Damning report slams Mike Ashley for “appalling” practices at Sports Direct

 
Helen Cahill
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Sports Direct Founder Faces Commons Select Committee Over Working Conditions
The MPs likened the working conditions to those of "a Victorian workhouse" (Source: Getty)

Top MPs have launched a blistering attack on Mike Ashley’s Sports Direct, branding working practices at the company’s Shirebrook warehouse in Derbyshire as similar to those of “a Victorian workhouse”.

The parliamentary Business, Innovation and Skills Select Committee, which has been investigating the retailer’s “extremely disturbing” employment practices, publishes its findings today, leaving the company open to a probe into possible labour market offences.

Chair Iain Wright MP said: “The evidence we heard points to a business whose working practices are closer to that of a Victorian workhouse than that of a modern, reputable high street retailer. For this to occur in the UK in 2016 is a serious indictment of the management at Sports Direct and Mike Ashley, as the face of Sports Direct, must be held accountable for these failings.

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“It seems incredible that Mike Ashley, who visits the Shirebrook warehouse at least once a week, was unaware of these appalling practices.” Ashley gave evidence to the committee on 7 June.

Sports Direct is already under investigation by HMRC for paying workers less than the national minimum wage.

Oliver Parry, head of corporate governance at the Institute of Directors, said: “This is a particularly damning report by the BIS Select Committee. Over the last two years we have raised significant concerns about the governance arrangements at Sports Direct. It now appears that both shareholders and employees have suffered because of it. A root and branch review of the management and board structure is now urgently needed.”

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The 3,000 workers at Shirebrook are not directly employed by Sports Direct, but by two agencies, The Best Connection and Transline Group. The BIS report said it was “irresponsible, if not reckless” that Sports Direct paid £50m to these agencies when they “do not seem to have a basic understanding of employment law and practices”.

The MPs expressed concerns about pre-paid debit cards issued by Transline via which some workers are paid. Those without a bank account were charged £10 for a card to receive wages.

The report recommends that the Gangmasters and Labour Abuse Authority (GLAA) investigate the practices uncovered. A spokesperson for the GLAA, which will be able to charge and prosecute businesses, said: “The Committee’s report raises issues of serious concern and provides evidence that will feed into GLAA’s threat assessment."

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Sports Direct said in a statement: “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.”

Meanwhile, a Transline Group spokesman said: “Transline remains committed to ensuring a safe working environment and fulfilling its duty of care to our employees.”

Shares were down 1.3 per cent, at 259p, on the news.

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