Billionaire Sports Direct owner Mike Ashley was slammed again yesterday for tight-fisted practices after promising just 15p more an hour for his army of zero-hours workers following criticism of their treatment.
Mr Ashley, who is battling to keep shareholders onside after a slump in Sports Direct’s performance, will spend £10m extra next year hiking wages following pressure from unions and MPs. The rise, which takes effect today, takes pay from the minimum £5.30 an hour to £5.45 for people under 21. Wages for workers over 21 will rise to £6.85 an hour from £6.70.
The Government will introduce a living wage of £7.20 for people over 25 in April. Sports Direct staff in this age bracket will subsequently be paid £7.35 an hour. “The costs in relation to these direct employees and casual workers, and other related costs, are likely to be circa £10m on an annualised basis,” Sports Direct said.
The FTSE 100 business has around 20,000 staff in the UK, with 15,000 on zero- hours contract and the rest comprising agency staff. The wage bill last year was £290m.
The media-shy Mr Ashley, who is also chairman of Newcastle United FC, gave a rare interview to the Daily Mirror yesterday laying out his plan. “I want to see Sports Direct become the best high-street retail employer after John Lewis. I realise this is ambitious and it won’t be easy, but I believe as a FTSE 100 or even 250 company we have a responsibility to set a high moral standard,” he said.
Mr Ashley, who is worth around £3.5bn, has been summoned to appear in front of MPs to answer questions about working conditions at the sports retailer.
Unions dismissed the announcement as a “PR stunt”. Unite’s regional officer, Luke Primarolo, said: “This pitiful promise by Sports Direct to pay just over the minimum wage should not distract from the Victorian work practices. If Mike Ashley is to fulfil his promise of making Sports Direct a model employer then he needs to commit to becoming a living wage employer and stamp out abusive work practices by putting all staff on permanent contracts.”
Sports Direct has come under pressure after a series of investigations revealed questionable working conditions and practices at its main Shirebrook depot in Mansfield.
A Guardian probe last month found the company was in effect paying below the national minimum wage after forcing staff to undergo unpaid compulsory checks before they left the warehouse.
Organisations such as the Institute of Directors rounded on Sports Direct, labelling it a “scar” on UK business, while MPs of all stripes also attacked it. A BBC investigation earlier this year found that ambulances had been called to the site 76 times in the past two years amid accusations staff were too scared to take sick days in case they lost their jobs.
The company has responded by setting up a review of all agency worker terms and conditions. Overseen personally by Mr Ashley, it is due to start this month.
Sports Direct’s shares slumped by 11 per cent early last month after it missed profit expectations.