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."
Nick Forbes, leader of Newcastle City Council, says any proposals to reduce services are still subject to a public consultation. One of the areas being looked at is the Sure Start scheme, which triggered a protest in the city today.
A protest march was held in Newcastle today to oppose any cuts to a support and advice service for parents in the city. The Sure Start scheme is being reviewed by the city council as part of plans to reduce spending.
ITV Tyne Tees investigates just how easy it is to get hold of legal highs and reveals exactly what chemicals are contained in them.Read the full story ›
Berwick MP Sir Alan Beith and North Yorks Tory Julian Smith join Paul Brand to discuss coalition tensions, and the demand for foodbanks.Read the full story ›
On tonight's political programme from Westminster, Paul Brand and his studio guests discuss the battle lines being drawn between the Coalition parties following the Autumn Statement, as they prepare for the General Election.
Also in the programme; the Archbishop of Canterbury has backed a parliamentary report this week, calling for a united effort to end hunger. Tonight's panel considers the reasons for the growing demand for foodbanks, and the steps needed to tackle food poverty.
You can watch Around The House tonight (Thurs 11 Dec) on ITV at 11.40pm.
A company on Teesside says it aims to take on five thousand new trainees across the UK, after the Chancellor's decision to free companies from paying National Insurance contributions for apprentices.
George Osborne was in the North East to highlight how he's investing in the region, as part of his plans to create a so-called northern economic powerhouse.
But as Dan Ashby reports, the Government is going further into debt than it hoped - to pay for it.
The Chancellor George Osborne has promised four million pounds over four years to a new grant-giving body for charities across the North East.
The Virgin Money Foundation will be established early next year.
During a visit to the region, he has also announced that Newcastle University will become the national centre for the science of ageing.
He says the Government is investing twenty million pounds here to try help create a northern economic powerhouse.
This report from Dan Ashby.