Sports Direct founder Mike Ashley is to be questioned by MPs on Tuesday over the treatment of staff at his retail group, with pay and working conditions among the issues expected to come under scrutiny.
Last year, the Guardian placed two undercover reporters inside Sports Direct’s warehouse in Shirebrook, Derbyshire. They found that temporary workers there were receiving an effective hourly pay rate below the minimum wage, after being subjected to compulsory searches at the end of shifts and deductions from their pay for late attendance.
MPs on the business, innovation and skills select committee have already indicated that they will question Ashley about his pledge to hold a review of working conditions following the revelations.
Here are a list of 10 key questions that the billionaire, who is scheduled to appear at 11am, should answer.
1 Has Ashley concluded his internal review, what were its findings and will it be made public?
Reports at the weekend, when Ashley finally backtracked and agreed to attend the select committee, suggested that he feels he has now dealt with all the concerns raised about pay and conditions at Shirebrook and is keen to put the matter behind him. He needs to explain in detail what he discovered in the review and how he has dealt with any issues it has raised.
2 What has Sports Direct done to improve working conditions?
The criticisms of the retail group have included the general working conditions within the depot. For instance, a daily search – part of Sports Direct’s zero-tolerance approach to theft – involves workers lining up before being ordered to strip to the final layer above the waist and empty their pockets. They are then asked to roll up their trouser legs to reveal the brands of their socks and expose the band of their underwear. Occasionally workers are hauled into a side room for a more detailed search.
Workers are also told they will walk almost 20 miles each day inside the warehouse as they pick products off the shelves, and their performance is constantly scrutinised. Even fit young adults in their 20s can complain this is gruelling.
3 How many teachers and community leaders did Sports Direct speak to during the review?
Local primary school headteachers alleged that Sports Direct warehouse workers were sending their children to school while sick because they feared the sack for taking time off work. Similar claims were made by local religious leaders. In response to the reports, the company said last year it was not “aware of any occasions on which sick children have not been able to be collected from school by their parents”. What has it discovered since?
4 After the allegations emerged about warehouse workers being paid, in effect, below the national minimum wage, Sports Direct pledged £10m towards a staff pay rise. Does the company accept, therefore, that compulsory unpaid searches on staff leaving the warehouse meant they were previously receiving pay that was in effect below the minimum wage?
After issuing a lengthy defence of its employment practices when announcing Ashley’s review in December, Sports Direct nonetheless pledged £10m towards a staff pay rise. The increase affected an estimated 15,000 workers on zero-hours contracts in stores and 4,000 agency staff in the Shirebrook depot and took effect from 1 January. Why make the concession if the staff were already being paid properly?
5 Is Sports Direct being investigated by HM Revenue & Customs regarding the allegations that workers have been receiving pay that is effectively below the minimum wage?
The Guardian’s reports triggered an urgent parliamentary debate in December with the business minister Nick Boles called to the Commons to answer questions on the scandal. He said HMRC can intervene if concerns emerge about specific sectors in the economy. Boles added: “I don’t care how famous an employer is. I don’t care how well connected they are. I don’t care, frankly, how much money they have made. They need to obey the law. If they don’t obey the law, we will find them and disqualify directors if necessary.” MPs on the committee now have an opportunity to find out if these powers have been used regarding Sports Direct.
6 Has Sports Direct had any discussions with workers or their representatives about topping up wages with back pay?
If this is the case, then it will raise questions about whether Sports Direct has been paying staff the minimum wage historically.
7 Ashley has said: “No Sports Direct employees are engaged in the Shirebrook warehouse on a zero-hours contract, and the main agencies have confirmed to us that none of their workers are engaged on a zero-hours contract.” Can he disclose what guaranteed hours warehouse workers are entitled to?
While agency contracts seen by the Guardian promise workers some hours in the warehouse, the hours are so few that the distinction between guaranteed work and zero hour-style arrangements, in whichthere is no guaranteed working time, is effectively meaningless. A contract with one Sports Direct agency guarantees 336 hours over a 12-month period. This is equivalent to 1.4 hours a day, assuming a five-day week.
The Guardian’s undercover reporters were employed as temporary workers by Sports Direct’s employment agencies in November last year and were not told that they were guaranteed a set number of hours of work a week. Initially they were given 24 hours’ notice if they were required in the warehouse the following day. Both reporters were then put on a five-day shift pattern.
8 Does Sports Direct influence the hourly rates paid to agency workers?
Most workers inside the warehouse are employed by two employment agencies, although pay and procedures between both sets appear remarkably consistent. If Sports Direct influenced wages and the internal procedures, then it cannot use the agencies as an excuse for the pay and conditions in its plant.
9 Sports Direct’s warehouse is operational 24 hours a day and for 365 days a year. The facility always requires a substantial number of staff, so why are the vast majority of the workers employed on temporary contracts?
Businesses like to say that temporary workers give them flexibility to respond to changing conditions. Certainly it is a valid argument that companies such as Sports Direct will need to take on more staff around Christmas. However, the the Shirebrook warehouse has thousands of people working in it even during quiet times. Why are they on temporary contracts?
10 Will Ashley reveal if any temporary staff have been dismissed after falling foul of a six-strikes-and-you-are-out system at Shirebrook?
Warehouse workers are warned they will be sacked if they receive six “strikes” over a six-month period for offences including: a period of reported sickness; errors; excessive/long toilet breaks; time wasting; excessive chatting; horseplay; and using a mobile phone in the warehouse. Sports Direct says it “does not penalise its staff for being ill. Sanctions may be applied if workers fail to follow the company’s reasonable sickness absence notification procedures, which are in line with industry best practice.” But how many workers have been shown the door as a consequence?
