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Sports Direct: Rogue employer or tip of the iceberg?

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Sports Direct has been accused of ‘gulag-like’ conditions. But are such practices actually more widespread?

Sports Direct founder Mike Ashley’s recent appearance at a Business, Innovation and Skills (BIS) Committee evidence session, regarding poor working conditions and health and safety concerns at the company’s Shirebrook site, has prompted questions on whether such conditions are more widespread in the UK than many have thought.

The committee followed a number of investigations by the Guardian, the BBC, and Channel 4 that uncovered evidence of unpleasant, cruel and dangerous conditions, including staff being fined 15 minutes’ pay for being one minute late, sacked for taking too many sick days, and unpaid security checks at the end of shifts.

Working conditions at online clothing retailer ASOS also made headlines last month. Allegations comprise regular body searches –including, at its distribution centre in Yorkshire, every time an employee goes to the toilet – guards posted outside toilets and the staff canteen, and people having to urinate at water stations because toilets are a 15-minute walk away. Workers are allegedly subjected to ‘flexi’ shifts where they can be told not to turn up, or to work extra hours without notice.

Adding to concerns that Sports Direct conditions may be just the tip of the iceberg for UK Plc, is the recent case of DJ Houghton Catching Services. The Kent-based firm was found liable for trafficking Lithuanian men to work on farms (producing eggs destined for major supermarkets), for paying less than agricultural minimum wages, for unlawfully withholding wages, and for depriving workers of facilities to wash, rest, eat and drink.

Gemma Reucroft, UK&I HR director for Tunstall, said Sports Direct was not a one-off instance: “We should not lull ourselves into a false sense of security; while the conditions at Sports Direct have attracted widespread publicity and condemnation, partly due to a campaign by the union Unite, this is not an isolated case. We know that there are other rogue employers, other dreadful working conditions right here in the UK, in 2016, despite the employment legislation that exists purportedly to protect employees.”

Will Peachey, senior VP, group HR transformation at Capgemini, said that the issue is businesses operating at the boundaries of the law – something companies have always done to remain competitive. “When markets change one of the key areas that comes under pressure is how companies treat their people,” he told HR magazine.

Describing the pressures online retail has exerted on Sports Direct he said: “You can see this in Uber; is a driver an employee or an independent contractor? When you think about Sports Direct it faces just as big a market change in retail as Uber has made to the taxi industry.”

HR has a clear role to play in ensuring practices remain not only within the boundaries of the law, but also ethical and not a reputational risk to the business. However, added Peachey: “What it means to be employed is a real question for the future of work, and how employment law is managed at the margin will be a big part of the role of HR. While they need to be lawful, often new business models push the margins of the law seeking new areas of value.

“Although it sounds dull, to manage the margin of employment law getting the balance of the business case and attracting the right people are actions that make the HR function truly strategic.”

“As HR professionals we should not be complacent,” added Reucroft. “It is our role to look hard at our own organisations and the working practices within them and make sure that they stand up to scrutiny; that fundamentally you are treating people decently, ethically, legally, and humanely.”