Sports Direct to put workers' representative on the board

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Sports Direct, the retailer under fire for the treatment of its staff, says it will now put a workers' representative on its board.

The move came hours after it said it would abolish zero-hours contracts for its directly employed, casual retail staff.

It will now employ them for at least 12 guaranteed hours a week instead.

However almost all staff at the firm's troubled Shirebrook warehouse are agency workers and are not eligible.

Sports Direct said the workers' rep would "give workers a voice at the highest level and to help ensure that all staff are treated with dignity and respect".

It is not clear how the representative will be chosen, but it is expected that he or she will be elected.

The retailer's founder, Mike Ashley, said the board move will offer a "great benefit" and provide "input [that] is invaluable".

"I think it will be the one no-brainer that Sports Direct should have been doing," he said in a video interview released by Sports Direct on Tuesday night.

"I want to be the pioneer who gets it done... I am going to make it happen."

'Victorian workhouse'

Earlier in the day, in a report commissioned by the firm, Sports Direct apologised for conditions at Shirebrook and admitted "serious shortcomings" in working practices.

The retailer has been under mounting pressure to overhaul its operations.

It commissioned its legal advisers Reynolds Porter Chamberlain to carry out the review after MPs accused the firm of not treating staff like humans, with working practices closer to "that of a Victorian workhouse than that of a modern high street retailer".

The firm's offer of guaranteed hours will apply to the firm's 18,250 casual staff who work in its stores.

The 4,059 warehouse workers supplied by agency staff, will not qualify for the offer. Just 400 of the firm's warehouse employees are on permanent contracts.

Analysis by Dominic O'Connell, Today business presenter

In football, like most sports, timing is everything.

Mike Ashley, the billionaire owner of Newcastle United and controlling shareholder of Sports Direct, knows this all too well.

The release this morning of the independent review comes just a day before he faces irate shareholders at the annual general meeting.

They, and trade unions, are baying for blood, and while the report may not mollify them, it changes the nature of the headlines the day before the showdown.

The investigation is surprisingly hard on the company. Many had predicted a whitewash, as the law firm involved, Reynold Porter Chamberlain, does other work for Sports Direct.

In a statement the company also promises a review of its corporate governance, and to engage with shareholders.

That olive branch will probably come too late to change the tally at tomorrow's meeting, where chairman Keith Hellawell will almost certainly face the ignominy of having a majority of independent shareholders vote against his appointment.

'Unacceptable' pay

Last year an investigation by the Guardian newspaper revealed that warehouse staff were subject to lengthy security searches which, in some cases, resulted in their pay falling below the legal minimum wage.

And a BBC investigation found ambulances were called out to Sports Direct's complex at Shirebrook, in Derbyshire, 76 times in two years.

In Tuesday's report the firm said its failure to pay some staff at its Shirebrook warehouse the minimum wage was "unacceptable but unintentional", but said it had a new pay policy in place.

media captionMike Ashley told MPs 'I have nothing to hide'

It also said it would ask agencies to suspend their "six strike system" for misdemeanours under which staff were given "a strike" for spending too long in the toilet, excessive chatting or taking a day off sick.

Once an employee had six strikes they were automatically dismissed.

The report found the system "contributed at times to a hierarchical and potentially oppressive model."

Additional changes the firm has promised include:

  • Appointing a full time nurse at its Shirebrook warehouse "who will hopefully be in a position to offer professional advice about when an ambulance is or is not required"
  • Providing additional training for warehouse supervisors to "ensure there should be no culture of fear"
  • Providing a confidential reporting system for victims of sexual harassment
  • Considering a test scheme transferring 10 agency staff a month to Sports Direct
  • A tannoy policy to ensure it is only used for logistical purposes and not to criticise staff for not working hard enough

Shareholder meeting

The report said Sports Direct owner Mike Ashley "takes ultimate responsibility for any aspects of the working practices that were unsatisfactory".

Shareholders have called on the firm's billionaire founder, who also owns Newcastle United FC, to improve both corporate governance and working practices at the company.

However the firm warned that "only so much can be achieved" in the three months since it started to reform its business and it admitted it will take "far longer to improve the general culture".

media captionThe chairman of the Commons business select committee responds to Sports Direct's review.

'Unpleasant surprise'

In June, in an appearance in front of the Business, Innovation and Skills select committee investigating working conditions at the firm, Mr Ashley admitted the firm had "probably" outgrown his ability to run it.

He said at the time that much of what he'd found out, after starting an internal investigation into how staff were treated at its Shirebrook distribution centre six months ago, was an "unpleasant surprise".

The firm said it had already commissioned a second review of working practices to monitor progress.

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