Sports Direct to back pay workers after years of underpaying them
Sports Direct has been ordered to back pay staff after the retailer’s founder, Mike Ashley, admitted in parliament that it had broken minimum wage law.
Sports Direct
The company will hand over £1m to thousands of its warehouse workers after it was found to be underpaying them for years. The payments will be backdated to May 2012 and could be up to £1,000 for some workers.
The agreement was struck between the Unite union, the retailer and HM Revenue and Customs and involves around 200 workers directly employed by Sports Direct as well as over 3,000 staff hired through the temporary employment agencies it used. This includes The Best Connection and Transline agencies, which provided the majority of the company’s labour at its warehouse in Shirebrook, Derbyshire.
Sports Direct could also be facing an additional £2m in fines imposed by the Department for Business, Energy and Industrial Strategy (BEIS) for breaching the minimum wage laws.
In June, the retailer’s billionaire founder, Mike Ashley, appeared before MPs investigating his company’s treatment of its workers and admitted that it had broken the law over pay. Ashley was summoned before MPs after a Guardian investigation revealed that staff were regularly kept behind for an additional 15 minutes after their shift ended for mandatory searches in addition to suffering deductions from their wage packets for clocking in for a shift a minute late.
Sports Direct's damaged reputation has coincided with a slump in performance with its pre-tax profit falling by 8.4 per cent to £257.2m for the 12-month period leading to July 2016.