A House of Commons committee has recommended that the Gangmasters and Labour Abuse Authority (GLA) “seriously consider looking into employment practices at Sports Direct”.
The report by the House of Commons Business, Innovation and Skills committee follows an investigation into labour practices at the company’s Shirebrook warehouse as well as its retail stores.
A Sports Direct spokesperson said: “We will study the contents of the committee’s report very carefully. It is our policy to treat all our people with dignity and respect. We are pleased to see that the committee has recognised Mike Ashley’s commitment to engage in addressing any shortcomings in the working practices at Sports Direct.”
Mike Ashley, Sports Direct’s executive deputy chairman and founder, was questioned by the committee prior to publication of the report.
The report says that the ‘extended remit of the newly-named Gangmasters and Labour Abuse Authority, in October 2016, will include warehouses such as Shirebrook’, and that an examination by the GLA would help ‘ensure that they are compliant with the relevant legislation’.
A number of other conclusions were outlined in the report. The committee welcomed Ashley’s commitment to reviewing a “six strikes and you’re out” policy within 90 days.
The report said: “Sports Direct pays two agencies approximately £50 million a year to employ workers on site. The oral evidence we received from the two agencies exposed the apparent strong grip that the management of Sports Direct has over the agencies. Yet those employment agencies take on the responsibility of employing the workers, providing them with poor terms and conditions, and paying them rates of pay which at times have fallen below the minimum wage rate.”
And it added: “Many of the agency workers at the Shirebrook warehouse have been working there for many years. The warehouse at Shirebrook is open 365 days a year, 24 hours a day, and the nature and flow of business activity in the warehouse can be forecast with some accuracy. We heard no convincing reason why Sports Direct engaged the workers through agencies on short-term, temporary contracts, other than to reduce costs and pass responsibility. We do not accept that the advent of the internet is a sufficient reason to use agencies to supply the bulk of the workforce.”
The committee also said: “It is unlikely that it [Sports Direct] is the only organisation that operates in such a way. We will be holding Mr Ashley’s feet to the fire, so as to see what progress he has made on improving working conditions for workers at his premises. We will also be studying the business model in general when we look at the labour market. Evidence of poor working practices reflects badly on the corporate governance arrangements at Sports Direct; we call on Mr Ashley to establish an independent review of existing arrangements to demonstrate good faith and improve investor confidence.”
