Sports Direct: A ‘rare feat’

An investment group worth £14.5 trillion has taken the unusual step of joining Unite and MPs in calling for an independent review and “fundamental reform” at rogue employer Sports Direct.

Unite assistant general secretary Steve Turner described the circumstances as a “rare feat,” while urging the company to move away from exploitative zero-hour agency contracts and employ people directly.

He said, “Sports Direct has achieved a rare feat in uniting the City, politicians and Unite in the need to address deep seated problems with its work practices and corporate governance.”

The Investor Forum group, which represents 27 per cent of Sports Direct shareholders, including Standard Life, Aviva, Legal & General and Fidelity, criticised corporate failings at the beleaguered retail chain and rubbished an in-house employment abuses investigation set up by majority owner Mike Ashley.

‘Highly unusual’

Investor Forum’s executive director Andy Griffiths said it was “highly unusual” for the group to publicly criticise a company but they have not “received an appropriate level of commitment to respond to investor concerns and, as a result, the usual options have been exhausted.

“We remain committed to engaging with the Board constructively to enhance the value of Sports Direct’s franchise but this requires the company to reconsider its proposed actions and acknowledge the need for fundamental reform,” Griffiths said.

“If they are unable to do so, then members of the Board will have to ask themselves whether they are able to effectively represent the interests of all shareholders.”

Investor Forum said a review carried out by the company’s own lawyers into employment practises and a proposed external board evaluation, were neither independent nor comprehensive enough “to reflect the breadth and magnitude of reform that is required.”

Instead, they called on Ashley to implement a “wide-reaching independent review of the entire governance practises,” as recommended by a department of business (BiS) select committee.

Ashley was forced to appear before the committee in June after a Unite campaign and undercover investigation by the Guardian exposed “Victorian” work practises at the firm’s Shirebrook warehouse, including employees being mistreated and paid less than the minimum wage.

Thousands of warehouse workers are now due back pay totalling around £1m, while the company and its employment agencies are facing fines of up to £2m, after Mike Ashley admitted breaking the law during the BiS committee hearing. Sports Direct’s treatment of its store workers is also under scrutiny.

The forum advised other shareholders to vote “with great care” at Sports Direct’s annual general meeting on September 7, echoing a call by Unite for shareholders to back a resolution at the meeting for an independent review.

Unite also called on Sports Direct to confront the “endemic abuses” within its labour supply agencies and move long standing agency workers onto direct, permanent contracts.

Both the Transline and The Best Connection agencies, who supply over 3,000 agency workers to work for Sports Direct in its Shirebrook warehouse, were warned of being in contempt of parliament and lying by the BiS committee.

“The board need to be clear that the actions and behaviour of the agencies Transline and The Best Connection will continue to damage the retailer’s battered reputation unless they act,” said Unite assistant general secretary Steve Turner.

“Unite will continue to engage positively and constructively with Sports Direct where possible and urges the retailer to continue dialogue with us to ensure Mike Ashley’s ambition of becoming an exemplar employer doesn’t remain a pipe dream.”