Mike Ashley admits he can't control Sports Direct

Helen Cahill
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Mike Ashley has spoken candidly about the working conditions at Sports Direct, saying he cannot know everything occurring in his company and that some practices were unacceptable.

Ashley said: "I can't be responsible for everything that goes on at Sports Direct."

"This is a process of growth, and the growth has been too big."

Ashley said the success of the business online was totally unpredictable, and the warehouse at Shirebrook did not have the capacity to deal with it, explaining why the company has been taking on agency workers.

He said it would have been "physically impossible" to employ all the workers directly and support the company's rapid growth.

Ashley welcomes an independent review of the business

He said he would welcome an independent review to see the situation at Shirebrook warehouse improved.

Ashley once again invited MPs to look around the warehouse, but joked there were too many of them to fit inside his personal helicopter.

Some of the "Victorian" working conditions at Sports Direct's warehouse are coming to light in the business select committee hearings this morning.

Unite said women will even come to work if they are pregnant because they fear losing their jobs; one woman gave birth in a toilet at the warehouse in 2014.

There have also been miscarriages on the site because workers fear getting a strike for not going to work. There have been 110 ambulance visits to the site between 1 January 2013 and 19 April 2016.

Staff are given pre-paid cards to receive their salaries and are charged £10 for the card, and 75p to withdraw from the card.

MPs say that new women at the warehouse are described as "new meat", that staff are hit on the site, and staff are described as "selfish" if they leave on time.

Mike Ashley actually arrived!

"It's been a somewhat lengthier process than I imagined," Wright said to Ashley as he walked in with Keith Bishop.

The review that Ashley has undertaken is a "work in progress" and "will never be complete", said Ashley.

He said: "I have discovered some issues.

"Bottlenecks at security are the major issue."

He said he started the review himself because of media attention, adding: "I felt in the short term I would be the person who would be able to make the most difference."

“Some things have come as a bit of an unpleasant surprise."

On the finding out about the security bottlenecks, Ashley said: "That wasn’t our best-ever day."

He admitted that during the period of bottlenecks, the company was paying workers less than the minimum wage.

But that now “there should be no reason why you will get bottlenecks at security” because new units have been opened in the warehouse.

"It's a very hardworking culture, but it should come with high rewards," he said.

"The value of Sports Direct is the people."

Describing how problems have arisen at Sports Direct, Ashley said that the company grew from being an inflatable into an oil tanker and that he was suddenly in charge of a large operation - that he couldn't possibly know everything about.

Ashley spoke to unions last September, and will do so again at the next AGM. Those are the only times he speaks to unions.

"I can do a better job for the employees at Sports Direct than Unite," said Ashley.

"Will you find it 100 per cent perfect? Of course you won't," said Ashley, accepting that an independent review of Sports Direct would be valuable.

"I prefer it to be totally independent. Then we'll get some stuff that we can work on."

Ashley admits the warehouse's working conditions are unacceptable

"If you were a minute late, you got docked 15 minutes pay," Ashley admitted.

"If you asked me, that's unacceptable."

He said that the practice has been changed, and that he doesn't know who enacted that policy because "I honestly do not believe that's fair."

On whether workers are criticised over the tannoy for not working hard enough, Ashley said: "I think this is a bit of a myth."

"To my knowledge it doesn't exist...If we are abusing it, we deserve the cane."

Ashley said that it makes no sense that the ambulance is visiting Shirebrook so often, adding: "How are people getting injured in Sports Direct? It’s a very simple process.

"Why are we doing so many calls? I am told they were overly quick to pick up the phone to the ambulance service."

MPs put it to Ashley that a staff member was told in a written evaluation: “You come across as quite selfish because you always want to leave on time.”

Ashley said he cannot possibly control every situation at the company, but admitted: “I agree with you, it’s wrong.”

On sexual harassment

The committee said that one woman was told by a manager: “If you want to get a contract, we can talk about it over dinner.”

They explained to Ashley that there was not just one manager, but several, who said that to the women.

“That is a type of sexual predators that have to be dealt with,” said Ashley. “It 100 per cent should not be going on.”

“They’re repugnant, they’re disgusting.”

But he defended himself saying that it may well be happening at other companies, saying: “Are you sure it’s not happening in Sainsbury’s? I think it probably is.”

Agencies give evidence

Best Connection Group say 10 per cent of the company's turnover comes from Sports Direct and they provide 17,000 people to the warehouse.

Chris Birkby, managing director of Transline, said that Sports Direct uses two agencies, because it is safer given the number of workers at the site.

Birkby defended the pre-payment cards because it speeds up the time for workers to get paid if they don't have a bank account, and said it is not mandatory.

"It's there to help them," Birkby said.

Birkby says the strikes on workers are there for there safety, and that they worked to stop employees queuing for security checks.

Agencies did a survey on staff; 96 per cent of staff at the warehouse said they were satisfied. MPs pointed out that this was very inconsistent with evidence heard on the working conditions.

Hardy later admitted there were 46 responses to a separate survey, out of a possible 2,000. MPs said this showed staff were too scared to respond to the staff surveys.

There was an awkward moment as Jennifer Hardy, finance director of Transline, left the panel to get a glass of water; Wright pointed out to her that if staff at Shirebrook asked for a glass of water outside of breaks, they would be given a strike.

Representatives are facing criticism for describing the worker's contracts as "flexible", because the contracts say: "Unless there is good cause, you must accept any assignment given by the company."

"The strike policy is not there to punish people," said Hardy, of the disciplinary procedures operated by the company, prompting laughter in the room.

"It is for health and safety," she added.

Andy Sweeney, chief executive officer of Best Connection said Unite’s evidence “wholly misrepresents the situation at Shirebrook.

“I would encourage you all to visit the site.”

Unite give evidence

Steven Turner, the assistant general secretary of Unite Union and Luke Primarolo, a regional officer of Unite are first up in front of the business, innovation and skills committee.

Steven Turner said that, regarding Ashley's review of working conditions: "there is no review".

On whether or not there have been attempts to improve working conditions, Turner said: "Not that we're aware of at all."

Agencies employing workers have not replied to Unite's concerns regarding the warehouse.

Sports Direct are in talks with HMRC regarding backpay for staff who have been paid less than the minimum wage.

Victorian working conditions

Unite described the culture in the warehouse as "a culture of fear".

Turner added: "This is a business model that has exploitation at the very heart of it.

"This is not typical of a warehouse, but it will become typical of a warehouse."

Unite representatives have focussed on the instability of zero-hours contracts, claiming issues found at Sports Direct apply across various industries.

"There is no legitimacy of employing workers in a precarious way," said Turner, referring to the fact that the Shirebrook warehouse, and the shops its supplies, are open 24/7, all year round.

At the company's 2015 AGM, Unite the union staged a protest against what it termed "Victorian" conditions at Shirebrook.

Iain Wright, chair of the business select committee, says MPs today are looking into "serious allegations" about staff conditions at the Shirebrook Warehouse, as well as asking Ashley about a review of working conditions that he began six months ago.

Sports Direct's billionaire founder Mike Ashley will face MPs' questions in the last select committee hearing this morning, after months of avoiding calls to appear in front of the business, innovation and skills (BIS) select committee.

He finally agreed on Sunday that he would appear in front of MPs at the select committee hearings today in a letter to Wright. In capitals, Ashley wrote that he had nothing to hide.