The Business, Innovation and Skills (BIS) Select Committee has released a report into employment practices at Sports Direct, which includes concerns around pay deductions and outstanding back pay.
The report follows the admission of Mike Ashley, founder of Sports Direct, that staff at the organisation’s Shirebrook warehouse were paid below the minimum wage. Ashley admitted the pay errors at a Select Committee hearing in June.
Workers, who are employed by agencies The Best Connection and Transline Group, were paid £6.50 an hour, 20p less than the current national minimum wage rate of £6.70.
Warehouse staff in Shirebrook were submitted to searches at the end of each shift to check for stolen goods, which in turn created delays in leaving the workplace. Staff were not paid for the time spent being searched, resulting in the breach of national minimum wage requirements.
Pay has since been raised to meet the national minimum wage, however, the issue of back payments to staff is still pending. The organisation is currently subject to an ongoing investigation by HM Revenue and Customs.
The workers contracted by agencies Transline and The Best Connection have also been found to be subjected to further pay deductions.
For staff who do not have a bank account, Transline pays wages onto a pre-paid debit card. BIS found that additional fees were being charged to the employee for using this method, such as a one-off fee, monthly management fee and extra charges for cash withdrawals, texts to the card holder and paper statements.
The Best Connection offers insurance services for its workers, however, the report details that many staff members were unaware they had agreed to the salary deductions, which could cost up to £2.45 a week.
Sports Direct also came under scrutiny for docking employee’s pay by 15 minutes if they are one minute late on arrival to work or when returning from a break. This practice has since been amended.
Currently, a five minute rounding-up system is in place. This means that if staff are four minutes late then they will lose five minutes’ pay. The BIS report recommends that this be replaced by a rounding-down system.
Iain Wright MP, chair of the BIS committee, 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.”
A spokesperson for Sports Direct said: “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. We are pleased to see that the committee has recognised Mike Ashley’s commitment to engage in addressing any shortcomings in the working practices at Sports Direct.”