Sports Direct to review staff conditions but insists portrayal of practices is 'unfair'

The retailer has come under fire after a report by The Guardian, based on the experiences of two undercover reporters, alleged that unpaid time for “rigorous” staff searches at its Shirebrook warehouse meant workers were effectively paid less than the minimum wage.

The newspaper claimed that Sports Direct’s Shirebrook facility is known locally as ‘the Gulag’ – a reference to Soviet forced labour camps.

And after the employment practices were raised in Parliament, it emerged that Labour MPs were set to ask Prime Minister David Cameron to launch a cross-departmental investigation into the controversial retailer.

After unveiling a 3.6% jump in interim pre-tax profits to £166.4m last week, Sports Direct boss Dave Forsey pledged to “study” The Guardian’s article and “reflect” on the topic.

And today the retailer has made its detailed riposte in a statement to the London Stock Exchange.

Sports Direct insisted:

• Agency workers are employed under the same terms and conditions that the agencies insisted on from other companies;
• Employees are not “named and shamed” via a performance-based league table;
• Warehouse workers were not harangued via a tannoy system;
• Staff were not penalised for being ill;
• Mike Ashley will “personal oversee” a review of agency worker terms and conditions in the New Year.

The statement read: “To date, Sports Direct has sought to address questions relating to its employment practices on a case-by-case basis directly with the enquirer, but it has become evident that by doing so various parties have chosen to ignore the facts provided and have continued to present an unfair portrayal of the company’s employment practices.

“The board takes its responsibilities towards all the company’s stakeholders, be they staff, contactors, suppliers or customers, extremely seriously. Without our commitment to our staff and the implementation of a performance-led culture which encourages success, there is no way Sports Direct would have been able to grow from a single sports shop over 33 years ago to the global retailer it is today.”

Zero hours

Sports Direct added that none of the directly employed or agency staff at its Shirebrook warehouse were employed on zero hour contracts.

It insisted that the two main agencies it uses to provide workers to the warehouse employed the same terms and conditions it does with hundreds of other companies.

However it did admit there were “some limited localised variations” and pledged to undertake a review of “all the terms and conditions applicable to the agency workers supplied to Sports Direct”, including the implementation of a heavily-publicised “strike” system.

Sports Direct denied workers were subjected to “naming and shaming” via publication of a league table and said the ranking system used to monitor performance was “anonymous.”

The retailer also dismissed suggestions that the warehouse tannoy system was used to “harangue” or “name and shame” staff and said it did not penalise staff for being ill.

But it said: “Sanctions may be applied if workers fail to follow the company’s reasonable sickness absence notification procedures, which are in line with industry best practice.”

Security measures

Sports Direct defended the security measures in place at the Shirebrook warehouse because “all companies have to be cognisant of theft from warehouse operations.”

It said all employees, agency workers and visitors, including executive management and board members, were subject to random searches, but added the process was “under review.”

Sports Direct also defended its use of zero hour contracts in its stores and insisted “all parties appreciate the flexibility provided by these contracts.”

The retailer added that workers on these contracts were still entitled to holiday and sick pay where the relevant criteria for statutory sick pay are met, and “virtually all” casual retail workers were eligible for bonus payments.

The Sports Direct statement concluded: “Sports Direct always seeks to improve and do things better, listens to criticism and acts where appropriate.

“The board has agreed that Mike Ashley shall personally oversee a review of all agency worker terms and conditions to ensure the company does not just meet its legal obligations, but also provides a good environment for the entire workforce. We expect him to start that work in the New Year.”

To read the statement in full, click here.