For the workers who have been short-changed by Sports Direct, it is good news that the company has agreed to stump up £1m in back pay. Some will be £1,000 better off as a result.
Mike Ashley, the retailer’s billionaire founder, will no doubt be hoping that the agreement reached with the Unite trade union and HMRC draws a line under the affair. That is unlikely to be the case, and it certainly should not be.
For a start, the Department of Business, Energy and Industrial Strategy (BEIS) has to decide whether it is going to name, shame and fine Sports Direct for failing to ensure its warehouse employees were paid the minimum wage. There appears to be no reason for clemency. The government seems quite happy to name and shame little known companies for relatively modest sums, and this was no minor infraction. Sports Direct’s flouting of minimum wage legislation had been going on for four years.
BEIS has the power to fine the company £2m, double the amount it has agreed to pay its workers, and it should impose the maximum. In part, that’s because despite the £1m total the company could have been required to pay more. In part, it’s because the government needs to make an example of Sports Direct in order to show that it is unacceptable to dock pay for staff clocking in a minute late and force them to undergo unpaid 15-minute searches at the end of their shifts.
Sports Direct is a prime example of how companies can use employment agencies to avoid giving what are effectively full-time staff members the rights which they are legally due. Employees are too frightened to make a fuss for fear that they will not get any more work.
Ashley, it appears, is concerned enough about the reputational damage being caused to Sports Direct, and upset enough about being hauled up before MPs to explain himself, to make an offer of recompense. The government’s approach should be to say: “Thanks for that, but we are going to fine you heavily anyway.”
