WORKERS sacked by collapsed Coventry parcel firm City Link could share a compensation payout totalling more than a million pounds, lawyers say.
All claims have now been lodged with a tribunal after it was revealed earlier this month former staff are to sue.
City Link sacked around 2,500 warehouse workers, drivers and other staff on New Year’s Eve – with many discovering their fate on Christmas Day.
Claims to employment tribunals have been lodged on behalf of 250 former staff, including more than 60 who were based at the Coventry HQ in Siskin Drive Parkway near Coventry Aiport.
Employment lawyers Morrish Solicitors say the claim centres on the firm’s failure to properly consult its workforce over redundancies.
The firm, which was owned by private equity firm Better Capital, reamins in administration and is subject to an ongoing investigation.
A statement from the law firm says: “When a company intends to make more than 100 staff redundant there is a statutory period for consultation of 45 days.
“As City Link did not properly consult their staff, they now have claims for a Protective Award, which can provide compensation of up to 90 days’ gross pay, in addition to any redundancy or notice pay they may have already received no matter what their length of service.”
David Sorensen, partner at Morrish Solicitors said: “The team at Morrish Solicitors are working hard on behalf of the ex-City Link employees to gain compensation after the firm went into administration on Christmas Eve.
“The claim has now been lodged with the Employment Tribunal and once the claim has been processed, it will be sent to City Link’s administrators.
“They will have 28 days from receipt of the claim within which to lodge a formal response and this will confirm whether the claim is admitted or whether the administrators on behalf of City Link intend to defend it.
“Whilst the tribunal process has only just started early indications are that each employee may recover several thousand pounds depending on how the case proceeds, but it may be several months before the final hearing will take place.”
Coventry South Labour MP Jim Cunningham was among MPs who called for a change in the law to protect self-employed workers, and prevent the taxpayer having to pick up redundancy bills in such circumstances at the expense of secured creditors like Better Capital.
A report from MPs on the Scottish affairs committee this month concluded workers including technically self-employed van drivers and contracted agency staff had been deceived by the company.
While the company’s financial difficulties had been known, City Link contractors had been encouraged to take on extra staff and work longer hours in the run-up to Christmas for which they were not paid.
The report said City Link deliberately failed to inform employees and contractors of its true intentions and position.
Jon Moulton, the founder of Better Capital, denied Better Capital had deliberately deceived workers.
He said Better Capital did what it could to save jobs. He has told a committee of MPs the company lost money as a lender to City Link.
He claimed there was no benefit to City Link continuing to trade in the days before Christmas.