The company behind the controversial deposit return scheme is on the brink of collapse after a bitter wrangle between the Scottish and UK Governments.
All Circularity Scotland staff could be at risk of redundancy and employees may not get paid this month. Administration is also an option, according to a leaked email.
Labour MSP Sarah Boyack said: “This is an appalling way to treat staff and yet another sign of the SNP-Green government’s disastrous incompetence.
“It is a disgrace that people are at risk of losing their jobs because our two dysfunctional governments can’t work together."
Scotland’s DRS, which attempts to boost recycling rates, is in disarray over a dispute between both governments.
Conservative ministers, who effectively possess a veto on the Holyrood scheme, said it could only go ahead if glass was excluded.
This prompted the Scottish Government to delay the scheme until October 2025 at the earliest.
However, the delay has plunged Circularity Scotland, a not-for-profit company set up to ensure the smooth roll out of the scheme, into crisis.
An insider told the Record staff had been sent home on Thursday last week and employees are fearful they may not get paid.
A spokesperson for Circularity Scotland said: "The board of Circularity Scotland have been working to manage the impact of the Scottish Government's announcement and find a way for the business to continue to operate.
"While this work is ongoing, we instructed staff to go home on Thursday, June 8.
“The unfortunate reality is that, at this point, we are not able to confirm whether our staff will be paid for this month or whether they will be able to return to the office.
"The board recognises that this is an extremely difficult time for our people and is working tirelessly to find a solution. We have remained in communication with our staff throughout and will provide updates to them at the earliest possible time.”
An email obtained by the Record painted an even starker picture for the company and its 66 staff:
“We have proposed a route to members which could allow Circularity Scotland Ltd to exist 'in hibernation' until the Scottish DRS launches in October 2025.
“If stakeholders agree to fund this proposal, all employees would be at risk of redundancy and a consultation period would begin. In this scenario, it is likely that the company would be able to pay June salaries, any outstanding holiday pay and pay in lieu of notice to those made redundant.”
The firm added: “If stakeholders do not agree to fund this proposal, Circularity Scotland may go into administration. If the company becomes insolvent it may be unable to pay contractual monies due to employees - including June wages.”
The email said it anticipated the outcome of these talks would be known early next week. Circularity Scotland is funded by drinks producers.
Boyack said: “This scheme has been in chaos for months and plans should have been made for these workers before now.
“The Scottish and UK Governments must get round the table urgently to design a scheme that works so we can save these jobs and boost recycling rates.”
Under the Holyrood scheme, shoppers would pay a 20p deposit every time they buy a drink in a can or bottle, with that money refunded to them when the empty containers are returned for recycling.
Tory MSP Maurice Golden: “The SNP and Greens who have botched this scheme from the outset must have known this could happen.
“Now their inexcusable failure means good people face losing their jobs through no fault of their own.
“Lorna Slater has repeatedly failed to acknowledge her role in this farce, and it’s time for her to face up and take some responsibility.
“The Scottish Government has shrouded Circularity Scotland and the wider process in secrecy, and this is what happens when proper scrutiny and accountability cannot be applied.
“A DRS could have been launched in Scotland next year with the support of business and consumers, but the SNP-Green government preferred to pick a fight with the UK Government instead.”
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