Sports Direct to compensate for paying less than national minimum wage
Mike Ashley's trainer hangar company, Sports Direct, have agreed that they'll compensate their warehouse employees, after it turned out they have paid them less than the national minimum wage.
This is an agreement with HM Revenue & Customs, revealed by the union Unite.
The union gave evidence against the company regarding pay and conditions to parliament's business, innovation and skills select committee this week. Mike Ashley himself is facing MPs as we speak.
Ashley spoke in a letter to staff, saying that he'd be appearing at the committee because "we have nothing to hide".
You'll remember there has been a lot of criticisms levelled at Sports Direct, over zero hour contracts and the claims that staff were being paid less than the national minimum wage. There's been so much bad press, that the value of the shares for Sports Direct have dropped dramatically - 45% in 12 months, to be precise.
Ashley admitted, to MPs, that the company unwittingly broke the law regarding minimum pay, thanks to 'bottlenecking' with security checks for staff. Adding that "some things have come as a surprise", when speaking about the company's prevailing culture, he said it "sets itself", adding; "I did not build Sports Direct, Sports Direct built me."
An investigation by the Guardian showed that warehouse staff were forced to go through searches at the end of each shift, which were lengthy and unpaid. There was also harsh deductions from their wages if they clocked into work for being one minute late.
Steve Turner, assistant general secretary of Unite, told MPs: “No workers have yet received back pay. We have been in discussions with the company and HMRC. There is an agreement with HMRC and we are currently in the process of balloting our members ... But this only affects employees [and not around 3,000 temporary workers]".
Ashley, at the committee, said on the topic of unions: "I can do a better job for the people at Sports Direct than Unite"
Sports Direct have said that there's going to be a review of their practices, as well as a pay rise for staff.
Mike Ashley also agreed that there are too many of their shopfloor workers on zero hours contracts, which is the first time he's admitted in a number of years.