Sports Direct boss Mike Ashley accused of running a ‘gulag’ after grilling from MPs
Appalling picture of life at the firm’s Derbyshire warehouse emerges as he gave evidence to Commons select committee
SPORTS Direct founder Mike Ashley yesterday admitted staff got less than the minimum wage and were fined for being late — as he was accused of running a “gulag” labour camp.
A woman scared of taking time off work even gave birth in the toilets, shocked MPs were told.
Mr Ashley, who also owns Newcastle United Football Club, was being grilled by a Commons committee about conditions at his sportswear chain’s warehouse.
Staff could be sacked for taking days off to look after sick children, chatting too much or spending too long in the toilet in a “six strikes and you’re out of work” regime.
Workers without bank accounts had wages paid by a debit card system which cost them at least £10 a month, the hearing was told.
Dozens of ambulances were also called every year to treat sick staff.
The appalling picture of life at the firm’s main warehouse in former Derbyshire coal-mining town Shirebrook emerged as Mr Ashley gave evidence to the Commons business select committee.
The billionaire confessed the results of his firm’s own six-month review into treatment of staff was an “unpleasant surprise” and he had discovered “issues” which needed addressing.
Mr Ashley, wearing a Newcastle United tie, admitted staff clocking off were held up by security checks which effectively led to them getting less than the then minimum £6.70 an hour last year.
He said wages were raised above the minimum rate in late December and the security bottlenecks were eased after the problem emerged.
Mr Ashley called the practice of fining staff 15 minutes pay for being just a minute late “unacceptable” and he had ordered an end to this.
Earlier, MPs heard from the Unite union about the Sports Direct employee forced to give birth in a toilet.
Responding to concerns over health and safety, Mr Ashley said it was excessive that 110 ambulances were called to the warehouse between January 1 2013 and April 19 this year.
When he said staff were over hasty in calling ambulances, one MP shot back: “I would suggest someone giving birth in a toilet in the warehouse isn’t an over hasty call out for an ambulance”.
I’m the guy who’s responsible for Sports Direct's biggest successes and biggest failures
Mike Ashley
Unite’s Luke Primarolo said there was a “culture of fear” where “people are scared… they could lose their employment at any moment”.
The union’s assistant general secretary Steve Turner likened conditions at the distribution centre to a “workhouse” or “gulag” and also called them “Victorian” and “19th century”.
Union leaders alss
He also agreed some staff on zero-hour contracts, which give no guarantees on weekly working hours, should be transferred to full-time.
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The current balance of 20 per cent full time workers and 80 per cent part-time was wrong, he admitted.
He also pledged to deal with mangers who were “sexual predators” and had sexually harassed female workers, saying: “It 100 per cent should not be going on. They’re repugnant, they’re disgusting.”
Mr Ashley, 51, promised MPs that he would address their concerns but he then quipped: “I’m not Father
I’m not Father Christmas. I’m not saying I’ll make the world wonderful
Mike Ashley
Christmas. I’m not saying I’ll make the world wonderful”.
Trying to explain why Sports Direct had suffered from so many problems, he said it had grown too quickly.
He said: “It’s like going out one day and you’ve got a tiny little inflatable and you’re in control.
“And the next, you wake up one morning and you’re on an oil tanker.”
The billionaire claimed he “can’t look after every single thing” that goes on at the company, but admitted: “I’m the guy who’s responsible for its biggest successes and biggest failures, that’s me.”
In a rare moment of humility, he said: “I can accept the criticism of some of the things that you’ve said to me today would actually lead me to believe that it’s definitely outgrown me... that’s shocked me what you’ve said to me today.”
Mr Ashley also revealed that he had hoped to buy BHS before its collapse last week.
He added: “It’s a logical fit because of the extreme value Sports Direct is known for.
“I’m not a saint but you could have made a success of that business.”
But he refused to answer questions on big pal Sir Philip Green, who sold BHS to a serial bankrupt for £1 last year.
Despite the shocking details to emerge at the hearing, financial observers in the City were impressed Mr Ashley turned up after he had threatened to snub the proceedings.
His company’s share price shot up three per cent as it emerged he was to be present at the Commons committee — and closed the day up 5.4 per cent after his performance.
People are scared… they could lose their employment at any moment
Unite’s Luke Primarolo
Tony Cross, market analyst of Trustnet Direct, commented: “It has been an incredibly long time in the making but Mike Ashley finally showed up in Westminster yesterday, as he tried to draw a line in the sand with regard to Sports Direct’s working practices.”
He said Mr Ashley had been “largely remorseful”.
And he added: “Yes, being a better employer will almost certainly come at the expense of profits, but the stories we were hearing really did risk leaving Sports Direct as a toxic brand.
“Customers, suppliers and staff all need to have a degree of confidence in a company.
“Perhaps yesterday was the start of a rebuilding process for Mike Ashley and Sports Direct.”
Mike Ashley’s rise and fall
By OLIVER HARVEY, Chief Feature Writer
MIKE Ashley left school with just one O-level but became one of Britain’s richest self-made men.
When he was 16 his parents took out a loan against their bungalow, gave him £10,000 to buy the lease of a sports store and he built an empire.
He is ranked the UK’s 22nd wealthiest person by The Sunday Times Rich List, with a £3.5billion fortune.
But this year £1.6billion was wiped off Sports Direct’s stock market value amid a slump in trade. Shares have dived 45 per cent in a year.
And many fans blame him for Newcastle’s relegation.
ome of his business pals have been honoured with gongs. But there is little chance of Mr Ashley getting an invite to the Palace soon.