Paying less than the National Minimum Wage
Today, Sports Direct founder Mike Ashley admitted to MPs that his business is paying less than the National Minimum Wage (NMW) to some of its workers, and has agreed to back pay the underpayments.
Previous criticism of the company abusing its zero hour contracted employees was also addressed at the government's business, innovation and skills select committee. On being asked whether Mr Ashley would consider taking on more permanent staff, rather than using zero hours contracts he replied, “why not, permanent staff can deliver a better service for the company after all. We have moved hundreds of staff from zero hours contracts onto permanent roles”.
The Sports Direct branding took a further hit with reports from the Unite union that the company has created a workplace culture of fear, where employees are afraid of losing their jobs. There was one case where an employee gave birth in the toilet as she was scared of losing her job if she called in sick.
Sports Direct are trading 15% down which has resulted in around £600m disappearing from the value of the company; which has provoked dissent from investors.
What is evident is that the issues raised here are not relating to the size of an organisation, whether you are trading as a large international corporate business or a small medium enterprise, you need to be clear on your employer obligations relating to zero hour workers and those under the National Minimum Wage Act 1998.
Are you confident you are driving the correct workplace culture to maximise your employer brand and ultimately profitability?
Contact us on 01455 852128 for support in helping you drive the right workplace culture for your business whilst remaining compliant.
