Sports Direct staff share £1m as firm is shamed over pay

SHARES in Sports Direct fell nearly 4pc after the retail giant was forced to hand £1m to staff because it broke the law by not paying the national minimum wage, writes Rupert Steiner.

The firm faces the added humiliation of being named and shamed by the Department of Business, Energy and Industrial Strategy and a fine of up to £2m – or double the amount it shortchanged workers.

It is the latest blow for billionaire founder Mike Ashley, pictured with his wife Linda, after a damning investigation by MPs accused him of turning a blind eye’ to ‘appalling’ working practices.

Unions have said working conditions are like ‘the Gulag’ and described them as ‘Victorian’, and said staff operate in ‘a workhouse not a warehouse’.

Ashley is under increasing pressure to improve conditions at the main Sports Direct warehouse in Shirebrook, Derbyshire, and investors may also seek to force change at the top.

Some may use next month’s annual meeting to vote down chairman Keith Hellawell and other directors in a bid to speed up better corporate governance by fresh faces. The shares fell 11.5p to 297.3p after an investigation by Her Majesty’s Revenue and Customs resulted in thousands of workers sharing £1m for non-payment of the minimum wage.

The payments, back dated to May 2012, cover time spent on unpaid searches at the end of shifts which dragged the pay for the amount of time worked below the national minimum wage.

Some staff could receive up to £1,000 each, according to Britain’s largest union, Unite.

Steve Turner, assistant general secretary of Unite, said: ‘Investors and customers alike should not be fooled into thinking that everything is now rosy at Sports Direct’s Shirebrook warehouse.’ Some of the workers are expected to start receiving the back pay in full towards the end of August.

A spokesman for Sports Direct did not return calls.

Labour MP Iain Wright, chairman of the Business, Innovation and Skills Committee, said: ‘Mike Ashley will be updating us in the autumn on the steps he has taken to address the appalling practices that have been identified and we will be checking that he is as good as his word.’