Sports Direct: Legally unfair, or illegally exploitative?
28 September, 2016
Sports Direct’s zero-hours contracts have long been the topic of debate and anger, with many likening the use to slave labour. Sports Direct’s owner, embattled boss Mike Ashley, defended the practice initially by arguing it was within the law. However, he has since been forced to promise a review of working practices, and an abolishment of the company’s use of zero-hours contracts. Further scandal surrounds the company’s Shirebrook warehouse, and this time Mike Ashley is struggling to remain squeaky clean, with the warehouse having been compared to a Victorian workhouse. He has even been subjected to a parliamentary enquiry as a result of revelations. More recently, in the warehouse’s first open day, Ashley was ridiculed for flashing a thick wad of £50 notes in front of minimum wage workers, which many argued was a demonstration of how out of touch he is. And, despite their promises to decrease zero-hours contracts, the controversial Shirebrook warehouse will actually be exempt from these changes as the workers there are hired through an agency. So we ask, what makes Sports Direct so controversial? And what changes have been proposed by Sports Direct, and by the government, to change these issues?
Sports Direct’s main issues stem from their warehouse in Shirebrook, where there have been allegations of substandard conditions, and payments below minimum wage. A report by the Guardian newspaper last year found that staff at the warehouse were subject to lengthy security searches which in some instances meant that their pay fell below minimum wage. This resulted in Sports Direct issuing a statement where they promised a 15p an hour increase in staff wages at the cost of £10m a year. They also promised around £1m in back pay for those who were underpaid. Whilst it is great that they are addressing this issue, it should not have been able to occur in the first place. Minimum wage laws are there for a reason, and companies as big as Sports Direct should know better than to break the law for the sake of a few pence. There has been little talk of any repercussions for Sports Direct, despite the fact that they broke the law. Whilst they have been subject to a parliamentary enquiry, which Ashley voluntarily attended, this hasn’t resulted in any obvious punishment, despite the fact that they failed to follow the letter of the law. The need for rigorous security checks is at some level understandable, but if they are done to the extent that they are affecting the minimum wage of the worker then they are clearly over the top. Why is it possible for so many other companies to pay minimum wage without these issues, yet Sports Direct go above and beyond to make it as hard as possible for workers to work?
It was not just the fact that the staff were paid below minimum wage that led to Shirebrook being compared to a Victorian workhouse. It was also their use of the ‘six strike’ system. This system meant that once a staff member acquired six strikes, they were automatically dismissed. If these strikes were applied for dismissible offences that would appear to be acceptable. However, staff members were given these strikes for staying on the toilet for too long, taking a day off stick or for talking too much. Whilst these may result in raised eyebrows or a quick telling off in most employment settings, they aren’t what you would typically consider something worth being fired over unless it is happening repeatedly. Six strikes is not that many, and who is to say what is ‘too long’ on the toilet. Additionally, you are legally allowed to take sick days. Surprise surprise, people get sick, and they aren’t necessarily doing it to ‘skive’ off work, they may indeed actually be ill. It suggests that Sports Direct do not trust their workers, as does their insistence on searching them so thoroughly on arrival and departure to the warehouse. This is not a fair way to treat your staff, and it is no wonder that the warehouse was compared to a Victorian workhouse with such conditions.
A further investigation by the BBC found that 76 ambulances were called to Shirebrook in 2 years. In response to this, Sports Direct have said they will be appointing a full time nurse at Shirebrook so that ambulances aren’t required so regularly. However, they seem to have missed the point. The issue isn’t the number of ambulances, it is the fact that so many are required in the first place. This suggests either that the working conditions are substandard, or perhaps more obviously, workers are forced to come into work when sick to avoid a strike on their record and as such they are collapsing or falling more ill whilst at work. Whilst there are a huge number of staff at the warehouse, 76 ambulances still suggests a failing somewhere, and employing a full-time nurse only helps them cover up the issue, rather than deal with it. Sports Direct have also promised to axe the ‘hierarchically and potentially oppressive’ six strikes policy following the furore that surrounded the revelations of its use, which is definitely a positive improvement, and should hopefully therefore see a reduction in the need for a nurse.
Another area that Sports Direct have been criticised on is their use of zero-hour contracts. They are definitely not the only company to use this practice, and they are legally entitled to do so. However, the extent that they use these contracts is what has drawn so much attention to their brand. Of 4,459 workers at Shirebrook, only 400 are on permanent contracts. This is what has made it so easy for Sports Direct to impose their six-strike policy, as these workers are not contracted to a certain amount of hours. Additionally, these 4,059 workers are agency staff, and as such can be dropped at a moment’s notice, hence the six-strike policy. There are also 18,250 casual retail staff on zero hour contracts, which is almost 4 times the number who are on permanent contracts in the retail sector. Whilst Sports Direct have promised to abolish zero-hour contracts following the furore that has surrounded their extensive use of them, this promise will not apply to the 4,059 agency staff at Shirebrook as they are not directly employed by Sports Direct. These staff are, after all, the main focus of many of the enquiries, yet they will not see any of the promised benefits.
These problems, however, are not necessarily a problem unique to Sports Direct. A similar issue has often been noted in the Amazon warehouses that are of a similar size, especially around Christmas time. Perhaps this is the norm for big brands with big warehouses, but that doesn’t mean that it should be acceptable. It’s great to see that enquiries are being carried out, both by the press and by parliament, into these practices. It shows that they are not acceptable, and that big business does not mean the opportunity to skimp on workers’ rights.
If you believe you have been subjected to unfair working conditions, or you have an employment dispute you need to sort out, First4lawyers are here to help. You can call us today on the number at the top of your screen, or request a call back.