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“Victorian workhouse conditions” for staff in 2016

The Department for Business, Innovation and Skills has recently published a disturbing report into the employment practices at Sports Direct in which the company was described as a “Victorian workhouse”.

The parliamentary report into Sports Direct came after a number of media investigations placed a spotlight on working practices at the company’s warehouse some of which are outlined below.

National Minimum Wage

The National Minimum Wage Act 1998 applies to most workers working in the United Kingdom who are over compulsory school age. Some of the current rates are:

Aged 16 to 17: £3.87 per hour

Aged 18 to 20: £5.30 per hour

Aged 21 to 24: £6.70 per hour

Aged 25 and over: £7:20 (this is the National Living Wage (“NLW”)).

However, wages for Sports Direct workers fell short of the national minimum. The report describes how workers were required to wait in lengthy queues at the end of their shifts in order to be searched for stolen goods before leaving the premises. This waiting time was unpaid and is estimated to have led to a 20p per hour shortfall in the NMW which HMRC are now investigating.

Although workers at the company were not paid for the time they spent waiting to be searched at the end of their shifts, their wages were apparently deducted by 15 minutes worth of pay for clocking in as little as 1 minute late.

Failure to pay the NMW or NLW can lead to unlawful deduction from wages or breach of contract claims from workers but also civil and criminal enforcement including notices to pay arrears of NMW and also hefty financial penalties.

The “6 strikes and you’re out” rule

An excessively harsh policy was enforced which saw agency workers being given ‘strikes’ for reasons such as “excessive chatting”, “reported absences” and “long toilet breaks”. If a worker received six strikes they were apparently automatically dismissed. As most of the workers were effectively on zero hours’ contracts they had no means of challenging allegations via a disciplinary process and these strikes were likely to go unchallenged in any event due to fear that the worker would not receive more hours in the future.

Absence from work, unless there is evidence to suggest that it is not genuine, would not usually warrant disciplinary action but this approach allowed arbitrary ‘strikes’ to be allocated regardless. Similarly, “excessive chatting” can usually be handled with an informal conversation and what was deemed to be a “long toilet break” was not defined…

Sexual harassment

Workers at Sports Direct have claimed that they were promised permanent contracts in exchange for sexual favours.

Employers should make clear to staff expected standards of behaviour and what would be considered as sexual harassment. Any complaint of such behaviour should be taken seriously, investigated and handled sensitively. Instances of sexual harassment can also overlap with sex discrimination. For example, if a female employee rejects a male manager’s advances and is later denied promotion, regardless of the fact that she meets the requirements, could be seen as sex discrimination. Employers should ensure all staff are aware of their obligations and discriminatory behaviour handled robustly.

Health and Safety

Evidence has pointed to serious health and safety breaches at Sports Direct. 110 ambulance calls to the warehouse were recorded in just over 3 years including one worker giving birth in the toilets allegedly for fear of repercussions if she took time off.

All employers have a common law duty to take reasonable care for the safety of employees. The Health and Safety at Work Act 1974 also imposes a statutory duty on employers to ensure, so far as reasonably practicable, the health and safety and welfare at work of their employees. There could be serious repercussions for failure to comply with these obligations including, as seen here, serious reputational damage.

Conclusion

Workers enjoy a range of statutory employment protection and employers owe a number of duties to workers. It is important to minimise risks of litigation and negative publicity to ensure that the organisation is compliant with any relevant legal obligations. Employers should have clear workplace policies in place and ideally provide appropriate training to ensure that workers are aware of the standards expected.

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