Workers sacked by City Link are finally going to get compensation - but it is the taxpayer not the firm paying the bill.
An employment tribunal in Leeds ruled on Thursday that the workers should receive a payment of at least eight weeks’ wages after the parcel delivery firm went bust.
City Link was owned by investment firm Better Capital. It called in administrators on Christmas Eve 2014 after declaring “substantial losses.”
The company employed 2,727 workers at 60 depots nationwide. Most lost their jobs on New Year’s Eve 2014 but received no redundancy pay.
Transport union RMT pursued claims for financial compensation for its members at City Link.
But because the firm went into liquidation, the payments will come from the taxpayer-funded Insolvency Service.
Some companies going into liquidation have deliberately failed to comply with employment legislation on redundancy procedures. They know that, if they are found guilty of breaking the rules, the taxpayer has to foot the redundancy bill, rather than their directors or shareholders.
The tactic has been repeatedly condemned by trade unions, including Solidarity.
RMT general secretary Mick Cash said: “Although this is clearly a victory for the City Link workers, it remains a scandal that the tab will be picked up by the taxpayer and that those responsible for driving this company into the ground walked away without any financial penalty.
“The union has stood by our City Link members from the start and we have pursued action on their behalf through all available channels.
“It is sickening that the current balance between the workforce and corporate greed is so heavily weighted in favour of the bad bosses.”