Sports Direct in Trouble Over Zero Hours Contracts and Failing to Pay Minimum Wage
Sports Direct founder Mike Ashley appeared before a Parliamentary committee yesterday, answering MP’s questions on working conditions,
zero hours contracts and national minimum wage.
Sports Direct has come under fire in the last couple of years due to most of their staff being on zero hours contracts. This in part led to the Government introducing legislation prohibiting exclusivity clauses in zero hours contracts.
Emma O’Leary is a consultant at ELAS Business Support, a
leading UK employment law advisory service. She explains: “The issue with the type of contract Sports Direct used was that they banned employees from working anywhere but Sports Direct and essentially had employees at their beck and call, whilst at the same time offering no guarantee or any particular hours or any work at all.”
However, Emma says,
zero hours contracts are not necessarily a bad thing.
She continues: “When zero hours contracts are properly constructed and not abused then many workers actually like them. A true zero hours contract contains no mutuality of obligation – the employer does not have to provide hours and the worker does not have to accept them. The idea is that they are properly ad hoc contracts – an employer will give them work as and when required and they take it when they can. Someone on a zero hours contract can have as many other jobs as they like, so it really offers workers the flexibility to work around their own lifestyles or other jobs. It can work well in industries such as care where carers do work for a number of care providers, picking up shifts to cover holidays or sickness. “
Mr Ashley admitted during questioning that Sports Direct had paid some workers below the
minimum wage, and said he had discovered ‘issues’ with some working practices, particularly at the firm’s warehouse in Derbyshire.
ELAS consultant Emma O’Leary says: “Everyone knows employees should be paid at least national minimum wage (NMW) for every hour they work. Many employees will work above and beyond their contracted working hours – for some NMW does not impact on this as they earn well above the minimum so if we averaged out all their hours, they would still comfortably hit NMW. However, where your employee is on NMW it’s essential to check that for every moment you require them to work, they are paid the NMW on average for every hour. Requiring employees to stay late to clean up at the end of a shift, for example, is fine but it’s working so they need to be paid.”
To ensure your business doesn’t suffer the same fate, call ELAS Business Support today on
0161 785 2000