Employees at a Scottish waste disposal firm that is under criminal investigation have been laid off, after the company lost nearly 20 health service contracts.

Staff at Healthcare Environmental Services (HES), based at Shotts in North Lanarkshire, and which employs 400 people UK-wide, were told on Thursday morning they were being made redundant with immediate effect.

They were called in after being sent text messages shortly before Christmas warning they were not likely to be paid this month because the company’s bank, HSBC, had refused to release money.

Body parts scandal firm claims it warned of incinerator shortage Read more

HES appears to be on the brink of closing down following months of controversy over its handling of contracts to dispose of clinical waste, including human body parts and infectious waste, for NHS trusts and boards around the UK.

Its contracts for 17 English NHS trusts were terminated after huge backlogs of unprocessed waste were found at its depots, which are spread across the UK.

The NHS in Scotland said its contract, which covered every hospital, GP surgery, NHS pharmacy and dentist in Scotland, would not be renewed in April 2019. In early December, HES claimed it had been locked out of Scottish hospitals and prevented from taking away waste.

The Environment Agency for England has begun a criminal investigation over the unauthorised backlog of waste at its depots, which were at levels far beyond HES licences. It had taken enforcement action against HES 15 times in the past year.

By early December, it is thought HES had stopped collecting waste from at least 25 NHS trusts. The Department for Health transferred its contracts to another supplier, Mitie, while hospitals have installed extra refrigeration units and shipping containers to store uncollected waste.

Garry Pettigrew, the company’s managing director, has repeatedly insisted the firm had done nothing wrong and blamed a nationwide shortage of incinerator capacity and government inaction for the crisis.

In a letter to staff on Thursday, Pettigrew said: “I write to you to inform you that your position in the company will be made redundant with immediate effect. I apologise that there have been no previous consultations on this matter, however there are unforeseen circumstances that have proven to be out of our control.”

It remains unclear how many of HES’s 400 employees have been laid off. The company’s communications director, Graham McColl, was one of those made redundant without warning on Thursday while he was on leave.