Company bosses says they are working to get the firm “back on track” as it faces financial difficulties.
The Ama Group in Peterlee, which employs 60 people, has admitted it is dealing with hardship with its cash flow.
Unfortunately, we have struggled to access funding support which has made it incredibly hard, coupled with a large gap in production in January and February.Spokesman for the Ama Group
A source has claimed the management team are not following employment laws and there have been issues paying staff.
A spokeswoman for the AMA Group, said: “Our number one priority is our employees and we are doing everything we can to safeguard their jobs.
“Unfortunately, we have struggled to access funding support which has made it incredibly hard, coupled with a large gap in production in January and February.
“However, we are determined to turn things around and are speaking to organisations across the North-East to see if there are any pots of cash we can tap into, or alternatively, business loans or private equity investors.
“This would enable us to get the company back on track, as we have a full order book in the coming months.”
A source said: “The majority of staff are middle aged women who have homes to run and rent or mortgages and other bills to pay which can’t be paid as they don’t get paid.
“Secondly they have been given a three week period of no work with reduced pay.
“No where in their contracts does this state this can happen and every employee is too scared to say anything.”
The Ama Group was made aware of the claims, but said it did not wish to respond further.
Last March, the company announced it was going to take on a dozen new staff to bring its workforce up to 100 people during 2015.
At that stage it had 55 workers, who were helping it fulfil orders from Tesco, Fred Perry and many more national and independent brands.
The AMA Group is based at Whitehouse Business Park in Peterlee.