Sports Direct plans to review and improve working conditions, which will include taking action to better support the wellbeing of staff and addressing pay issues.
The plans were published in a Working practices report, compiled by Reynolds Porter Chamberlain on behalf of the board of Sports Direct International. It follows issues raised at a Select Committee hearing in June 2016, and the Business, Innovation and Skills (BIS) Select Committee’s publication of a report into employment practices at Sports Direct in July 2016.
The Working practices report details key areas for change within the business, highlighting measures that have already been taken as well as proposals for further amendments to working practices and policies to ensure staff are treated fairly.
At the Select Committee hearing in June, Mike Ashley, founder of Sports Direct, admitted that workers at the retailer’s Shirebrook warehouse were paid below the national minimum wage. This was put down to time delays at security checkpoints on entry and exit at the warehouse and a system that saw staff docked for 15 minutes of pay, even if they were only one minute late.
In January 2016, the security system was amended so that only five minutes of pay is docked if a member of staff is one minute late. To allow greater flexibility, the organisation has pledged to review whether this one-minute leeway should be increased to two minutes. The report also recommends staggering shifts to further reduce traffic levels through security.
Sports Direct has also confirmed that it has paid back pay to directly employed staff at the warehouse following an investigation by HM Revenue and Customs for underpayment of the national minimum wage.
In December 2015, the organisation increased pay for staff on national minimum wage salaries by £0.15 an hour, to offset the impact that deduction of pay for late clocking in and other such issues on national minimum wage compliance.
The organisation has also taken steps to ensure that store-based staff do not earn under the minimum wage as the result of unpaid training and cleaning. It has committed to look into this further as part of its review.
To tackle employee wellbeing, Sports Direct is formalising a welfare fund for staff, as well as improving conditions in stores.
A full-time nurse will be appointed to support the health and wellbeing of staff. There are also plans to appoint a welfare officer, and build an on-site gym at the Shirebrook warehouse.
In light of the findings of the report, the organisation will also conduct a review of the HR function within the business, with the aim of strengthening it and increasing its profile.
A further 12-month review into working practices will be conducted and reported to the organisation’s shareholders in 2017.
Steve Turner, assistant general secretary at trade union Unite, said: “We welcome the commitment by the Sports Direct board to work constructively with Unite to bring about real change in its efforts to address labour abuses and become an exemplary employer.
“While the report marks significant progress, not least the eradication of zero hour contracts in the stores and the six strikes and you are out system, Unite will be asking the board to go further and faster in a number areas when we engage with the [organisation].
“Unite believes the board can be bolder in the coming months and put in place a framework agreement to move bigger numbers of agency workers into direct employment, as well eradicating the use of short hour contracts such as the annualised 336 hours contract currently in use at Shirebrook.
“We will seek to work constructively with Sports Direct over the coming months to ensure it stays true to its promise to restore dignity and respect to the workplace.”