Swiss multinational staffing agency Adecco on Thursday saw its bumper profits overshadowed by problems at its Norwegian unit, which is accused of breaking labour law.
Several Norwegian municipalities have recently opted not to renew their contracts with the health branch of Adecco Norway following media reports at the end of February alleging numerous cases of illegal working conditions.
Adecco reportedly let its temp staff, at their request, work massive amounts of overtime while not being adequately compensated.
In one Oslo nursing home, Adecco reportedly allowed its temp employees to work up to 84-hour weeks without overtime pay, and staff reportedly slept in the establishment's basement to be able to squeeze in more working hours.
Following the reports, Adecco Norway acknowledged breaches of the country's labour laws in health care centres, some of which have dropped their contracts with the Swiss firm.
"Our management, our top management, was not aware of it. The people who are involved and that were aware of it, we let go," Adecco's chief executive Patrick de Maeseneire was quoted as saying by public broadcaster NRK.
Adecco later told Norwegian daily Dagbladet that its chief executive's comments referred to the head of Adecco Norway's healthcare unit, Baard Kristiansen, who announced his resignation on February 24.
With local elections in September, the case has taken on political tones in Norway where the left and right disagree on how are private companies should be allowed to provide healthcare.
Norway's Labour Inspection Authority has asked police to open an investigation into the case.
Adecco Norway held a news conference Thursday and promised to fix the situation.
"Let me make this clear: everyone will retroactively receive the overtime payment they are entitled to," the head of the group Anders Oewre-Johnsen said, according to news agency NTB.
The scandal erupted as Adecco on Thursday reported soaring results in 2010, with a net profit of €423 million ($587 million) up from just eight million euros a year earlier.