Mike Ashley’s Sports Direct made one of the lowest contributions to its staff pensions of any FTSE 100 company last year, according to new research.
The retailer managed to avoid having to automatically enrol staff on to pensions following law changes because the vast majority of Sports Direct staff are on zero hours contracts.
Just £82 a year on average was paid to staff in pensions benefits, against a FTSE 100 average of £3,000, according to the trading firm Banc De Binary, which did the research.
The revelations will be embarrassing for Mr Ashley as it comes just weeks before he appears at a Scottish Affairs Select Committee hearing to answer questions over his use of the controversial contracts.
He will also have to explain allegations of mistreatment of staff made redundant at his fashion chain USC, which Sports Direct bought from itself in a pre-pack administration.
Overall, Sports Direct was the third worst pensions contributor in the top tier stock market, behind the security firm G4S (£78 per employee) and the mining business Antofagasta (£16 per employee).
However, researchers pointed out that G4S and Antofagasta employ large numbers of staff from developing nations where pensions rights are less commonplace.
Some 20,000, or 90 per cent, of Sports Direct’s staff are on zero hours contracts, under which workers’ shifts can change on a week-by-week basis, leaving many unsure how much money they will earn each month.
Staff who are full-time and have served with the company for several years are entitled to a share bonus if certain profit targets are hit, worth around three times their salaries.
At USC, Mr Ashley laid off around 90 staff from the company’s factory in Dundonald, Ayrshire, with just 15 minutes’ notice that the company was heading for administration, as Sports Direct staff shifted stock from the building to his Shirebrook headquarters. He then bought back the business, wiping out the company’s debts.
Ed Miliband, leader of the Labour Party, has been particularly scathing of Sports Direct’s employment practices, describing them as from the “Victorian era”.
At the other end of the pensions scale, Banc De Binary found that the private equity firm 3i paid the highest contributions, £14,440 per employee, followed by Aberdeen Asset Management (£11,630) and British Land (£10,791). The companies with the highest overall total pension costs were the banks Lloyds, RBS and Barclays, spending £804m, £656m and £688m respectively, according to the data.Reuse content