Shirebrook-based Sports Direct has been operating more like a “Victorian workhouse” than a reputable retailer, a damning report from MPs has concluded.
In a blistering attack on company founder Mike Ashley a House of Commons’ select committee says the billionaire owner must be held accountable for the firm’s “appalling working conditions and practices.”
The Business, Innovation and Skills (BIS) select committee said evidence it heard presented a “disturbing picture” of the working practices and business model of the firm with 3,200 workers. The news follows an investigation by the Chad in 2014 which first exposed the operational practices at Sports Direct, including its controversial ‘strike’ system and policy of strip-searching all employees before they are allowed to leave the site - placing them below the threshold of the Minimum Wage. The investigation, which was later picked up by the BBC and the Guardian Newspapers, came about after a migrant worker gave birth in the toilets of the company’s main distribution hub in Shirebrook, allegedly because she was too scared of losing her job if she asked to go home.
MPs and union leaders came forward to condemn Sports Direct at the time, but it was not until over a year later, when the national media picked up on the Chad’s work, that Parliament eventually took notice.
Employees also described working conditions at the warehouse, which employs in the region of 3,000 largely Eastern European workers, and told of a culture of bullying and intimidation.
BIS chairman 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.
“It’s seems incredible that Mike Ashley, who visits the Shirebrook warehouse at least once a week, was unaware of these appalling practices.
“This suggests Mr Ashley was turning a blind eye to conditions at Sports Direct in the interests of maximising profits or that there are serious corporate governance failings which left him out of the loop in spite of all the evidence.
“Mike Ashley had to be brought kicking and screaming to answer the committee’s questions about working practices at Sports Direct.
“To Mr Ashley’s credit, when he gave evidence he was open and willing to engage and he is now setting out some of the steps which Sports Direct needs to take to stop these practices recurring.”
The report says most of the workers at Sports Direct’s warehouse are not directly employed by Sports Direct, but employed by agencies The Best Connection and Transline Group.
It accuses Transline of misleading MPs in the “woefully poor” evidence it gave to the committee.
A spokesman for Transline Group said: “Transline representatives attended the committee to give a transparent account of our operations at Shirebrook.
“No incorrect or misleading information was given and we will respond to the committee on any and all issues raised within the report within the two-week deadline stipulated. Transline remains committed to ensuring a safe working environment and fulfilling its duty of care to our employees.”
The report also stated:
* Sports Direct’s “success is founded on a business model that enables the majority of workers in both the warehouse at Shirebrook and at the shops around the UK to be treated without dignity or respect”.
* Cheap goods in the company’s stores come at a cost to workers who are viewed “as commodities rather than as human beings with rights, responsibilities and aspirations”.
* The company’s “six-strikes-and-you’re-out” policy, where workers can be sacked if they receive six black marks over a six-month period, is a “punitive measure, which denigrates the workers at Sports Direct and gives the management unreasonable and excessive powers to discipline or dismiss at will”.
* “No convincing reason” was given why Sports Direct maintains thousands of warehouse workers on short-term contracts, “other than to reduce costs and pass responsibility”.
A spokesman 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.”