UK GP acquitted for breaching labor laws

Better Capital’s Tom Wright was found ‘not guilty’ for failing to report redundancies before the collapse of struggling portfolio company City Link last year.

Tom Wright, assistant director at private equity firm Better Capital, has been acquitted of breaching employment laws after failing to notify UK authorities about redundancies at portfolio company City Link before the parcel delivery company collapsed on December 24, 2014, according to a report in the Coventry Telegraph.

The UK Department for Business, Innovation and Skills accused Wright, along with City Link directors David Smith and Robert Peto, of failing to give notification of the 2,356 redundancies to the Secretary of State for Business.

Better Capital’s closure of City Link resulted in more than 2,500 job losses. In a hearing at Coventry Magistrates' Court, the prosecution alleged that Wright, Smith and Peto should have known job losses were inevitable or near-inevitable due to the parcel company’s “hopelessly” insolvent state, the Telegraph reported.

However, the three defendants argued that a £17 million ($25.8 million; €24.1 million) sale of City Link had been under negotiation, and so it was not inevitable that the redundancies would take place. Deputy district judge David Goodman dismissed the charge.

“A director cannot be expected to put a crystal ball on his or her desk at a time of huge shock and turmoil, and predict the likely consequences of an action, unless a consequence is either the only foreseeable one or is the only consequence that can be reasonably envisaged,” deputy district judge David Goodman reportedly said in his verdict. “The defendants say that the redundancies were not the only foreseeable consequence, nor even in their view the most likely one because they believed the business could be sold.”

The verdict will provide some reassurance to GPs, who may be less likely to be held liable for unforeseen losses.