Mike Ashley has admitted that workers at its Shirebrook distribution center, in Derbyshire were unfairly treated six months ago. HMRC has been investigating the firm over the minimum wage issue and unfair fining policy.
Mike Ashley, the controversial billionaire, was addressing Members of Parliament following a report last year that workers at his Sports Direct, sportswear chain's warehouse, had been subjected to thorough searches and surveillance, leading to the company effectively pushed staff's salaries below the legal minimum wage threshold. He is now testifying before a committee of MPs only after announcing he could be held in contempt of Parliament. The Financial Times said.
BBC News observes that Mike Ashley is often kept away from the media because of his tendency to speak outspokenly and sometimes too frankly. He was used to having protested loudly about not needing to defend himself to MPs. But the outspoken and bombastic boss of Sports Direct had gone soft on his appearance on Tuesday.
His testimony marked the highlight of months-long turmoil that pits the reclusive chief executive, who founded the sportswear group and built it into one of the most influential force on British high streets 34 years ago. Mr. Ashley is also accused of operating a "culture of fear" by trade unions and MPs.
Regional officer of Unite union, Luke Primalo, told MPs at the hearing that there is a culture of fear in the warehouse. Workers in the warehouse are scared because they know they could lose their employment at any moment under the company's abusively strict system.
Union officials said the Shirebrook distribution center, in Derbyshire, operated a policy of fining staff called "strike system" for misdemeanors where workers were given "a strike" for things such as spending too long in the toilet, being late, excessive chatting or filing for a sick leave. Once an employee had six strikes they were automatically dismissed.
Worker gave birth in warehouse, union tells MPs investigating British retailer Sports Direct https://t.co/fEqSrY8OlJ https://t.co/88hjl4WKsK
— Bloomberg (@business) June 7, 2016
An investigation found that ambulances were called out 76 times to Sports Direct's complex at Shirebrook. In one case, an employee had given birth in a toilet in the complex, due to fear of losing her job if she took a sick leave. Sports Direct has faced a long series of complaints by employees and unions, including contracts that do not guarantee a minimum number of working hours per week.
Since March, Mike Ashley had avoided appearing at the business select committee - branding it a "joke" at one point - only to change his mind at the last minute. He insisted that Sports Direct had resolved the security issue and had since increased workers pay to end the anomaly.
