Sports Direct has just been viciously denounced in a report from the Parliamentary Business, Innovation and Skills Committee, who were prompted to investigate after a string of media exposés. As has been widely reported in the media, MP Iain Wright described the working conditions as "akin to that of a Victorian workhouse".
The majority of workers at Sports Direct are on casual zero hours contracts, employed through agencies. The company has a system under which employees are summarily dismissed after they get six “strikes”. “Strikes” can be given for such appalling misdemeanours as being off sick, drinking water or going to the toilet when not on a break. Many ex-workers have spoken in the press about the “culture of fear” that permeates through the whole company as a result.
The report describes workers being paid below the minimum wage, being humiliated over the warehouse tannoy, women being promised permanent contracts in return for sexual favours, and health and safety failings that led to ambulances being repeatedly called. In one case a worker gave birth in a toilet as she feared losing her job if she didn’t go into work.
Owner Mike Ashley was personally accused by the committee of turning a blind eye to the abuses in order to maximise profits. They claim that he visited the warehouse at least once a week and that it would be “incredible” for him not to have known what was going on.
At the time of writing it is unclear whether Sports Direct or other parties may face any legal action. HMRC may fine the company over its failure to pay the minimum wage. And the select committee determined that Transline- one of the employment agencies used by Sports Direct- had deliberately misled them in its evidence, which may constitute “contempt of parliament”. However, the depressing truth is that much of what Sports Direct has been doing is not illegal.
Sports Direct was formed in 1982 as Mike Ashley Sports, and the company continues to be controlled by Mike Ashley, who is the deputy chairman.
One thing that has received less coverage is the money that senior staff are making at the company. In 2015 the chief executive Dave Forsey was paid £6.8 million and 2,000 managers and other permanent staff were given share bonuses worth almost £155m, averaging £77,000 each, while the mass of the workforce- those on zero hours contracts, received nothing additional. Mike Ashley himself is on the Sunday Times rich list, with a net worth of £2.43 billion.
The wider picture
Besides its appalling record on workers rights', Sports Direct also scores badly across Ethical Consumer’s other policy ratings. It received our worst rating for Environmental Reporting, Cotton Sourcing, Pollution and Toxics, Likely Use of Tax Avoidance Strategies, and Supply Chain Management.
Sports Direct has many faces, owning many outdoor and fashion brands, including Karrimor, Gelert, Muddyfox.
Sports Direct is due to feature in the next issue of Ethical Consumer magazine. The company will be included in new guides to Sports Wear and Trainers.