Across the road from the new bus station in the north Nottinghamshire town of Mansfield stands a recently erected retail and office development. The facility houses modern bars and restaurants on the ground floor, while white collar workers tap away on computers on the storeys above.
For some, the zone is viewed as an uncontroversial symbol of how the town is emerging from the depression that afflicted the area following the bitter miners’ strike of the mid 1980s and the subsequent closure of the local pits. Yet inside this new facility is one of 100 regional offices of a once-obscure employment agency, which after years of operating in relative anonymity is suddenly becoming significantly better known.
Transline Group supplies temporary workers to some of the UK’s best-known brands – from Amazon to Argos. But it is its relationship with Sports Direct – serviced from that office in Mansfield – that has made the group’s name.
Last year, an undercover Guardian investigation exposed how workers at Sports Direct’s warehouse in Shirebrook, Derbyshire were being paid less than the legal minimum wage. The exposé resulted in the sports retailer and its employment agencies – Transline as well as its rival, The Best Connection – being forced into making backpay of around £1m to short-changed minimum wage workers, as well as some of the main protagonists being hauled in front of a parliamentary select committee hearing.
Many of the MPs’ conclusions were contained within a damning report on the working practices at Sports Direct that was published in July. But on Tuesday the parliamentarians added that Transline had not been candid when giving evidence to the committee and that the retailer should end its relationship with the agency.
In a letter to Mike Ashley, Sports Direct’s majority shareholder, Iain Wright, the chairman of the Commons business, innovation and skills (BIS) select committee, said: “We ask you to think seriously about continuing to use Transline, a company that treats their workers and conducts its business in a way that is inconsistent with your own aspirations for Sports Direct to be on a par with likes of Selfridges and John Lewis.”
The BIS committee also warned Transline that it was considering reporting to the Commons that the company’s directors were not fit to run the company because of concerns about its dealings with Gangmasters Licensing Authority (GLA), which regulates agencies supplying staff to the food and drink processing sector.
So what is this company and who are these directors?
Transline was co-founded in 1989 by Paul Beasley, 49, and Jonathan Taylor, 48, who, along with a third director, 48-year-old sales boss Mark Elms, each own 5% of the company.
The remaining 85% of the equity in the business, which is registered as Qualitycourse Ltd, is held by another director Colin Beasley, 72. The company refuses to explain what the relationship is between Paul and Colin Beasley.
The group’s growth has been against a backdrop of many major employers outsourcing the hiring of much of their workforce, thereby eradicating costs such as having a human resources department.
However, the arrangements have been heavily criticised, with workers and unions frequently complaining that they allow companies to bypass employment rights – while workers often seem to fear instant dismissal.
However, the structure appears to work well for some. Between them, the four Transline shareholders received dividends of £100,000 in 2014 and £117,000 in 2013, with the highest paid director – presumably one of the joint chief executives Paul Beasley or Taylor – earning £177,942 in 2014 and £575,862 in 2013.
In 2014, the most recent year for which Transline accounts are available, the company made a pre-tax profit of £675,000 on a turnover of almost £180m.
The year before, it booked profits of £1.7m on revenues of £110m and sales appear to have risen again in 2015. At the select committee hearing in June, Transline’s representatives told MPs that it charged Sports Direct “in excess of £20m” – which it said accounted for about 10% of its revenues.
All of which represents a decent business for Transline, based in Halifax, West Yorkshire.
The accounts show that Paul Beasley had loans from the company totalling £692,000 at the end of 2014, while Taylor was in debt to his own firm by £448,000.
But while those years look good from an accounting perspective, they were less so for the group’s reputation. It is the events of that period that have landed Transline in trouble with MPs.
During the parliamentary hearings, a 2013 failure to renew its licence with the GLA was described by Transline finance director Jennifer Hardy as a voluntary move, as the company had ceased to supply the sector.
The GLA disputes Hardy’s version of events, however, claiming Transline directors were not “fit and proper” and that the company had traded without a licence during 2013.
Furthermore, as part of its investigations, the GLA examined the payslips of six Transline workers, whichshowed that they were paid less than the hourly national minimum wage (NMW) rate before the Sports Direct scandal was exposed.
In a letter sent to Transline in March 2014, which was titled “Licence Application Decision”, the GLA said: “Of these six workers on the scheme five have received under the NMW some of them significantly so.”
The employment agency argues the select committee was biased against Transline and said it was “astounded and extremely saddened” to read what it said were inaccurate critical comments about its operation and evidence.
A Transline spokesperson said: “We have always provided accurate information to the select committee and are focused on supporting Sports Direct in reviewing and implementing recommendations and actions from the working practices report. We will continue to offer clarity and any further information necessary to the committee.
“Obviously we find Iain Wright MP’s statements and summary disappointing, however we will prioritise responding to the latest correspondence in a full and concise manner, within the requested timescale.
“It is inappropriate and unjust to make such statements [about directors not being fit and proper], which is why Transline is taking legal advice”.
