Sports Direct share price rockets as it admits to serious shortcomings at Shirebrook warehouse and offers guaranteed hours to staff

Caitlin Morrison
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Sports Direct's founder Mike Ashley has come in for some flak in recent weeks (Source: Getty)

Sports Direct has admitted to serious shortcomings in the working practices at its Shirebrook warehouse, and plans to make changes to the way its workers are treated, the company said in a report released today.

Shares in the company were up 5.5 per cent in this morning's trading.

The retailer said it will offer casual retail staff guaranteed hours instead of zero-hours contracts and ensure all warehouse staff are paid above the national minimum wage following a review into working practices at the retailer.

The use of zero-hours contracts will be kept under review "to ensure balance and fairness", the company said.

Sports Direct was slammed by MPs earlier this year over the "appalling" working conditions at its Shirebrook operation - which was described as being similar to a "Victorian workhouse".

The retailer said today that it "deeply regrets and apologises" for the shortcomings at the warehouse, and the group's founder, Mike Ashley, has "accepted that as founder and majority shareholder he takes ultimate responsibility for any aspects of the working practices that were unsatisfactory".

These are four of the more surprising working practices brought to light by the Business, Innovation and Skills committee earlier this year.

  1. Sports Direct operated a "six strikes and you're out system" - strikes could be handed out for spending too long in the toilet or chatting.
  2. A total of 110 amublances or paramedic cars were dispatched to Shirebrook between January 2013 and April 2016.
  3. Workers at Sports Direct agency workers without a bank account were charged £10 for a card onto which their wages are paid. They then had to pay a £10 monthly management fee for the card, and were charged for withdrawing cash from it.

  4. Employees were also charged for "insurance services", a fee ranging from 45p to £2.45 a week, according to Unite.

As part of its proposed remedies aimed at improving conditions at Shirebrook, the company said it will appoint a new HR team - including a full-time nurse and a welfare officer.

The group said it had ordered its legal advisers to further review its working practices and would engage with shareholders over its corporate governance after coming in for a raft of criticism this year.

The sportswear chain has been criticised by politicians and unions for effectively paying workers less than the minimum wage and a number of investors have hit out at the group ahead of its AGM, which is due to be held in Shirebrook tomorrow.

Sports Direct has requested law firm RPC to lead a further comprehensive review of working practices.

"The review will also include examining the company's corporate governance, and as part of this process, the board will engage with shareholders to obtain their views," it said.

"Everybody deserves to be treated with dignity and respect at work," said a spokesperson for the department for business, energy and industrial strategy.

"As its own report has recommended the company must now resolve its working practice issues as quickly as possible."