Brighouse based recruitment agency Transline has lost its contract with online fashion giant ASOS a week after it filed a notice intending to call in administrators.
The agency provided temporary workers for ASOS’s Barnsley warehouse and distribution centre, which employs around 4,000 staff at the site.
Transline filed court papers protecting it from creditors last week after being axed as a supplier of warehouse staff for Amazon. In a statement, it said it was suffering from “tighter margins in the recruitment indus-try”.
ASOS’s warehouse operator XPO Logistics confirmed it had terminated the agreement with Transline.
The same warehouse staff are now employed by Doncaster-based PMP Recruitment.
An XPO spokeswoman said: “Following the filing by Transline of a notice of intention to appoint an administrator, we decided in conjunction with our customer to terminate the contract with Transline and appoint PMP Recruitment, thus ensuing continuous employment for workers and site operations at Barnsley.”
Transline has faced criticism from MPs over the employment practices it uses on behalf of clients, including zero tolerance and zero hours contracts.
The employment agency first came under scrutiny 16 months ago when an investigation uncovered that workers at Sports Direct’s Shirebrook warehouse supplied by Transline were earning less than the minimum wage.
It led to a deal where the retailer, Transline and another agency, the Best Connection, agreed to make about £1m available in back pay to affected workers.
However, it emerged at a parliamentary select committee hearing in March that Transline had failed to honour part of that deal, leaving workers who were paid less than the legal minimum wage without the back pay they were owed for their shifts.
The notice of intent gave Transline 10 days to raise millions of pounds to keep it afloat or face the threat of collapse.
The company said: “We have not ceased trading, and continue to have positive conversations with potential sources of investment. We are unable to comment at this time regarding specific commercial agreements. We will continue to keep all our employees and customers updated as the situation progresses.”