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Sports Direct founder Mike Ashley admits warehouse problems Sports Direct pay policy unacceptable, says founder Mike Ashley
(about 3 hours later)
Sports Direct founder Mike Ashley has admitted to problems with some practices at the firm's Derbyshire warehouse, ahead of him facing MPs. Sports Direct's policy of docking staff 15 minutes pay for being one minute late is "unacceptable", founder Mike Ashley has told MPs.
In a letter to staff, made public on Monday, Mr Ashley said the centre needed improvements to its security procedures, which had now been made. Mr Ashley also admitted that he had paid workers below the minimum wage, and said he had discovered "issues" with some working practices.
The retailer has been criticised for the centre's working conditions. "I've hopefully addressed some of those issues," he said.
Mr Ashley said chief executive Dave Forsey would also not receive his £4m bonus due to the "difficult year". MPs are investigating working practices at the firm's Derbyshire warehouse after a series of allegations.
The Newcastle United owner is due to appear before the Business, Innovation and Skills select committee later. The firm has been accused of creating a "culture of fear", with a tough disciplinary system, the use of controversial zero-hours contracts and time-consuming staff security searches, leading to staff earning under the minimum wage it is alleged.
Mr Ashley had previously refused to face MPs, but on Sunday he decided that he would give evidence to defend the firm's "good name". 'Culture of fear'
The billionaire had urged MPs to visit the warehouse in Shirebrook before agreeing to give evidence. Mr Ashley, has led an internal investigation into the allegations, but said this was an ongoing process that would "never be complete".
In the letter, Mr Ashley said he was appearing at the select committee because "we have nothing to hide". "In the warehouse there is a culture of fear," Unite's Luke Primarolo said earlier.
"People are scared because they are working under a system where they know they could lose their employment at any moment," he added.
Unite officials gave evidence ahead of founder Mike Ashley facing MPs.
They said the Derbyshire distribution centre operated a "strike system" for misdemeanours where staff were given "a strike" for things such as spending too long in the toilet, excessive chatting or taking a day off sick.
Once an employee had six strikes they were automatically dismissed.
"When you have people under that much fear they come into work ill and that creates a significant health and safety risk," said Steve Turner, assistant general secretary of Unite.
Mr Turner said Unite had statutory recognition for just over 200 direct employees at the warehouse, with the other 3,000 staff supplied by agencies.
Mr Ashley who earlier admitted to problems with some security practices at the firm's Derbyshire warehouse, mainly the time it took for staff to undergo security checks after finishing work, told MPs that bottleneck had now been addressed.
"The process is in place so that genuinely shouldn't happen. You should be finishing your shift and walk through," he said.
'Difficult year''Difficult year'
Last year the Guardian reported that workers at the sportswear chain's warehouse had been subjected to rigorous searches and surveillance.Last year the Guardian reported that workers at the sportswear chain's warehouse had been subjected to rigorous searches and surveillance.
Peter Linstead, a barrister at Tanfield Chambers and a specialist in employment litigation, said such measures were common in retail and many shops had similar schemes in place.Peter Linstead, a barrister at Tanfield Chambers and a specialist in employment litigation, said such measures were common in retail and many shops had similar schemes in place.
"The real issue is it took a lot of time and staff were not paid for that period of time, according to the allegations," he told the BBC."The real issue is it took a lot of time and staff were not paid for that period of time, according to the allegations," he told the BBC.
In his letter to staff, Mr Ashley said all workers at the firm, including agency staff, were paid at hourly rates above the minimum wage. On Monday, in a letter to staff, Mr Ashley said all workers at the firm, including agency staff, were paid at hourly rates above the minimum wage.
Six strikes policySix strikes policy
A BBC investigation last year found ambulances were called out to Sports Direct's complex at Shirebrook, in Derbyshire, 76 times in two years.A BBC investigation last year found ambulances were called out to Sports Direct's complex at Shirebrook, in Derbyshire, 76 times in two years.
Former workers said some staff were "too scared" to take sick leave because they feared losing their jobs.Former workers said some staff were "too scared" to take sick leave because they feared losing their jobs.
Sports Direct said at the time it aimed to provide safe working conditions for all.Sports Direct said at the time it aimed to provide safe working conditions for all.
Shares in Sports Direct have fallen 45% in the past 12 months amid falling sales and a barrage of negative publicity.Shares in Sports Direct have fallen 45% in the past 12 months amid falling sales and a barrage of negative publicity.
Independent retail analyst Nick Bubb commented: "The reason Mike Ashley is normally kept away from the press is that he speaks his mind too freely, so it will be interesting to see if the MPs goad him into letting his guard slip."Independent retail analyst Nick Bubb commented: "The reason Mike Ashley is normally kept away from the press is that he speaks his mind too freely, so it will be interesting to see if the MPs goad him into letting his guard slip."
Select committee chairman Iain Wright said he looked forward to Mr Ashley responding to the "serious allegations".
Failure to appear in front of MPs meant Mr Ashley had risked being found in contempt of Parliament.
"As a committee, we want to get a sense of the genuine and balanced picture at Sports Direct and establish whether there are issues for the wider economy which need further examination, such as the status and rights of agency workers," Mr Wright said.
At Tuesday's hearing, MPs will also be hearing from the union Unite, which has been highlighting working conditions in the warehouse, as well as representatives from both Transline and The Best Connection, the employment agencies that supply temporary employees to the site.