company had been working with insolvency advisors since November but failed to tell staff or unions. It also deliberately withheld news of the insolvency from the 22nd of December, an announcement was planned for Boxing Day but had to be brought forward when the RMT discovered the plot from a whistleblower.
The RMT is demanding an immediate meeting with Vince Cable and his officials and a government supported rescue plan to save the company as a going concern.
"It is crystal clear from today's meeting that there has been a truly horrific catalogue of mismanagement at City Link and that staff and their union have been starved of basic information while a plot was hatched to publicly collapse the business on Boxing Day when in fact it was already declared insolvent.
What a despicable and callous ?manipulation of thousands of workers and their livelihoods over Christmas. Vince Cable has said he will meet us in the New Year. Clearly that is too late and the business will have been smashed to pieces by then as the asset strippers hover like vultures over the corpse.
If the government can nationalise the bankers then they can nationalise City Link which is clearly in the public interest. "
Two thousand staff are facing redundancy on New Years Eve with a skeleton staff kept on for a couple of weeks to wind down the operation.
135 staff are based at three depots in the North East, at Leeming in North Yorkshire, Belmont in Durham and Wardley in Gateshead.
28 people are based in Carlisle.
More than 2000 City Link workers will lose their jobs on New Year's Eve according to the RMT Union.
135 City Link staff are based at depots in the North East.
- Gateshead - 45 staff
- Durham - 56 staff
- Leeming - 34 staff
The RMT held crunch talks with City Link administrators Ernst and Young yesterday in a bid to hammer out a deal to prevent thousands of redundancies.
But after being locked in discussions all day, union bosses said they are no closer to a deal.
They have urged Business Secretary Vince Cable and the Government to step in immediately to help broker a rescue package to salvage the jobs.
"We want to put a plan together for a Government-backed rescue that protects the business and the jobs it supports. If the Government can nationalise the bankers then they can nationalise City Link, which is clearly in the public interest."
Councils should encourage shops to install free cash machines by offering business rate discounts, a Government Minister has said.
Local Government Minister Penny Mordaunt said that small shops often struggle with local rates payable on cash machines, so giving them an incentive to install free machines would help their businesses and consumers facing fees at the same time.
Ms Mordaunt said: "People should not have to pay through the nose to access their cash. Free-to-use cash machines are a vital service that we are asking councils to take seriously."
The suggestion was welcomed by the Association of Convenience Stores, which said half of local stores now contained an ATM.
Despite the growth of cashless payment systems many small stores still rely on cash. But machines in shops can often charge fees of several pounds to users no matter how big the withdrawal.
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