Sports Direct is subjecting workers to “appalling” conditions where some aren’t paid the national minimum wage and others claim they were offered contracts in exchange for sexual favours, according to MPs.
The retailer’s employees are treated like “commodities” instead of human beings and it operates more like a “Victorian workhouse” than a high street chain, a damning report from the Business Committee said.
Sports Direct staff were punished for taking short breaks to drink water or for being off sick, the disturbing report from MPs claimed.
They held Sports Direct founder Mike Ashley accountable for “appalling” conditions, which they warned could become the norm across Britain.
Ashley’s appearance in front of the committee in June revealed a “culture of fear” so pervasive that women were allegedly giving birth in toilets rather than not showing up for work.
“Workers at Sports Direct were not being paid the national minimum wage, and were being penalised for matters such as taking a short break to drink water and for taking time off work when ill,” the report stated.
“Some say they were promised permanent contracts in exchange for sexual favours.
It added that it was “incredible” that Ashley wouldn’t be aware of the practices.
“For this to occur in the UK in 2016 is a serious indictment of the management at Sports Direct.”
“For this to occur in the UK in 2016 is a serious indictment of the management at Sports Direct and Mike Ashley, as the face of Sports Direct, must be held accountable for these failings.
“It’s seems incredible that Mike Ashley, who visits the Shirebrook warehouse at least once a week, was unaware of these appalling practices.
“This suggests Mr Ashley was turning a blind eye to conditions at Sports Direct in the interests of maximising profits or that there are serious corporate governance failings which left him out of the loop in spite of all the evidence.
“This model has proved successful for Mr Ashley and there is a risk this will become much more the norm in Britain.
“A modern and developed economy focused on innovation and supporting entrepreneurialism and enterprise cannot be allowed to operate like this.”
The MPs said they were “deliberately mislead” by one of the employment agencies that staff the retailer, and that evidence presented by Transline and another agency, Best Connection was “woefully poor” and in some cases incorrect.
It urged Transline to clarify some of its evidence for the inquiry.
“We were also disgusted at the poor evidence given by the agency companies, who deduct money from low-paid workers without proper explanation and justification,” said Committee chair Wright.
Mr Wright told the Press Association he welcomed moves by Mr Ashley to engage with the Unite union, adding he was determined to continue checking on progress made in improving conditions for the workers.
The MPs said it was “irresponsible, if not reckless”, for Sports Direct to give the two employment agencies £50 million when they did not seem to have a basic understanding of employment law.
The MPs said they would visit Shirebrook, called for a review of health and safety in the warehouse, and said the Gangmaster and Labour Abuse Authority should look into employment practices.
A Government spokesman said: “This report details some extremely concerning findings. Everybody deserves to be treated with dignity and respect and the law is clear that pay must be fair no matter who you are or what you do.”
A spokesman for Sports Direct said: “We will study the contents of the committee’s report very carefully. It is our policy to treat all our people with dignity and respect.
“We are pleased to see that the committee has recognised Mike Ashley’s commitment to engage in addressing any shortcomings in the working practices at Sports Direct.”