Friday morning has seen a remarkable event, with Mike Ashley publicly responding and reacting to criticism and pressure from outside sources.

The spotlight on the way Mike Ashley runs his Sports Direct empire has intensified in recent weeks as a Guardian undercover investigation further exposed what goes on, with MPs and the media then keeping the pressure on in the aftermath.

Coinciding with their latest financial figures showing next to no growth in sales compared to the previous year, Sports Direct have seen over 20% knocked off the share value.

With Mike Ashley holding 330m shares, approximately 55% of the shares, this equated to over half a billion pounds being knocked off the Newcastle United owner’s personal shareholding.

Sports Direct have taken the unprecedented step of issuing a public statement in response to the recent allegations and whilst naturally they refute the vast majority/all of them, they have announced that Mike Ashley will personally oversee a review in the new year of the company’s use of agency workers.

The relevant part of the SD statement reading (the full statement is below):

Next Steps

Sports Direct always seeks to improve and do things better, listens to criticism and acts where appropriate. With that in mind, as noted above, the Board has agreed that Mike Ashley shall personally oversee a review of all agency worker terms and conditions to ensure the Company does not just meet its legal obligations, but also provides a good environment for the entire workforce. We expect him to start that work in the New Year.

Who knows what, if anything, will actually happen with this ‘review’ but one thing that the episode does tell us, is that Mike Ashley isn’t totally impervious to criticism and can be ‘got at’. Especially when it affects the Sports Direct ‘good name’ and in particular the share price.

For those Newcastle fans who believe that campaigning against Mike Ashley’s ownership of Newcastle United is worthwhile, this crack in Ashley’s armour will be very welcome.


18 December 2015

Sports Direct International plc:

Statement regarding employment practices

The Board (“we” or “us”) of Sports Direct International plc (“Sports Direct” or “the Company”) notes the continued commentary regarding the working conditions of its employees and casual workers. To date, Sports Direct has sought to address questions relating to its employment practices on a case-by-case basis directly with the enquirer, but it has become evident that by doing so various parties have chosen to ignore the facts provided and have continued to present an unfair portrayal of the Company’s employment practices. Sadly, it is also now clear that some others have chosen to rely on this portrayal when making public statements about Sports Direct, rather than obtaining information directly from the Company before commenting.

The Board takes its responsibilities towards all the Company’s stakeholders, be they staff, contactors, suppliers or customers, extremely seriously. Without our commitment to our staff and the implementation of a performance-led culture which encourages success, there is no way Sports Direct would have been able to grow from a single sports shop over 33 years ago to the global retailer it is today. The Board believes Sports Direct is a major contributor to all the communities and countries in which it operates; not least, since Sports Direct became a public business in 2007, it has contributed over a billion pounds in tax to the UK exchequer.

The Board is today issuing this statement setting out the key facts about the terms and conditions of Sports Direct’s workers. We hope that by doing so, the unfounded criticisms will cease. To be clear, we value the continuing hard work of the Company’s entire workforce, both employees and casual workers.

Warehouse agency workers

Sports Direct directly employs a number of staff in the Shirebrook warehouse. The remaining workers in the warehouse have contracts with one of two main agencies the Company uses to staff the warehouse. These contracts are on an agreed (between the worker and the agency) contracted hours basis. No Sports Direct employees are engaged in the Shirebrook warehouse on a ‘zero hour’ contract, and the main agencies have confirmed to us that none of their workers are engaged on a ‘zero hour’ contract.

The two main agencies that Sports Direct uses to provide workers at Shirebrook supply workers to hundreds of companies nationally including many retail warehouses. The agencies use the same core terms and conditions for all their employees (totalling c. 35,000 across the UK), with some limited localised variations. A review of all the terms and conditions applicable to the agency workers supplied to Sports Direct (including, inter alia, the operation of the strike system) will be undertaken, and we will be considering implementing appropriate additional variations once that review is completed.

Neither agency workers nor employees are subjected to ‘naming and shaming’ via publication of a league table identifying individuals by name. The Company uses an anonymous ranking system to monitor performance. An individual’s unique number (known only to the employment agencies, the Company and the worker) benchmarks staff against the anonymised data of their peers. Individuals can check their performance, should they wish to do so.

The warehouse tannoy is not used to ‘harangue’ or ‘name and shame’ staff; the tannoy is used for logistical reasons, for example, to redeploy staff to other areas of the building or to let staff know that a truck is waiting for stock to be dispatched.

Sports Direct does not penalise its staff for being ill. Sanctions may be applied if workers fail to follow the Company’s reasonable sickness absence notification procedures, which are in line with industry best practice. The Company is not aware of any occasions on which sick children have not been able to be collected from school by their parents. Sports Direct allows staff time off to look after dependants in such circumstances.

Neither Sports Direct nor the agencies it uses discriminate in favour of or against any applicant or worker on the basis of nationality or for any other reason. Both the Company and the agencies with which it works are equal opportunities employers. There are workers of various nationalities, including local British citizens, currently working in the warehouse. Neither the Company nor the agencies distinguish between workers of different nationalities; Sports Direct and the agencies value the contribution of all workers equally.

Sadly, all companies have to be cognisant of theft from warehouse operations. As such, there is a need for some security measures to be in place at Shirebrook. One simple and sensible way of managing this issue is to ensure that workers do not wear the clothing brands stocked in the warehouse. This is not an unusual practice in many retail companies’ warehouse operations. There are of course numerous other brands that staff can easily wear.

All employees, agency workers and visitors, including executive management and Board members, are subject to random searches on leaving the Shirebrook warehouse. Trained security staff conduct random searches and the Company continues to keep the process under review, with the aim of reducing any inconvenience to staff as much as possible.

Retail casual workers

Sports Direct is not alone in using ‘zero hour’ contracts. A significant number of retailers use ‘zero hour’ contracts in their shops (as well as other companies, government and local government employers), as all parties appreciate the flexibility provided by these contracts.

Sports Direct ‘zero hour’ terms of engagement include holiday pay, and sick pay is payable where the relevant criteria for statutory sick pay are met. Sports Direct ‘zero hour’ terms do not prohibit a casual worker seeking work from another company.

A significant number of casual workers have moved from ‘zero hour’ terms into permanent employment when the circumstances allow (for example, when the worker wishes to apply for a permanent role if one becomes available). Many of these workers have developed very successful careers within Sports Direct, including the Chief Executive, senior head office management, regional managers, area managers, store managers and many more.

Staff rewards

Virtually all casual retail workers are eligible for bonus payments in addition to their contracted hourly rate of pay. In November 2015, over 80% of retail casual workers achieved a performance-related bonus.

Sports Direct also operates one of the most successful share-based employee incentive schemes in the UK, which is open to around 2,500 participating employees.

The historical and current bonus arrangements are an integral part of the Company’s reward culture and have led directly to a significant improvement in Sports Direct’s financial performance. These arrangements have ensured that the staff are able to share in the Company’s success.

Confidential hotline

Sports Direct operates an anonymous hotline that enables its staff to report concerns and/or make complaints confidentially, with no risk of reprisal.

Next Steps

Sports Direct always seeks to improve and do things better, listens to criticism and acts where appropriate. With that in mind, as noted above, the Board has agreed that Mike Ashley shall personally oversee a review of all agency worker terms and conditions to ensure the Company does not just meet its legal obligations, but also provides a good environment for the entire workforce. We expect him to start that work in the New Year.