Sports Direct forced to pay £1million to workers after Unite campaign

Workers at Sports Direct will get a total of more than £1m in back pay after the chain admitted it had been paying less than the minimum wage to many staff.

Sports Direct (LON:SPD) will grant workers back pay of around £1 million following an admission by founder Mike Ashley that the company had not been paying the minimum wage, a trade union has said.

The distribution centre in Shirebrook has been under scrutiny over its “Victorian” working practices.

He admitted he admitted numerous “Victorian” working conditions at Sport Direct’s main warehouse, on the Nottinghamshire-Derbyshire border, were “unacceptable”.

Shares in Sports Direct were down more than 3%.

Both staff and agency workers would benefit, it said.

However the union said around 1,700 Transline Agency workers at the Shirebrook site may only receive half the back-pay they are owed because of the firm’s “refusal to honour its commitments” from when it took over from Blue Arrow in 2014.

Labour’s Jonathan Reynolds, a member of the Business, Innovation and Skills Committee, said he was “absolutely delighted” by the back pay deal secured following Mr Ashley’s appearance before MPs to answer questions about the regime at the Sports Direct warehouse.

The trade union Unite said 96 percent of its members directly employed by Sports Direct had backed the pay deal, which covers unpaid searches at the end of shifts.

The news comes after Sports Direct’s founder and majority owner Mike Ashley told lawmakers in June that the firm had effectively paid staff at its Shirebrook warehouse below the statutory minimum wage by requiring them to queue for security checks on their own time.

It has emerged that large shareholders in Sports Direct are considering voting against the reappointment of the company’s chairman – Keith Hellawell – and other directors at next month’s annual general meeting in a bid to force change at the top of the embattled chain.

The payments will be dished out to agency staff and those directly employed by Sports Direct, the Unite union said.

“Things that came out of the evidence to the select committee, and especially testimony from people who worked there, were very, very serious – people thought that kind of situation in the workplace was not a feature of modern Britain”. The Unite union in partnership with HMRC struck the payment settlement.

“It has now been reported the company is acting to put this right”.

But he added: “Mike Ashley and the Sports Direct board should be under no illusions”.