Scores of Sports Direct workers who were found to have been paid less than the minimum wage are yet to receive the back pay owed for their shifts.
Steve Turner, the assistant general secretary of the Unite union, told MPs on the business, energy and industrial strategy (BEIS) select committee on Tuesday that Transline, one of the employment agencies exposed during an undercover Guardian investigation, had refused to honour part of the deal.
The agency was part of an agreement last August to award workers about £1m in back pay after it was revealed that Sports Direct workers were being paid less than the legal minimum.
The payments were to be backdated to May 2012 and could be worth up to £1,000 for some workers, union officials estimated at the time, although they expressed concern that Transline would refuse to refund unpaid wages from before it took over contracts from a rival agency, Blue Arrow, in 2014.
Turner told MPs: “Transline have refused to pay the back payment for the non-payment of national minimum wage for the period of employment that employees had before Transline took over the contract. So they are refusing to honour the transfer of undertakings regulations
“This is a huge issue. This is hundreds and hundreds of pounds for thousands of workers, where Best Connection, the other agency, has honoured the agreement and paid in full. Sports Direct has paid in full. But one agency, Transline, has decided it’s not going to do that.”
A Transline spokesperson said: “All back payments have been made to Transline employees over the period in question [2014-2016]. For those employees that worked for Blue Arrow and then transferred to Transline, we have been working with HM Revenue & Customs and are awaiting their guidance on how Tupe applies to the period that those employees worked for Blue Arrow. We will act according to their feedback as soon as this is received.”
Blue Arrow declined to comment.
The hearings were part of the BEIS committee inquiry into the future world of work, with two sessions on Tuesday specifically looking at temporary employment agencies and their workers.
While the committee heard evidence of how agencies can benefit workers and employees, particularly at times of high demand, such as Christmas, there were witnesses from within the employment agency industry who voiced damning criticisms of the sector.
David Camp, the chief executive of the Association of Labour Providers, said some operatives were “criminal” or “dodgy”.
“We rank agencies into four categories. Criminal: those who pay significantly below the minimum wage and there are many indicators of forced labour in the way they operate. Dodgy: those who seek to minimise their costs at all levels by underpaying holiday, not paying SSP [statutory sick pay], opt[ing] out of personal accident insurance schemes and so on,” he said.
“Compliant: those businesses that seek to comply with the law. And leading: those that comply with the law, have respect for their workers and aim to introduce good practice throughout.”
Camp declined to expand on how much of the industry fell into each category. However, written evidence sent to the inquiry by one agency chief executive suggested poor practices are common.
A submission by Adrian Gregory, the director of London-based recruitment agency Extraman and a campaigner against abuses within the industry, said: “Having spent 30 years in the business, I would … suggest that my particular part of the recruitment industry, that dealing with unskilled industrial staff, currently operates with little regard for the law and none whatever for any ethical considerations.
“A pernicious cocktail of inadequate, impractical and muddled legislation combined with a complete disregard for the rights and welfare of the very people, the temporary staff, who earn agencies their money has led to mass exploitation coupled with huge tax avoidance.”
The committee also heard how Transline supplies workers to retailers including Argos and Asos, both of which have been criticised over their alleged working practices.
Transline wrote to the BEIS committee last September saying it had undertaken a full review to make sure its “operations are fully compliant”.