Sports Direct should consider severing all ties with its controversial employment agency because the owners may not be “fit and proper” to run the business, a group of MPs has warned.
Transline supplies thousands of workers to Sports Direct’s Shirebrook warehouse, where staff had been illegally paid less than the minimum wage, in a £20 million contract.
The Commons business select committee said on Tuesday that bosses deliberately misled parliament and are still refusing to admit any wrongdoing in answers they gave to parliament.
Bosses from Transline appeared earlier this year as part of an inquiry into working conditions at the high street chain, alongside Sports Direct’s founder Mike Ashley.
In a report the committee claimed that Transline had misled parliament over answers it gave about a licence the company lost to provide workers to the food production industry.
The committee demanded Transline respond to allegations that it lied about the contract within 14 days of publication.
However, letters published on Tuesday shows that Transline refused to apologise and accused the committee of bias against them.
In an explosive letter, signed by finance director Jennifer Hardy, who appeared at the committee, she said her answers were “not deliberately misleading” [bold and underline added by Transline].
She added: “We were astounded to read the published preliminary conclusion reached by the committee… Having now had the opportunity to consider the situation and revisit the evidence which we gave to the committee we remain astounded and extremely saddened by the inaccuracy of the committee’s preliminary conclusion on this issue and the apparent bias shown by the committee in their published report.”
The issue centres around the Gangmaster’s Licencing Authority (GLA), which issues licences to companies to provide workers in food and drinks manufacturing.
According to the committee, Transline supplied workers in the sector without a licence in 2013 and subsequently was refused a new licence. Transline claimed there was an “administrative error”, later clarifying that the company decided to stop the application process because the GLA requests for information were “unreasonable and disproportionate”.
In response to Transline’s letter, committee chair Iain Wright MP accused agency bosses of failing to address the issue of supplying workers without a licence and said unless the company was more honest and open with parliament he could be forced to recommend that the directors are not fit to run a company.
This could, in turn, lead to them being banned from being directors of any UK business.
“We on the committee are very keen to see improvements to working practices at Sports Direct. Mike Ashley says he is committed to making conditions better for staff at Shirebrook," he said.
“If he means what he says, he could start by cutting his ties with Transline Group who have not been candid or credible in their evidence to the business committee and, as we heard in our evidence sessions, have deducted money from low-paid workers without proper explanation and justification.
“I would expect other companies using Transline Group will want to think seriously about using a company that treats their workers and conducts its business in this way”.
The BIS committee has called on Transline to respond urgently to the questions. And in a letter to the company, Wright added that without a response “it would leave the committee with little choice but to seriously consider concluding and reporting to the house that Transline’s directors are not fit and proper to run the company.”
He also wrote to Ashley recommending that Sports Direct end its relationship with Transline – a relationship that has never had a formal contract drawn up, according to another report commissioned by Sports Direct into working practices.
The latest spat comes as BuzzFeed News revealed Transline was forced to pay HMRC £370,000 as part of an investment in a film partnership scheme which the taxman said was a tax avoidance scheme.
And last week Sports Direct said it had asked Transline to scrap a "six-strikes-and-you’re-out" policy for warehouse workers, which see staff disciplined for “excessive toilet breaks” and taking time off to look after sick family member.
Ashley admitted the rules had been “too blunt” and immediately suspended it.
Simon Neville is business editor at BuzzFeed UK and is based in London.
Contact Simon Neville at firstname.lastname@example.org.
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