Billionaire Mike Ashley has been revealed as the biggest employer to use the soon-to-be illegal “zero hour” contracts that potentially stop the 20,000 part-time staff at his retail empire getting a second job.
The policy was described as unfair and exploitative by MPs and campaigners and means 90 per cent of workers at his Sports Direct stores have no guaranteed working hours and must seek permission from management to work elsewhere.
The revelation comes a year after senior management at Sports Direct took share option bonuses worth three times their pay. Ashley has a personal fortune of an estimated £3.75 billion, according to the Sunday Times Rich List.
The Government is seeking to ban such working conditions. Ministers estimate some 125,000 workers will benefit, meaning Sports Direct staff account for almost one in six of the entire workforce the Government wants to help.
A copy of a 2012 contract seen by The Independent says: “If you wish to undertake any work outside the company, whether paid or unpaid, you should raise the matter with your manager ... it may be decided that the additional work would conflict with your duties at Sports Direct.com Retail Limited. You would then be prevented from taking it up.”
It is understood this clause remains in current contracts and does not give minimum guaranteed working hours.
Campaigners have described the wording as an “exclusivity” clause although it is not known whether Sports Direct enforce the rule.
Belinda Turffrey at campaign group 38 Degrees said: “This looks like exclusivity in all but name. Many people on zero hours contracts will be worried about the consequences of asking for permission to work somewhere else, while others run the risk of being turned down entirely.”
Zero hours contracts have been widely criticised because the lack of guaranteed hours leave workers struggling to get mortgages, credit cards or rental agreements.
Sports Direct will be forced to defend its record at an employment tribunal bought by an ex-worker later this year.
Labour MP Alison McGovern, who has written a report on zero hours contracts, also criticised the wording and called on Ashley to remove the clause.
She added: “This seems like “exclusivity” in all but name to me. It is clearly exploitative and really unfair, and seems clear they will stop employees working for others if they want to.
“It also seems extraordinary that they are also prepared to bar people from unpaid work – presumably work experience for career development – which seems totally unfair too.”
Stephen Levinson, Consultant Solicitor at Keystone Law who specialises in employment law, added: “The clause is clever but may be too clever by half. It avoids a prohibition on working for another or from doing so without consent which is what the [Government] bill bans.
“However the need to seek permission could be construed as an effective prohibition if permission is never or hardly ever granted. It would then look like the abuse the law is designed to prevent.”
Zero hours contracts are also reportedly used by other companies including McDonalds, Cineworld and Burger King franchisees but Sports Direct is the first to face court action over their use, with an ex employee taking the company to an employment tribunal later this year.
A spokesman for the Department of Business, Innovation and Skills said zero hours contracts can benefit some workers because of the flexibility.
But she added: “Unfortunately, it has become clear that some employers abuse this flexibility. It cannot be fair to prevent someone from working for another employer, even though their employer is offering no work.”
Sports Direct declined to comment.