The sportswear firm, Sports Direct, has agreed to pay its workers around £1m in wage arrears.
Sports Direct boss Mike Ashley admitted that his company broke the law, by paying staff less than the minimum wage. Trade Unions have said that they expect the back pay could be anything up to £1,000 for some workers and will be backdated to May 2012.
Back in June, the sportswear firm was investigated by HM Revenues and Customs.
A select committee inquiry also examined Sports Direct’s working practices. The company admitted to MPs that they had paid staff at its Shirebrook premises less than the national minimum wage. This was due to the length of time it took for them to be searched when they left the warehouse, working time they were not paid for. This meant that their pay fell below minimum wage.
Staff that were directly employed by Sports Direct or through employment agency The Best Connection, should get their full back pay by the end of the month.
However, workers that were employed by the recruitment agency Transline, may not get all the money paid back to them. The agency took over the contract two years ago and is refusing to reimburse staff from before then.
Last year, the Guardian carried out an investigation into Sports Direct that discovered that a large number of the warehouse team were subject to an usually high level of surveillance. There was also rigorous searches, unpaid time, and workers at risk of being sacked if they received six strikes for ‘offences’ such as being off sick, taking long toilet breaks and for making mistakes.
Mr Ashley told the inquiry that he has been struggling to control the company for some time and is looking to reorganise the company’s senior management.