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Tip of the iceberg

Sports Direct revelations could be just the start
Hajera Blagg, Wednesday, December 16th, 2015


Following a damning investigation by the Guardian into Sports Direct’s employment practices, which found that the retail giant may be paying its workers less than the minimum wage, £400m was wiped off the company’s stock market value last week (December 11).

 

Now MPs have taken up Unite’s call to have the HMRC investigate the retailer’s practices to determine whether they have run afoul of the law.

 

Chair of parliament’s public accounts committee, Meg Hillier, Labour MP for Hackney South and Shoreditch, said she would be questioning HMRC about how it investigates breaches in minimum wage law at a committee hearing in January.

 

“I think there is enough evidence from this good bit of journalism by the Guardian to go in there and I think there needs to be an investigation on that basis,” she told BBC Radio 4’s PM programme on Tuesday (December 15).

 

“These staff in these low wage jobs, in a company that sounds as though it is ruled by fear, will be afraid to come forward – and they shouldn’t have to do that in their own right. So I do hope that HMRC are already in there.”

 

‘Roll-up your trousers’ command

As UniteLIVE reported last week, the Guardian’s undercover probe found that workers in a Sports Direct warehouse in Derbyshire were subjected to rigorous searches after they clocked out of their shifts. During these searches, workers were made to roll up their trouser legs and show the top of their underwear as part of the company’s zero-tolerance policy toward theft.

 

This process took roughly 15 minutes each day – time for which workers were not paid. Adding to the fact that workers could have their pay docked for clocking in even one minute late, despite having arrived at the premises on time, the Guardian found that on average, warehouse workers were being paid £6.50 an hour instead of the legally mandated minimum of £6.70.

 

Business minister Nick Boles was forced to the Commons on Monday (December 14) after former shadow business Chukka Umunna called an urgent question, with MPs demanding that the HMRC step in and investigate Sports Direct.

 

After Unite contacted the HMRC requesting an investigation, the tax authority said it could only launch a probe after a worker had made a specific complaint – but so far no Sports Direct workers have come forward, over fear of losing their jobs.

 

Unite regional officer Luke Primarolo said that 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.”

 

Primarolo will be meeting with a group of Labour MPs in Parliament today (December 16) urging them to take on Sports Direct.

 

Specifically, Unite will be calling on the Labour MPs to take three steps – to write to business minister Nick Boles calling for an official investigation of Sports Direct’s potential non-payment of the minimum wage;  to write to the HMRC head Lin Homer also calling for an official investigation; and to call on the Business, Innovations and Skills (BIS) select committee to further investigate Sports Direct’s business practices.

 

Shares plummet

Sports Direct shares plummeted by 12 per cent last Thursday (December 10) – the worst day for trading for Sports Direct in two years – making the company the worst performing company in the FTSE 100. The share slump cost Sports Direct founder Mike Ashley approximately £237m.

 

Sports Direct’s poor performance, on the heels of the minimum wage revelations, prompted usually reserved City figures to loudly criticise the company’s employment practices.

 

The Institute of Directors’ director general Simon Walker condemned Sports Direct’s practices.

 

“Unfortunately, the actions of Sports Direct will leave a scar on British business,” he said. “IoD members share the public’s outrage. At a time when the reputation of corporate Britain is on shaky foundations, another scandal is hard to stomach for the overwhelming majority of businesses that have integrity at their core.”

 

Top shareholders, who have become increasingly frustrated with Sports Direct’s treatment of its workers, also joined the litany of criticism against Sports Direct.

 

“You can’t ignore this behaviour because it will come back to bite you,” one shareholder told the Guardian. “If you’re not looking after your staff it will hit the share price in the end.”

 

Primarolo noted that the Guardian revelations are likely only the “tip of the iceberg” – Sports Direct workers’ ill treatment possibly goes way beyond what was published in the newspaper last week.

 

“The story also highlights the problem with precarious work,” Primarolo added. “While not unlawful, all Sports Direct staff work for agencies on insecure contracts. Agency workers have fewer rights and so it empowers unscrupulous employers to break the law.”

 

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