A co-ordinated inquiry should be launched to investigate serious allegations about pay and working practices at Sports Direct, MPs who are Unite members have said.
Undercover reporters from the Guardian found that workers in a Sports Direct warehouse in Derbyshire were subjected to rigorous searches after they clocked out at the end of their shifts. These included unusually elaborate search regimes – extending to actually checking staff’s underwear.
Detailed end of shift searches were unpaid and took 15 minutes and may have pushed the effective pay rate at the company’s Derbyshire warehouse below the minimum wage.
The undercover reports also suggested extraordinary levels of surveillance and monitoring that could be seen as over-intrusive. Workers, for example, were banned from wearing over 800 brands of clothing stocked by Sports Direct.
Clocking in one minute late or clocking out one minute early lost workers up to 15 minute’s pay, in effect a penalty payment. This applied even if they were still on the premises.
The Labour MPs are writing to David Cameron insisting the allegations about Sports Direct are so wide-ranging that a cross-departmental investigation is required.
This would include an HMRC investigation into the allegations around the minimum wage, a business, innovation and skills department investigation, a health and safety investigation and, potentially, investigations by local authority bodies.
The MPs have turned up the heat and are demanding action well above the government response so far, which has been to put up Nick Boles, a junior business minister, to make a statement. That isn’t good enough, says Ian Mearns, chair of the Unite group of MPs who is demanding a more high-powered approach.
Mr Mearns said, “There is enough evidence to say that this needs an urgent response. If we write to different arms of the government separately, they will trade one off against the other.”
“We understand that there is on the face of it reason to look at Sports Direct in relation to payments of the minimum wage. And we believe there are health and safety issues and possibly environmental health issues, which would be dealt with by local authorities, and issues to do with employment law which would be dealt with by the department for business, innovation and skills.
“Therefore what we are suggesting is we will write to the Prime Minister saying this quite clearly need a cross-departmental Government response from HM Revenue and Customs, from the department for business, innovation and skills, from the health and safety executive and from local authority environmental service departments, and possibly other government departments as well.”
Commons select committees are also flexing their muscles on the issue. The business, innovation and skills select committee, says it will be writing to the group’s billionaire founder, Mike Ashley, who also owns Newcastle United football club.
Meg Hillier MP, chair of parliament’s public accounts committee, told the BBC she would be questioning HMRC about how it investigates breaches in minimum wage law at a committee hearing in January.
That follows pressure on HMRC from Unite to launch an investigation. HMRC claims it cannot do so until a Sports Direct worker makes a formal complaint.
This is rejected by Unite regional officer Luke Primarolo who said Unite “does not accept” this excuse from the HMRC, adding that there was enough evidence to justify an investigation.
“If it is the case that the tax authority cannot investigate unless there is a specific worker complaint, then this needs to be changed,” he said. “It is unacceptable that the most vulnerable workers, who fear losing their jobs if they speak out, will have no remit to justice.”
Sports Direct makes considerable use of minimum wage, precarious contracts, zero hours and agency staff. The Guardian reports many of the agency workers do not have English as their first language.
Even the City, not known for its moral compass, appears to have gagged at some of the Guardian allegations. In the last week Sports Direct has seen over £600m wiped off the value of shares and with it over £300m off owner Mike Ashley’s personal fortune.
Any investigation may extend to wider business practices of Sports Direct including takeovers of clothing companies USC and Republic. There has also been a messy takeover of Direct Golf which sparked complaints from its now ousted founder about the treatment of staff.
The normally conservative Institute of Directors’ has gone so far as saying, “the actions of Sports Direct will leave a scar on British business.”