UNITE has warned that ‘shameful’ agency practices towards workers at Sports Direct have contributed to its falling profits and reputation.
The high street retailer, which has been mired in scandal in recent months after a string of allegations about its ‘Victorian’ practices, released its latest annual results on Thursday, showing a fall in profits of 8.4 per cent to £275.2 million.
This follows a 46% fall in share prices over six months to the end of May.
The retailer’s financial results come at the end of a torrid financial year, which has seen its share price plunge by over 60 per cent and its majority shareholder, Mike Ashley, hauled in front of the House of Commons Business, Innovation and Skills select committee and grilled over poor employment practices at Sports Direct.
Unite urged the firm to cancel its contracts with employment agencies Transline and The Best Connection at Shirebrook and move workers on to permanent contracts to avoid further reputational damage.
Unite assistant general secretary Steve Turner said: ‘It is clear that shameful work practices have not only battered Sports Direct’s reputation, but are seriously harming its profits and share price.
‘The “Victorian” employment practices of Transline and The Best Connection at Sports Direct’s warehouse would shame the pages of a Dickens novel and should have no place in 21st Century Britain.
‘Unless Sports Direct severs ties with these employment agencies and moves to put workers on permanent contracts, then it risks further damage to its beleaguered reputation and profits.
‘It is incomprehensible that an employment agency deemed unfit and barred from operating in one sector of the economy can be allowed to carry on using the same employment practices in another part of the economy unchecked.’
Lifting the lid on ‘Victorian’ work practices during evidence given to the House of Commons Business, Innovation and Skills select committee at the beginning of June, Unite revealed that the employment agency Transline had been stripped by the Gangmasters Licensing Authority (GLA) of its license after being deemed unfit to operate in the food and agriculture industry in 2014.
The union announced its support for MP Louise Haigh’s private members bill, to extend the remit of the GLA to stamp out abuses by employment agencies right across the economy.
Unite also revealed that many agency workers employed by Sports Direct through Transline at Shirebrook are receiving their wages through pre-paid debit cards.
Costing £10 to get, workers are charged £10 a month in ‘administrative fees’ for the card, as well as 75 pence for cash withdrawals.
During the hearing, it also emerged that The Best Connection was charging workers a fee of over £2.45 for ‘insurance services’ straight from their weekly wages with no explanation.
Around a month ago, Steve Turner and Luke Primarolo, regional officer, attended a meeting of the Business, Innovation and Skills select committee to give evidence to MPs on practices at Sports Direct.
Mike Ashley, executive deputy chairman of Sports Direct, was also present and was given a grilling over the workhouse-like conditions in the Shirebrook and Wigan warehouses.
What follows are extracts from the evidence presented by Unite to the committee.
‘There are approximately 200 permanent workers at this facility and a further 3,000 plus agency workers employed through two employment agencies called The Best Connection and Transline Group.
‘Sports Direct reportedly pays an estimated £50 million per year to The Best Connection and Transline to supply and manage warehouse staff who are typically paid just above the minimum wage and are predominantly recruited from Eastern Europe…
‘As a direct response, we believe, to Unite securing statutory recognition (by the employer), agency staff now make up the predominant workforce in the warehouse and while many are members of Unite and are represented under their statutory rights on an individual basis, agency workers are not covered by collective recognition…
‘This combined with an unwillingness by Sports Direct to address concerns when raised by Unite has led to a proliferation of “Victorian” work practices in the warehouse, with workers telling Unite of being in constant fear of losing their job and likening conditions to a “gulag” and a “labour camp”.
‘Sports Direct’s business model is predominately built on cheap, disposable labour.
‘Across its stores zero hours contracts are the norm. In the parliament before the 2015 general election the Scottish Affairs select committee accused Sports Direct of behaving like a “backstreet outfit”…
‘Undercover Guardian reporters and Unite revealed (the workers) were paid £6.50 per hour on average for their shifts at the Shirebrook warehouse after compulsory searches were taken into account. Additionally, workers have been deducted 15 minutes pay for clocking in just one minute late on arrival or on return from a break.
‘The average figure of £6.50 meant workers were being paid 20 pence below the National Minimum Wage. This unlawful deduction was rectified by adding an additional 20 pence per hour to the hourly rate paid although the issue of back payments owed to workers remains unresolved.’
The whole horrifying report can be read online at data.parliament.uk, with a search for ‘Business, Innovation and Skills, Sports Direct’.
Speaking at the select committee meeting, Unite regional officer Luke Primarolo said: ‘In the warehouse there is a culture of fear… People are scared because they are working under a system in which they know they could lose their employment at any moment.
‘They are working under the strike system; it is one of the appendices that we have given you. This is a system that means those who work through the agency actually do not have any recourse to a disciplinary. They do not have any recourse to defend themselves if they are accused of something they have done wrong. They are given a strike.
‘Strikes can be arbitrary, and there is no come back; there is no arguing about it. You can have a strike for spending too long in the toilet. You can have a strike for excessive chatting. You can have a strike for taking a day off sick or having to stay home because your children are sick.
‘The problem with that is when you have people under that much fear, they come into work ill. When you get presenteeism in the workplace that creates a significant health and safety risk, because these people are now not only a risk to themselves but they are a risk to those they are working with.
‘When we refer back to the Freedom of Information Act with East Midlands Ambulance Service, you will see in there not just that it is 110 callouts for the ambulance service, but you will see 34 for chest pains; you will see there are strokes in there; you will see that there are five births or miscarriages or pregnancy-related issues in there, one of which was someone giving in birth within a toilet, and the last one happened in November 2015.’
Such are the jobs that workers and youth are offered – not in the nineteenth century, but today!