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| Sports Direct pay policy unacceptable, says founder Mike Ashley | Sports Direct pay policy unacceptable, says founder Mike Ashley |
| (35 minutes later) | |
| Sports Direct's policy of fining warehouse staff for being just one minute late is "unacceptable", founder Mike Ashley has told MPs. | Sports Direct's policy of fining warehouse staff for being just one minute late is "unacceptable", founder Mike Ashley has told MPs. |
| Mr Ashley also admitted that he had paid workers below the minimum wage, and discovered "issues" with some working practices, but said he had "hopefully addressed" some of these. | Mr Ashley also admitted that he had paid workers below the minimum wage, and discovered "issues" with some working practices, but said he had "hopefully addressed" some of these. |
| He confirmed HMRC were investigating the firm over the minimum wage issue. | He confirmed HMRC were investigating the firm over the minimum wage issue. |
| And he said perhaps the company had become too big for him to manage. | And he said perhaps the company had become too big for him to manage. |
| MPs are investigating working practices at the firm's Derbyshire warehouse after a series of allegations. | MPs are investigating working practices at the firm's Derbyshire warehouse after a series of allegations. |
| 'Culture of fear' | 'Culture of fear' |
| 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 security searches, leading to staff earning under the minimum wage. | 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 security searches, leading to staff earning under the minimum wage. |
| "In the warehouse there is a culture of fear," Unite's Luke Primarolo told MPs earlier. | "In the warehouse there is a culture of fear," Unite's Luke Primarolo told MPs earlier. |
| "People are scared because they are working under a system where they know they could lose their employment at any moment," he added. | "People are scared because they are working under a system where they know they could lose their employment at any moment," he added. |
| Union officials 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. | Union officials 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. | 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. | "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. |
| Security checks | Security checks |
| In one case, he said an employee had given birth in a toilet at the warehouse, due to fear of losing her job if she called in sick. | In one case, he said an employee had given birth in a toilet at the warehouse, due to fear of losing her job if she called in sick. |
| He said workers had likened the conditions to a "gulag", or "labour camp" and described the conditions as "19th century working practices". | He said workers had likened the conditions to a "gulag", or "labour camp" and described the conditions as "19th century working practices". |
| Mr Ashley, who began an internal investigation into the allegations six months ago, said it was "an ongoing process" but that he had discovered some issues. | |
| The time it took for staff to undergo security checks after finishing work was one of the main problems, he said, but said this had now been addressed. | The time it took for staff to undergo security checks after finishing work was one of the main problems, he said, but said this 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 told MPs. | "The process is in place so that genuinely shouldn't happen. You should be finishing your shift and walk through," he told MPs. |
| The Sports Direct founder said that the warehouse had effectively paid staff less than the minimum wage "at a specific time" due to the searches, but he said all staff were now paid above this. | The Sports Direct founder said that the warehouse had effectively paid staff less than the minimum wage "at a specific time" due to the searches, but he said all staff were now paid above this. |
| Union officials earlier said they were in discussions with the firm and HMRC over backpay for this period, but said any agreement would only apply to warehouse staff directly employed by the retailer, which totalled 200 people. | Union officials earlier said they were in discussions with the firm and HMRC over backpay for this period, but said any agreement would only apply to warehouse staff directly employed by the retailer, which totalled 200 people. |
| The remaining 3,000 staff were supplied by agencies, they said. | The remaining 3,000 staff were supplied by agencies, they said. |
| A HMRC spokesperson told the BBC: | A HMRC spokesperson told the BBC: |
| "This isn't about doing deals. While we don't discuss individual cases we won't accept anything less than what's owed. Our role is to investigate all cases where we believe an employer is not paying its workers the National Minimum Wage (NMW) to ensure those workers receive what they are owed under the law." | "This isn't about doing deals. While we don't discuss individual cases we won't accept anything less than what's owed. Our role is to investigate all cases where we believe an employer is not paying its workers the National Minimum Wage (NMW) to ensure those workers receive what they are owed under the law." |
| 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. |
| And a BBC investigation found ambulances were called out to Sports Direct's complex at Shirebrook, in Derbyshire, 76 times in two years. | And a BBC investigation found ambulances were called out to Sports Direct's complex at Shirebrook, in Derbyshire, 76 times in two years. |
| 'Shocked' | 'Shocked' |
| The Newcastle United owner blamed much of the firm's problems on the firm's rapid growth, saying the internet hadn't existed for the retailer ten years ago. | The Newcastle United owner blamed much of the firm's problems on the firm's rapid growth, saying the internet hadn't existed for the retailer ten years ago. |
| In response to Labour's Peter Kyle's question on whether the company had outgrown his ability to manage it, Mr Ashley admitted "probably, a long time ago". | In response to Labour's Peter Kyle's question on whether the company had outgrown his ability to manage it, Mr Ashley admitted "probably, a long time ago". |
| "I can accept the criticism of some of the things that you've said to me today would actually lead me to believe that it's definitely outgrown me... that's shocked me what you've said to me today." | "I can accept the criticism of some of the things that you've said to me today would actually lead me to believe that it's definitely outgrown me... that's shocked me what you've said to me today." |
| Some 79% of the firm's staff are employed on zero-hour contracts, with no guarantee of hours, and Mr Ashley agreed some staff should be transferred to full-time employees. | Some 79% of the firm's staff are employed on zero-hour contracts, with no guarantee of hours, and Mr Ashley agreed some staff should be transferred to full-time employees. |
| He pledged to implement a number of changes to working practices within 90 days, promising to write to MPs if the time frame needed to be extended. | He pledged to implement a number of changes to working practices within 90 days, promising to write to MPs if the time frame needed to be extended. |
| "You're pushing against an open door," he told MPs. | "You're pushing against an open door," he told MPs. |
| 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. |