Last week I wrote about the greed and leadership failures which led to the demise of BHS. Sir Philip Green, the billionaire former owner of BHS, bulldozed his way through the decision to sell the retailer to a bankrupt with no experience in retail whatsoever.
The Business, Innovation and Skills Select Committee, which I chair in parliament, also recently looked at another billionaire retailer and the manner in which he operated his business model and working practices. This was Mike Ashley, Deputy Executive Chairman, founder of and majority shareholder in Sports Direct, who also owns Newcastle United Football Club. We found that Mr Ashley should be held accountable for the appalling working conditions and practices in Sports Direct’s shops and at the Shirebrook warehouse in Derbyshire.
I consider workers’ conditions to be hugely important. When he gave evidence to us, Mr Ashley admitted for the first time that employees had been paid below the national minimum wage. We also heard accounts of workers’ mistreatment, including staff being penalised for such matters as taking a short break to drink water during a hot shift and being frightened to take time off work when they or their children were sick because they would face getting sacked. There were also allegations of female workers being promised permanent contracts in exchange for sexual favours. There was also an example of a woman giving birth in the toilets at the warehouse.
These working practices are closer to a Victorian workforce than that of a modern retailer on Britain’s High Street in 2016. It does seem incredible that Mr Ashley, who by all accounts is a very hands-on boss, was unaware of these appalling practices. This suggests that he was either turning a blind eye to conditions in his company in the interests of maximising profits, at the expense of workers’ conditions, or that there are serious management failings which left him out of the loop in spite of all the evidence.
We looked specifically at terms and conditions for staff at Sports Direct, and what we found was appalling and extreme. However, it would be naive to suggest that this sort of culture and practice only occurs in one company. I’m concerned that this business model, of squeezing workers’ safety and terms and conditions, is becoming increasingly widespread. Since our report was published, I’ve received emails from up and down the country from people who work for several companies, who stated that the conditions we found at Sports Direct are being replicated at other firms.
This is not the sort of business model that we want to see thrive in modern-day Britain. This particular type of working practices, where people have little rights and face intimidation and insecurity, through zero hours contracts and bullying, should be stamped out.