Sports Direct, the discount sports retailer owned by billionaire Mike Ashley, says criticism of the company’s employment practices are “unfounded and inaccurate.”
Chairman Dr Keith Hellawell used the retailer’s full-year results on Thursday to say reporting on Sports Direct’s use of zero-hour contracts — where staff aren’t guaranteed any work, get less pension and sick rights, and are called in simply when the employer needs them — has been misleading.
He said in a statement: “We comply fully with all legal requirements which relate to casual workers, including sick pay, holiday pay, and freedom to gain other employment. Casual workers also participate in general incentive schemes.”
Within the law it may be. But zero-hour contracts are still controversial. Critics argue they give a hugely unfair deal to staff, who can’t predict how much they will earn each month and struggle to plan ahead. The Labour party said they’d ban them if they were elected.
Sports Direct is a prolific user of the contracts, with an estimated three-quarters of its staff under these terms of employment. When the pro-zero-hours Conservative Party won the election in May, Sports Direct’s shares leaped, showing just how central investors see zero-hour contracts to Sports Direct’s success.
But the company’s use of these employee-unfriendly contracts is just one of many criticisms of how the chain treats staff.
A Dispatches documentary for Channel 4 said the company’s Shirebrook depot had a “Victorian” and “sweatshop” environment, and BuzzFeed News obtained a document showing staff can be disciplined for “taking long toilet breaks” and “periods of reported sickness.” Sports Direct reportedly also makes one of the lowest contributions to staff pensions out of all FTSE 100 companies.
So regardless of whether it’s zero-hour practices are completely legal, it looks like it has some questions to answer.
Earlier this year MPs tried to grill Sports Direct’s billionaire founder Mike Ashley on his employment practices but he managed to avoid attending the hearing.
Sports Direct said today that it is investing heavily in staff training and also said 2,000 staff are getting a combined 5 million shares under an employee share scheme award plan laid out in 2011. These shares are worth around £37 million ($US57.8 million) at the current share price, but zero hours employees won’t get any.
The company also announced today:
- Revenue rose 4.7% last year to £2.8 billion ($US4.3 billion).
- Pre-tax profit rose 20.5% to £300.3 million ($US469.2 million).
- The company is launching another employee share scheme, which will see up to 25 million shares handed to staff if certain performance targets for the business are met.