Internal records covering more than 3,000 temporary workers used by DPD have raised questions over how recruitment agencies supplying labour to the parcel group account for statutory sick pay and workplace pension costs.
The records, covering the past two financial years, reportedly detail hourly wages, holiday pay, employer National Insurance contributions, and agency margins, but do not separately show costs for sick pay or pension contributions.
The workers are employed by recruitment agencies rather than directly by DPD, making those agencies responsible for administering relevant statutory entitlements. DPD has said its commercial arrangements give suppliers sufficient funding to meet their legal obligations and that its rates are benchmarked against competitors.
The company has also said contracts require agency partners to comply with employment law, including statutory pay and automatic-enrolment pension requirements, and that it reviews procurement processes and supplier relationships.
The records do not establish that individual workers were denied an entitlement. They do, however, raise questions about how employment costs are reflected in labour-supply contracts and how large businesses obtain assurance that legal requirements are being met within outsourced workforce arrangements.
DPD operates at substantial scale in the UK, with thousands of employees and drivers across a national depot and distribution network. Parcel businesses depend heavily on flexible labour to manage fluctuating volumes, particularly around seasonal peaks.
That flexibility creates a detailed procurement challenge. An end-user business can contract with an agency at an agreed hourly rate, but the charge ultimately has to cover wages, holiday entitlement, employer taxes, statutory payments, pensions where applicable, administration, and the agency’s margin.
Pressure on commercial rates can therefore increase the importance of monitoring whether suppliers have allowed sufficiently for all statutory employment costs.
The legal environment has also changed. From April 2026, Statutory Sick Pay became available from the first qualifying day of sickness rather than after a waiting period, increasing the relevance of sick-pay administration within temporary and outsourced labour models.
The government’s wider employment reforms have also brought enforcement functions together through the Fair Work Agency, increasing attention on compliance where responsibilities are divided between employers, agencies, contractors, and end-user businesses.
Temporary labour arrangements can be difficult to oversee because the organisation directing day-to-day activity may not be the worker’s legal employer. That distinction becomes more complicated where thousands of people are supplied through multiple agencies across numerous sites.
Automatic pension enrolment adds another layer. Eligibility depends on factors including age and earnings, meaning not every temporary worker necessarily generates an identical pension cost. Sick-pay expenditure also varies according to eligibility and actual absence.
The absence of a separate line item in a cost record therefore cannot be treated as evidence that statutory payments were withheld. The governance issue is whether the contracting organisation can demonstrate that suppliers have priced and administered their obligations correctly.
Businesses can use contract provisions, audits, payroll checks, worker feedback, supplier accreditation, minimum pricing assumptions, and escalation procedures where a commercial proposal appears inconsistent with statutory employment costs.
Large organisations can also face reputational consequences even where formal legal responsibility rests with another employer. Employees, customers, regulators, trade unions, and investors increasingly assess working practices across wider supply chains rather than drawing a narrow distinction between directly employed and agency labour.
The issue is becoming more prominent as employment reforms expand protections while many employers continue to use temporary workers and contractors to preserve operational flexibility.
Logistics businesses have a particular exposure because labour remains one of their largest operating costs and parcel volumes can change quickly. Maintaining enough permanent capacity to meet peak demand can be expensive, while relying heavily on agency labour increases the importance of supplier oversight.
Agency models remain an established way to manage that volatility, but their commercial value depends on lawful employment being fully reflected in the price of labour.
DPD’s position is that its agreements provide sufficient funding for agencies to meet their obligations and require them to do so. Further scrutiny is likely to centre on how those contractual requirements are evidenced in practice across a large temporary workforce.
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