Mike Ashley faces panel of MP’s
  • 21st Jun 2016

Sports Direct’s Mike Ashley faced some difficult questions when he was required to appear before a panel of MPs investigating his firm’s treatment of its workers.  In what must have been an uncomfortable experience for the director of the multi-million pound business, he admitted that the company had been in breach of employment law. 

 

During the grilling, Mr Ashley admitted that at a “specific time” Sports Direct effectively paid workers less than the minimum wage because they were held back at the end of their shift and searched by security before leaving the company’s warehouse.   The company’s practices allegedly resulted in a number of staff being paid £6.50 an hour, rather than the minimum rate of £6.70 an hour.  This may potentially have saved the FTSE 100 firm millions of pounds a year at the expense of a number of minimum wage earners. 

 

As a result of the admission, the Company is likely to face large fines.  Furthermore, the admission may mean that Mr Ashley may also face the prospect being disbarred as a company director.  Mr Ashley also conceded that it was “unacceptable” for the company’s workers to be docked 15 minutes of pay for being 1 minute late for work.

 

The committee also heard from Steve Turner,  Assistant General Secretary of the Unite Trade Union.  He said there was “arrogance and contempt at the top of Sports Direct and that it’s approach to working practices was a determined business model”.  Luke Primarolo, regional officer at Unite, who has led a campaign highlighting the working practices at the firm, referred to a culture of fear at the Sports Direct warehouse.  “People are scared because they are working under a system when they know they could lose their employment at any moment,” he said.  

 

MPs were also told that some staff received their wages through a pre-paid card.  Where staff were charged £10 to get a card, plus a £10 monthly management fee, 75p to use it at an ATM machine and 10p when they got a text message confirming they had used it.  The Company has also been criticised for its widespread use of agency staff. 

 

Mr Ashley has announced that there will be an internal review of the retailer’s working practices and that he will lead this personally, including a review of the controversial “six strikes and you are out” policy where staff were dismissed where they had six black marks against them within six months.   Mr Ashley has also said there will be a pay rise for staff which the company said would cost it £10m.