City Link's 'deliberate deception' to workers highlights insolvency issues

Courier company City Link deliberately deceived employees about its financial state before collapsing, according to a committee of MPs.

The joint report published today by Parliament’s Scottish Affairs and Business, Innovation and Skills (BIS) Committees says: “City Link and Better Capital are morally, if not legally, responsible for the difficulties that many of these individuals and small business now find themselves in.”

In December 2014 the delivery firm went in to administration resulting in over 3,000 workers losing their jobs – including 1,000 self-employed van drivers and agency workers.

The report reads: “The company took a deliberate decision not to inform employees and contractors as to the true intentions and position of the company, and this was done for the financial benefit of City Link and Better Capital. This amounts to a deliberate deception by omission.”

Ian Davidson MP, Chair of the Committee, says: “We are dismayed that, although it was clear for some time that there were serious questions over the ability of City Link to continue trading after December 2014, small businesses and self-employed drivers working for City Link were encouraged to take on additional costs, despite the company being aware that there was a strong possibility that they would not receive payment for a significant part of their work in December.”