Sports Direct founder Mike Ashley 'accountable' for 'appalling' work conditions
MPs have delivered a damning indictment of working conditions at retail giant Sports Direct and warned they could become the norm across Britain.
Founder Mike Ashley was bluntly told he was accountable for the "appalling" working conditions at the firm's stores and its warehouse in Shirebrook, Derbyshire, with workers treated as "commodities" rather than human beings.
In a hard hitting report, the Business Committee said it had been presented with a "disturbing picture" of work practices during its inquiry into the company.
The MPs said evidence presented by employment agencies the Best Connection and Transline, which employ staff for Sports Direct, was "woefully poor" and in some cases incorrect.
The committee said it was "deliberately mislead" by Transline and urged the company to clarify some of its evidence.
The committee's report said a spotlight had been shone on the working practices of Sports Direct, which was "extremely disturbing".
"Workers at Sports Direct were not being paid the national minimum wage, and were being penalised for matters such as taking a short break to drink water and for taking time off work when ill," it stated.
"Some say they were promised permanent contracts in exchange for sexual favours.
"Serious health and safety breaches also seem to have occurred.
"For this to occur in the UK in 2016 is a serious indictment of the management at Sports Direct."
Committee chairman Iain Wright (Labour, Hartlepool), said: "The evidence we heard points to a business whose working practices are closer to that of a Victorian workhouse than that of a modern, reputable High Street retailer.
"For this to occur in the UK in 2016 is a serious indictment of the management at Sports Direct and Mike Ashley, as the face of Sports Direct, must be held accountable for these failings.
"It's seems incredible that Mike Ashley, who visits the Shirebrook warehouse at least once a week, was unaware of these appalling practices.
"This suggests Mr Ashley was turning a blind eye to conditions at Sports Direct in the interests of maximising profits or that there are serious corporate governance failings which left him out of the loop in spite of all the evidence.
"This model has proved successful for Mr Ashley and there is a risk this will become much more the norm in Britain.
"A modern and developed economy focused on innovation and supporting entrepreneurialism and enterprise cannot be allowed to operate like this.
"We were also disgusted at the poor evidence given by the agency companies, who deduct money from low-paid workers without proper explanation and justification."
Mr Wright told the Press Association he welcomed moves by Mr Ashley to engage with the Unite union, adding he was determined to continue checking on progress made in improving conditions for the workers.
The MPs said it was "irresponsible, if not reckless", for Sports Direct to give the two employment agencies £50 million when they did not seem to have a basic understanding of employment law.
The MPs said they would visit Shirebrook, called for a review of health and safety in the warehouse, and said the Gangmaster and Labour Abuse Authority should look into employment practices.
A Government spokesman said: "This report details some extremely concerning findings. Everybody deserves to be treated with dignity and respect and the law is clear that pay must be fair no matter who you are or what you do."
A spokesman for Sports Direct said: "We will study the contents of the committee's report very carefully. It is our policy to treat all our people with dignity and respect.
"We are pleased to see that the committee has recognised Mike Ashley's commitment to engage in addressing any shortcomings in the working practices at Sports Direct."
Simon Walker, director general of the Institute of Directors, said: "This is thoroughly negative for the whole of British business. We worry that the public will look at this damning report on working conditions at Sports Direct and assume it is how British companies behave.
"Nothing could be further from the truth. IoD members, who run enterprises of all shapes and sizes across the country, will be as appalled by the MPs' indictment of Mike Ashley as anyone else. It damages all businesses when a high-profile figure fails in his duty to treat employees, customers and shareholders fairly, and with dignity.
"I implore Mike Ashley to reflect on the deep damage he has done to public trust in business."
Shadow business secretary Jon Trickett said: " A Labour government would increase the number of minimum wage inspectors to catch and prosecute rogue employers.
"Labour will also be publishing proposals in due course to make it easier and more affordable for workers to bring cases of exploitation and discrimination to employment tribunals.
"In the coming months we will be talking to business and trade unions about how we might consign such practices to history."