Yahoo Finance Sports Direct Faces Allegations Over Workers
Sports Direct has defended the way it treats its workforce after an expose of working conditions among the retailer's warehouse staff.
The FTSE 100 firm, controlled by Newcastle United owner Mike Ashley, was accused of a series of practices including sharp reductions from pay packets for clocking-in just one minute late.
An investigation by the Guardian newspaper into working practices at its warehouse in Shirebrook, Derbyshire, also looked into how staff were subjected to rigorous searches at the end of shifts.
It (Other OTC: ITGL - news) said the time spent undergoing these was unpaid and the searches - undertaken for fear of potential theft - went as far as rolling up trouser legs and showing the top of underwear.
The probe also found that workers were harangued over a public address system for not working fast enough.
Its publication threatened to overshadow Sports Direct's half-year results, which showed pre-tax profits up 25% to £187.3m in the six months to 25 October.
Chief executive Dave Forsey said it was looking forward with confidence to next year which will see the Olympic Games and European football championships take place.
But shares fell 11% on the day after the results slightly missed expectations. Revenues were flat and sales at its premium lifestyle division were down 12%. Keith Bowman, equity analyst at Hargreaves Lansdown (LSE: HL.L - news) stockbroker, said concerns regarding the pace of sales were likely to persist.
The group has been the subject of sustained criticism over its use of controversial "zero hours" contracts for employees
In the half-year report, chairman Keith Hellawell said casual workers were an "integral component" of the workforce.
He said: "To be clear, no warehouse workers are on 'zero hour' contracts, all have contracted hours with the agencies.
"In retail, casual workers find the flexibility offered by these arrangements very useful. We comply fully with all applicable legal requirements and will continue to keep these under review."
Mr Hellawell said the company had addressed the issue of "the inconvenience experienced by some warehouse workers from the logistics of the security process when exiting the warehouse" after it was raised at the group's annual general meeting.
"Following a review the process has been streamlined which has led to a reduction in waiting time," the chairman said.
Sports Direct also revealed that around 2,000 employees had benefited from the vesting of a share bonus scheme in September, working out at an average of £13,300 per person. A further scheme is expected to vest in 2017 covering 2,500 employees, worth around £40,000 per person.
However many members of the group's 27,000-strong workforce will not be eligible.
Sports Direct did not respond directly to the allegations in the Guardian but pointed to the remarks in its half-year report.
The taxman said it would not comment on individual cases.
But HMRC told Sky News: "We take action on all direct complaints of underpayment that we receive and have identified well over £3m in pay arrears for over 26,000 workers in 2014/ 2015 through targeting high risk employers.
"We will soon begin fining scrooge employers 200% of any pay arrears" - a result of new rules due to come into force next year.
