Transline, the controversial employment agency, has been bought out by rival Russell Taylor Group after falling into administration.
The agency, which supplies workers to Sports Direct’s warehouse in Shirebrook, got into financial difficulties after losing several clients, including Amazon and Asos, in recent months.
Clare Boardman and Daniel Butters, of Deloitte, the business advisory firm, were appointed as administrators on Thursday.
They said they had overseen an immediate sale of the business and certain assets to NMS Projects, part of the Russell Taylor Group, as part of the pre-pack administration. Under the sale all Transline employees will transfer to NMS immediately.
When it entered administration, Transline employed 5,560 staff, including about 40 at its head office in Brighouse, West Yorkshire.
Boardman said: “Following a period of uncertainty and what turned out to be a poor Christmas trading period, the conclusion of the sale is an excellent outcome for all involved.
“This will safeguard the employment of the remaining workforce, which is significant. We thank customers and staff for their patience during this difficult period.”
Ben Russell, group chief executive of Russell Taylor Holdings – which recruits for construction, engineering, warehousing and manufacturing – said: “Transline has been a growing force within the industrial recruitment industry for nearly three decades.
“The industrial recruitment industry has faced pressure due to the exponential growth of the UK e-commerce sector and the experience and quality of the Transline team and its investment in compliance and infrastructure will ensure the business reaches its future potential.”
The buyout comes after Transline had a tough 18 months after the publication of a Guardian investigation into pay and conditions at Sports Direct’s warehouse. An HMRC investigation followed, which resulted in a deal where the retailer, Transline and a second agency, the Best Connection, agreed to stump up about £1m in backpay to affected workers.
It emerged at a parliamentary select committee hearing in March that Transline, which supplied about half the workers at Shirebrook, had failed to honour part of that deal, leaving scores of workers who were paid less than the legal minimum wage without the backpay they were owed.