The chair of the parliament’s public accounts committee has added to calls for an investigation into the low pay and “humiliating and demeaning” working conditions at Sports Direct, following revelations made by the Guardian last week.
Meg Hillier, the Labour MP for Hackney South and Shoreditch, said she would be questioning HM Revenue & Customs on how it investigates company compliance with minimum wage legislation during a session in front of her committee in January.
“I think there is enough evidence from this good bit of journalism by the Guardian to go in there and I think there needs to be an investigation on that basis,” she told BBC Radio 4’s PM programme on Tuesday.
“These staff in these low wage jobs, in a company that sounds as though it is ruled by fear, will be afraid to come forward – and they shouldn’t have to do that in their own right. So I do hope that HMRC are already in there.”
Sports Direct have insisted they are acting within the law, but Hillier said: “They may be, they say, sticking to the letter of the law, but certainly they are breaking the spirit of the law and certainly the spirit of being a good employer.”
Her comments came after a Guardian investigation revealed how thousands of Sports Direct workers were receiving effective hourly rates of pay below the minimum wage.
Undercover reporters found how the retailer’s warehouse workers are subjected to an extraordinary regime of searches and surveillance, while local primary schoolteachers also said that pupils can remain in school while ill – and return home to empty houses – as parents working at Sports Direct are too frightened to take time off work.
The reports caused an outcry across the political and business spectrum, with an urgent question filed by the former shadow business minister, Chuka Umunna, forcing the business minister, Nick Boles, to the Commons on Monday.
During the debate, MPs called for the company to be investigated. The firm has been branded as a “scar on British business” by the Institute of Directors, slammed by the union Unite for presiding over “Dickensian” working conditions in its warehouse, and rounded on by its major shareholders who have indicated they have begun talks in a bid to force Sports Direct to appoint new non-executive directors.
City hedge fund boss Crispin Odey criticised the retailer’s billionaire founder Mike Ashley as someone who is “difficult to house train” while describing his authority over other Sports Direct directors as “dangerous”.
Hillier added: “What we have heard from [the Guardian’s investigation] is something that is frankly humiliating and demeaning for the workers involved, whatever Sports Direct say of the legal position … It is really important that this is tackled and we will be asking HMRC questions about enforcement in the new year”.
Sports Direct said: “Sports Direct believes it’s in compliance with minimum wage regulations and takes its responsibilities extremely seriously.” Temporary workers at Sports Direct’s Shirebrook warehouse are mostly hired through agencies, which technically employ the staff.
Since last week – when Sports Direct also reported disappointing trading figures – almost £600m has been wiped off the company’s value with shares down 14%. With a 55% stake in the company the value of Ashley’s personal fortune has taken a hit of about £313m.
HMRC said it could not comment on individual companies but acknowledged that officials were able to launch proactive investigations as well as inquiries in response to specific complaints by employees.
A spokesman said: “HMRC investigates all direct complaints made by workers and considers all issues raised which may impact on whether a worker receives the full national minimum wage. Anyone who believes they are not receiving the national minimum wage should contact Acas.”
