The employment agency that staffs Sports Direct’s (LON:SPD) largest warehouse is on the brink of collapse after failing to secure new financial investment.
Trouble faced by Transline comes following the 2015 Guardian investigation at Shirebrook warehouse where Sports Direct employees were paid less than the national minimum wage.
It was in this investigation it was found that employees face a ‘six strikes’ policy, leaving staff fearing for their jobs if, for example, if bathroom breaks were too long.
Founded in 1989, Transline has faced regular criticism from MPs over its employee welfare.
“The company has suffered as a result of a continued move to tighter margins in the recruitment industry,” said a Transline spokesperson to Sky News on Wednesday.
“We are close to securing inward investment that will allow us to drive forward with continued growth and infrastructure development and has lodged the Notice of Intention to protect the business, our employees and our customers as we complete this process.
“The welfare of our staff and our relationships with our customers are of paramount importance, and we are continuing our service and operations as normal.”
Since the investigation, the agency agreed to back pay of £1 million to affected workers. News came out last month at a parliamentary select committee hearing that Transline has failed to carry out this agreement and affected employees are so far left without back pay.
Labour MP and chair of the House of Commons business, Iain Wright, called on Sports Direct’s founder Mike Ashley to consider axing Transline, which he said had not been candid about the reasons for its lack of an operating licence from the Gangmasters Licensing Authority.
Amid even more bad news for the agency, Transline was also axed from supplying warehousing staff to Amazon.
Gross profit margins fell from 11.2 percent in 2014 to 10.1 percent the following year. The company blamed the “difficult trading conditions caused by increased competition in the sector and increasing wage costs”.