The Business, Innovation and Skills committee has published a 37-page report following an inquiry into the sportswear retailer’s treatment of employees at its shops and warehouses, reports The Telegraph.
Iain Wright MP, chair of the BIS committee, said that the evidence represented a “disturbing picture of the working practices and business model at Sports Direct” for which Mr Ashley “must be held accountable”.
The Sports Direct founder gave evidence to the BIS committee last month despite earlier attempts to avoid a public grilling in Westminster.
During the session Mr Ashley admitted for the first time that Sports Direct had effectively paid staff below the minimum wage because of the time it took to search them leaving the warehouse, for which they were not paid. He also revealed that HM Revenue and Customs was investigating the sportswear retailer as a result.
The tycoon said that he visited Sports Direct’s warehouse once a week but had no knowledge of the various harassment claims and said that he could not be “responsible for every single thing that goes on at Sports Direct”, admitting that the £1.6bn company he started 34 years ago had “outgrown” him.
Mr Wright said that the evidence the committee had received suggested that “Mr Ashley was turning a blind eye to conditions at Sports Direct in the interests of maximising profits or that there are serious corporate governance failings which left him out of the loop in spite of all the evidence”.
The BIS Committee published a series of accounts of worker mistreatment, including staff being penalised for taking a short break to drink water and for taking time off work when ill under Sports Direct’s “six strikes and you’re out” policy.
During the evidence session allegations also surfaced of some workers being promised permanent contracts in exchange for sexual favours, which Mr Ashley said was “repugnant, disgusting” behaviour. Other evidence pointed to serious health and safety breaches, with repeated ambulance calls to the Shirebrook warehouse including one case when a woman gave birth in the toilet.
Mr Ashley has already committed to undertaking a review into workplace practices and said he would report to MPs within 90 days, although he said that corporate governance “is a subject outside of working practices and will therefore not be included in the report”. Mr Wright said that he would continue to hold “Mr Ashley’s feet to the fire”.
“This shows parliamentary scrutiny works, if he reports back and we see there have been changes, there will be a big tick in a box and we will publicly praise him, and if not, we will publicly berate him”.
A spokesman for Sports Direct said: “We will study the contents of the committee’s report very carefully. It is our policy to treat all our people with dignity and respect.
“We are pleased to see that the committee has recognised Mike Ashley’s commitment to engage in addressing any shortcomings in the working practices at Sports Direct.”
The select committee also said it was “disgusted” by the poor evidence given by the agency companies Transline and The Best Connection, which supply around 90pc of Sports Direct’s warehouse workers in Shirebrook.
Following detailed evidence from the Gangmasters Licencing Authority, the MPs have concluded that “we believe that Transline deliberately misled the committee in their evidence to us”.
The MPs have called on Transline to explain itself within two weeks “in view of the seriousness of this action, which could be considered contempt of Parliament”.
“The Committee’s report finds it irresponsible, if not reckless, that Sports Direct pay £50m to The Best Connection and Transline when these agencies do not seem to have a basic understanding of employment law and practices,” the report said.
