The Names Direct, Sports Direct: Uncovering Sports Direct’s illegal practices

August 1, 2020


2 min read

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What's going on here?

An undercover report by the Guardian has found warehouse workers at high street retailer Sports Direct may be being paid less than minimum wage.

What does this mean?

After an undercover investigation, the Guardian has found out that Sports Direct could again be in violation of UK Minimum wage laws in their warehouses. The reasoning behind this is based upon the HMRC’s regulations surrounding unpaid breaks which requires that employees be allowed to have a break without any restrictions imposed upon them by their employers. Sports Direct requires their warehouse employees to stay within the premises during breaks and their hourly pay of £8.72 could therefore fall below the minimum wage if these breaks are classified as needing to be paid.

What's the big picture effect?

Mike Ashley, the CEO of the Fraser Group which controls Sports Direct, is no stranger to falling foul of employment laws. In 2015 after another Guardian undercover investigation, alongside an RPC report into Sports Direct’s working practices, it was found that there were serious shortcomings in the ways in which Mike Ashley and Sports Direct treated their employees. 

Alongside harsh practices such as fining employees fifteen minutes pay if they were even one minute late, Sports Direct also forced employees to be stopped and searched on arrival and exit in 2015, which added up to an hour and fifteen minutes to their days-unpaid. These practices led Ashley to admit in front of the parliamentary Business, Innovation and Skills (BIS) committee, that  Sports Direct were in breach of minimum wage laws, leading to a £1m pay-out to employees advocated for by Unite the Union. However, it seems Ashley has not learnt and is again mistreating his employees.

The Fraser Group have asserted that employees did not have to be paid for breaks as there is no rule restricting employees leaving the warehouse. However, the undercover Guardian investigator asked three different supervisors and was repeatedly informed that this was not allowed, with one citing the impossibility of security checking every employee if they chose to leave on their break. Regardless of whether Sports Direct is found to be in breach of Minimum wage laws in this instance, it is clear that several of the pledges they made to improve working conditions in 2015 such as increasing the number of permanent contracts, as well as increasing their employee’s wages, have either not been implemented  or have been slowly eroded down. In the case of minimum wage, the originally agreed increase of at least 15p above minimum wage has subsequently been decreased in the intervening years to only 3p. Any budding employment lawyers may wish to consider the case study of Sports Direct, and how those in the toughest, lowest paid jobs can easily be mistreated without proper regulation and oversight.

Report written by Hari Majumdar

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