DPD temporary workers may have missed out on sick pay and pensions, internal documents show

Missing payments suggest employment laws may have been breached by recruitment agencies used by courier company

Low-paid temporary workers at one of the UK’s top courier businesses have missed out on entitlements to sick pay and pension contributions, internal documents suggest.

The payments – typically included in the “charge rate” that large brands pay recruitment companies to supply them with temporary workers – are missing from internal spreadsheets calculating the cost of employing thousands of transient staff working at DPD.

This absence suggests workers have either not been paid their entitlements, were discouraged from taking days off when sick, or were removed from roles before pension contributions became due, experts said.

Zoë Lagadec, principal at Mulberry’s employment law solicitors, said: “This raises questions if the workers are receiving statutory sick pay – as it doesn’t make sense that nobody gets ill – or if they are being moved on before 12 weeks service in order to avoid pension contributions.”

Withholding sick pay or pension contributions when they come due would be a breach of employment law by recruitment agencies and seemingly contravenes industry guidance published by the Association of Labour Providers.

The trade body’s charge rate guidance adds : “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.

“Labour users that pay unrealistically low rates are knowingly or recklessly conniving in illegality as these rates can only be achieved through worker exploitation, tax evasion or both.”

DPD promotes itself as “one of Europe’s leading parcel groups” and is wholly owned by France’s La Poste. It says its team exceeds 15,000 people , operating more than 10,000 vehicles from 84 locations and delivering more than 260m parcels a year. Its customers have included John Lewis , Marks & Spencer and Amazon .

The Guardian has seen internal DPD records detailing the discrete costs of more than 3,000 temporary workers hired by the courier during the past two financial years. The documents include hourly pay rates, holiday pay, employer’s national insurance contributions and a margin for the temporary recruitment agency, but do not include any sick pay or pension.

Industry experts questioned whether any temporary recruitment agency, which is technically the employer of the workers, could make any profit from DPD’s charge rates if it then paid the sick pay and pension entitlements to its thousands of staff.

Sick pay is now a right on the first day’s absence, although before April it only became due after three days off. Pension contributions are paid by the employer after 12 weeks in the job.

The Guardian outlined to DPD the records seen and what they appear to show. The company said: “Our commercial arrangements with our agencies allow them to fulfil their statutory obligations and are benchmarked against competitors in the industry.”

A spokesperson for the courier company added: “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 discovery of the data comes as the temporary recruitment industry looks at how the government’s new Fair Work Agency, which came into existence on 7 April, will use its powers to enforce workers’ rights.

The agency brings together much of the existing enforcement system into a single body, by combining the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate, HM Revenue and Customs’ national minimum wage enforcement unit and the Office of the Director of Labour Market Enforcement.