Worse than zero hours: The real revelation that came from the Sports Direct inquiry
'˜No workers are on zero hours contracts,' says Mike Ashley. He might not be lying, but in truth they're on something worse.
Sports Direct has pervaded a ‘culture of fear’ at its Shirebrook warehouse, where workers are too scared to take sick leave, raise grievances and forced to take any position offered by their recruitment agency, the inquiry heard.
- £11,000 annual cost per agency worker (actual salary unknown)
- 76 ambulances called to the Shirebrook site in two years
- 10 days guaranteed work per employee on ‘exploitative ‘336’ contracts
- Six years spent on zero-hours contracts for some workers
After months of dodging MPs, founder Mike Ashley has now admitted that some workers were earning below minimum wage while others were fined for lateness, practices he agreed were ‘unacceptable’, and need to change.
And the inquiry by the Business Innovation and Skills select committee, which looked into working conditions at the main Shirebrook base has brought shocking revelations to light, forcing Mike Ashley to admit that some heinous cultures in the workplace are ‘repugnant’ - prompting him to agree in an astonishing change of heart, that he may have lost control of his behemoth of a business.
In front of the whole nation’s press, officials from Unite the union reported to the committee on revelations which were first brought to light by the Chad and have since snowballed into undercover reporting by the national media, an investigation by HMRC and now a public inquiry panel.
‘Repugnant’ Mike Ashley’s word for managers who sexually harass female employees
‘Unacceptable’ how he brands the practice of fining workers 15 mins for one minute’s lateness
General secretary of the union Steve Turner told of the ‘culture of fear’ - ‘a business model with exploitation at the very heart of it’ and described the company’s ‘contempt for human rights’.
He said: “There’s no process - there’s no access to justice. For most zero-hours workers and short hour workers you’re simply denied work if you raise a grievance.”
We reported in October that a disproportionate number of ambulance calls were made to the facility- with 76 in the space of two years, 36 of which were life threatening and five relating to pregnancy. When quizzed on the number Mr Ashley said it was impossible for this many emergencies to occur.
He said: “Let us assume that every single call-out was needed. How are people getting injured at Sports Direct? You cannot have that number of serious incidents - it is impossible.”
He later added: “I was told that we were over-quick to pick up the phone for the ambulance service.”
But the calls really highlighted the most shocking issue at the workplace - that a ‘culture of fear’ was causing workers to neglect their health in the face of sanctions under a ‘strike’ system for offences such as chatting, taking too long in the toilet and calling in sick. Worse even, said Unite representative Luke Primarolo, that workers feared their hours would disappear completely. This ‘culture of fear’ he described was generated by zero-hours contracts imposed under draconian conditions by staffing agencies, Transline and Best Connection.
He said: “In the warehouse there is a culture of fear. People are scared because they are working under a system they know they could lose their employment at any moment.”
The workers rights activists outlines the draconian ‘strike system’ which does away with any fair disciplinary procedure and simply terminates contracts if they are accused of six misdemeanours - often very arbitrary ones such as taking long toilet breaks, calling in sick and wearing branded clothes - over a six month period.
Baffled MPs questioned the seriousness of the strike system after hearing about the case first revealed by the Chad in 2014, of a 28-year-old woman who gave birth on the toilet floor because she was scared to take time off.
Chairman Iain Wright asked: “You aren’t seriously suggesting you’re given a strike if you’re giving birth?”
Steve Turner Answered: “Any person who receives six strikes in a six month period has their assignment ended. So people come to work, pregnant women come to work and end up being taken to hospital by ambulance, and one occasion giving birth.”
The prevailing culture of fear was putting lives at risk, they added, as some 76 calls were made to East Midlands Ambulance service to the site over the past two years, 36 of which were life threatening and some even involving cardiac arrest.
Local rep Luke Primarolo said: “When you have people under that much fear they come to work ill. When you have presenteeism in the workplace you have a health and safety risk.”
And the pervasive theme of the inquiry however led to the culture being handed down by the agencies who supply the Labour. Transline and Best Connection were engaged by Sports Direct, apparently to meet the staffing needs of sudden web growth, and in the past 10 years thousands of workers have been engaged in ‘precarious contracts at Shirebrook. But unlike the ‘flexible’ contracts lauded by the government for offering flexibility to workers and employers these are ‘worse than zero-hours, even’, Luke Primarolo told the Chad.
After the government banned a clause in zero-hours contracts preventing staff from seeking work elsewhere, the agencies adopted a new scheme which takes workers back to an environment where they have a set minimum number of hours per year, and after that there is no obligation to offer work, while also forcing applicants to take up any assignment they are given, and any attempt to look for work elsewhere ends in termination of the contract.
He said: “It is effectively, a zero-hours contract but without the opportunity to work somewhere else. But if you don’t turn up to work you are dismissed. They got round this with the ‘Sweden Derogation’, a loop hole which means you are now actually an employee of the agency. Now the agency only has to give you 336 hours per year, the minimum they’re allowed to. After that they have no obligation to give you any work but if you look for work elsewhere they terminate your employment. So for one month you are an employee, but after that you’re back on zero hours.
“In reality its worse than zero-hours. It leaves the worker completely at the will of the agency, and leaves the door open to exploitation of the worse kind.”
Mike Ashley on the stand
Sports Direct boss Mike Ashley has tried dodged his parliamentary appointment for months, and eventually said he would attend to stand up for the company, stating he had ‘nothing to hide’.
So it was an astonishing change of direction when Ashley admitted to a number of failings at the company, and even suggested he may be stepping down from the helm of the company. When asked if he has lost control of his ‘oil tanker’ of a huge corporation, he said ‘probably’ and went on to say a review into company practices may be better suited to someone else. He added: “I can agree that in some ways I am not the right person because I am not an expert on every area of employment, obviously.”
When questioned on zero-hours contracts he admitted there were too many in the company
“We should be able to offer better contracts with guaranteed hours,” he said.
He also said the practice of fining workers for lateness was unacceptable and he had brought in changes to smoothen security checks to make sure workers pay didn’t effectively fall below the national minimum wage.
But despite a great deal of genuine modesty and sincerity, the tycoon distanced himself from a lot of the failings at the company, saying “I can’t look after everything at Sports Direct.”