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MPs have accused one of Europe’s biggest retailers of not treating its workers like humans. A report by the Business, Innovation and Skills committee states Sports Direct founder Mike Ashley must be held accountable for company failings.

Evidence suggested Sports Direct’s working practices were similar to those of a Victorian workhouse, one MP said.

In response, Sports Direct said in a statement that its policy is to treat all people “with dignity and respect”. It comes after Mr Ashley recently told MPs the firm was being investigated over staff being paid below the minimum wage.

Union officials told MPs that in one case an employee had given birth in a toilet at the company’s warehouse base in Shirebrook, Derbyshire, because she feared losing her job if she called in sick.

Allegations also surfaced of some workers being promised permanent contracts in exchange for sexual favours.

Committee chairman Iain Wright said evidence heard last month by MPs suggested Sports Direct’s working practices “are closer to that of a Victorian workhouse than that of a modern, reputable High Street retailer”.

“It’s seems incredible that Mike Ashley, who visits the warehouse at least once a week, was unaware of these appalling practices,” Mr Wright said.

“This suggests Mr Ashley was turning a blind eye to conditions at Sports Direct in the interests of maximising profits or that there are serious corporate governance failings which left him out of the loop in spite of all the evidence.

“Mike Ashley had to be brought kicking and screaming to answer the committee’s questions.

“To Mr Ashley’s credit, when he gave evidence he was open and willing to engage and he is now setting out some of the steps which Sports Direct needs to take to stop these practices recurring.”

The committee said it would visit the firm’s base in Shirebrook, Derbyshire, and “continue to hold Mr Ashley’s feet to the fire”.

What the committee’s report says:

 That representatives of Sports Direct’s agencies – Transline Group and The Best Connection, who are paid £50m a year by the firm – gave “woefully poor, and in some cases, incorrect, evidence”

 It is believed Transline “deliberately misled the committee in their evidence”, which could be considered contempt of Parliament

 The agencies’ six strikes policy – whereby an employee is dismissed if they receive six strikes – “gives the management unreasonable and excessive powers to discipline or dismiss at will”

 The way the business model is operated involves treating workers “as commodities rather than as human beings”

 There are still unanswered questions over when back pay will be received

 The practice of deducting 15 minutes of pay for clocking in one minute late on arrival, or on return from a break, has been changed. Now, the system rounds up in segments of five minutes, for example, if a person is four minutes late, they will lose five minutes of pay. However, the committee said this still seems “ungenerous” and recommended Mr Ashley considers rounding down, so a person is not punished if they are four minutes or less late

 Transline made claims which were later refuted by the Gangmasters Licensing Authority, casting “doubt on the probity of Transline and on the reliability of their witnesses”

 Mr Ashley and the agencies should review the health and safety provisions in the warehouse and report back to the committee. Bolsover District Council and the Health and Safety Executive have also been encouraged to “take a more active role” in overseeing provisions are being adhered to

 Mr Ashley should lead a review into his corporate governance arrangements to improve the running and reputation of the company

In a letter to MPs on 12 July, Mr Ashley said work had begun on a review into working practices and a written update would be ready in 90 days. The Newcastle United owner said he had contacted union Unite “with a view to opening a constructive dialogue”.

Mr Ashley confirmed all workers – permanent and agency staff – were now paid above the National Minimum Wage (NMW), but said these pay rises were not “back pay” – which relates to HMRC’s investigation.

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