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Sports Direct admit to not paying staff minimum wage

By June 8, 2016March 25th, 2019Case Review, Current Affairs
Sports Direct | HR Solutions

Sports Direct has come under-fire for ‘unacceptable’ and ‘unreasonable’ working practices at the firm.

The sports chain faces multi-million pound fines, after owner Mike Ashley admitted to breaking the law when he did not pay the national minimum wage to his staff. Ashley also risks being removed from being a company director.

Ashley was answering MPs questions at a business, innovation and skills committee, investigating the company’s employment practices. He admitted that his company’s policy of delaying staff when they had finished their shift to search them before they could leave, meant that they were effectively paying staff less than the national minimum wage. He also agreed that it was wrong for his staff to be deducted 15 minutes of pay, if they arrived just one minute late to work.

Ashley claimed that he is having difficulty controlling his company and may look at reorganising the top level management. He also said that he would look into the company’s controversial policy of sacking staff if they have received sick black marks within six months.

In an investigation last year, The Guardian sent undercover reporters into the stores and discovered the firm was paying staff less than the legal minimum rate at the time.

Firms that breach the legislation can be forced to pay arrears to workers and be fined up to 200% of those arrears. Ashley told MPs that HM Revenue & Customs is investigating his company and he is in discussions with staff about agreeing a deal over back pay.

A spokeperson for HMRC said: “This isn’t about doing deals. While we don’t discuss individual cases we won’t accept anything less than what’s owed. Our role is to investigate all cases where we believe an employer is not paying its workers the national minimum wage to ensure those workers receive what they are owed under the law.”

The Committee was also told that some employees were paid through a pre-paid card. They had to pay £10 for a card, pay a monthly fee of £10, plus 75p to be able to use it in an ATM machine, and then 10p for each text message that confirmed the card had been used.

Ashley had repeatedly refused requests to appear at parliament to respond to questions on the employment practices at his company. MPs are expected to try to have him found in contempt of parliament and pursue a Commons vote to decide if Ashley was a suitable person to run a company.


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