Questions have been raised this week over whether recruitment agencies supplying temporary workers to DPD have adequately accounted for statutory sick pay and pension contributions in their charge rates.
Internal documents seen by The Guardian, covering more than 3,000 temporary workers engaged by DPD over the past two financial years, reportedly include hourly pay, holiday pay, employer National Insurance contributions and agency margins, but do not show costs for sick pay or pension contributions.
Zoë Lagadec, principal at employment law firm Mulberry, told The Guardian that the figures raised questions over whether temporary workers were receiving Statutory Sick Pay or whether some workers were being moved on before reaching the point at which pension contributions become due.
Employment law experts are warning that logistics operators and others in the supply chain need to ensure agency labour charge rates cover the full cost of employing temporary workers.
Withholding sick pay or pension contributions when they come due would be a breach of employment law by recruitment agencies
The Association of Labour Providers (ALP) said: “Supermarkets, brands and other labour users have a clear responsibility to ensure that labour providers throughout their supply chains are paid rates that fully reflect legal employment costs and compliance obligations.”
Under current UK rules, Statutory Sick Pay is payable from the first day of sickness, while employers must generally enrol eligible workers into a workplace pension after they have been employed for three months.
Any failure by an employment agency to provide statutory entitlements when they become due could constitute a breach of employment law.
DPD told the Guardian its commercial arrangements with recruitment agencies allow them to meet their statutory obligations and are benchmarked against competitors in the industry.
A DPD spokesperson said: “At DPD, we take our legal, regulatory and ethical responsibilities extremely seriously.
“As a client, engaging third-party employment agencies, DPD pays an agreed commercial charge rate to agency suppliers for providing temporary labour.
“Under UK employment law, recruitment agencies act as the primary employers of these agency workers.
“Consequently, statutory obligations, including the administration and payment of Statutory Sick Pay (SSP) and auto-enrolment pension contributions, sit directly with the agency suppliers, rather than DPD as the end-user client.
“Our contractual agreements require all agency partners to strictly follow all applicable employment legislation, including statutory pay and pension auto-enrolment requirements.
“We continuously review our procurement processes and supplier relationships to ensure our agency partners uphold the highest standards of compliance and fair treatment for all workers.”
The allegations come four months after the launch of the government’s Fair Work Agency, which began operating on 7 April.
The agency has powers to investigate breaches of employment rights, issue civil penalties, act against labour exploitation and enforce other employment rights, such as the accurate calculation and payment of the recently improved Statutory Sick Pay and other aspects of the Employment Rights Act..
The new body brings together enforcement functions previously carried out by the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate, HM Revenue & Customs’ National Minimum Wage Enforcement Unit and the Office of the Director of Labour Market Enforcement.
DPD has been approached for comment by MT.
