The REC is writing to Dr Vince Cable, Secretary of State for Business Innovation and Skills and his Labour Party shadow Chuka Umunna, calling for a full government inquiry into the behaviours and decisions made by City Link and its directors in the run up to its insolvency.

Several recruiters have been severely affected by the collapse of City Link over Christmas. One REC member reports being owed more than £120,000 for unpaid services and another, an SME, says they have been left with an unpaid bill of £80,000.

REC chief executive Kevin Green says:

“We think this needs a full inquiry because we are concerned as to why City Link was still taking on temporary workers in the run up to Christmas.

“Agency workers will not be left out of pocket for work they have done as the employment business will pay them regardless of City Link’s collapse. But that means some of our members are severely disadvantaged by a significant negative impact on their bottom lines.

“At no point was it obvious that closure could be on the cards as City Link’s demand for temporary agency workers in the run up to Christmas was very high, which is now surprising given the financial situation of the company.

“It is not so easy for our members to recoup their losses and whilst they have registered their interests with the administrators, we realise that our members’ interests are part of a very long list.

“We believe an inquiry is the best way of ascertaining how to avoid a repeat of this situation.”