ARZ Management Limited, a Southampton-based recruitment firm has had its Gangmasters and Labour Abuse Authority (GLAA) licence revoked after inspectors uncovered a host of issues which exposed its workers to exploitation.

The recruitment firm, which specialises in the placement of candidates in permanent, contract, temporary and interim positions with clients around the UK, was found to have contravened the GLAA’s licensing standards 11 times following a compliance inspection in 2017. Four of these breaches were serious enough on their own to cause the business to fail the inspection.

ARZ will now have to close or face criminal prosecution if it continues to trade.

GLAA inspectors found both the managing director Jamil Ansari and proposed principal authority Michal Chalimoniuk to be not ‘fit and proper’.

“Neither was deemed capable of holding a GLAA licence as they failed to demonstrate any understanding of the licensing standards or even how their business was run,” the GLAA stated.

According to the GLAA, the inspection also revealed serious issues over pay and conditions. Workers were being paid their wages into third party bank accounts and not receiving payslips. Some also reported that the owners of the bank accounts were deducting money before passing the wages on.

Two individuals were found to have been receiving multiple workers’ wages and there were concerns that they were controlling the finances of some of the employees. Many workers were also not provided with copies of their contracts and were not given the correct amount of annual leave or holiday pay.

Other critical issues over paperwork and workers being transported in under-insured vehicles were also identified by the GLAA.

The GLAA may revoke a licence if an inspection produces a score of 30 or more points. ARZ Management Ltd recorded a score of 184 points, over six times the maximum limit for compliance.

ARZ Management Ltd initially contested the GLAA’s decision but withdrew its appeal shortly before a hearing was scheduled to take place.

GLAA Head of Licensing Charlotte Woodliffe, commented, “We were very concerned that workers were being exploited and at risk of abuse because of this company’s serious non-compliance. The GLAA exists to support businesses who comply with our licensing regime. However, we will not hesitate to act when employers behave with complete disregard for the licensing standards, putting potentially vulnerable workers in danger of exploitation in the process.”

Acting as an unlicensed gangmaster is a criminal offence which carries a maximum penalty of ten years in prison and a fine.

Staffing Industry Analysts reached out to ARZ Management for comment but the company has not yet responded.