JD Sports has been suspended from recruiting staff from job centres until damming allegations of poor working practices at the retailer’s Kingsway site are resolved.
The retailer launched an investigation into its warehouse conditions following footage broadcast on Channel 4 News that showed workers complaining that its Rochdale site was “worse than prison”.
The Department for Work and Pensions (DWP) confirmed it has suspended the company from recruiting for the Kingsway plant in Job Centres until they are “satisfied that workers are being treated appropriately”.
In a statement sent to The Independent, a DWP spokesman said: "We’re taking these allegations seriously and have put recruitment activity with JD Sports in Rochdale on hold while we investigate further.
"We take into account all of the facts before applying a sanction, which includes any information provided by claimants as well as the laws around minimum working conditions."
JD Sports has denied the claims, saying it was "deeply disappointed and concerned" by the footage.
Announcing the investigation on Thursday, the company said: "Whilst we do not believe it to be an accurate reflection of our culture, the vast majority of our people or our standards of practice and procedures, we will be launching an investigation into the implementation of our policies at our Kingsway facility."
A five-week undercover investigation by Channel 4, broadcast on Wednesday night, claims the sportswear giant operated a “three strikes and you’re sacked” policy where sanctions could be given for carrying chewing gum or chocolate.
One member of staff said workers could be “fired on the spot”, which the company "categorically" denied on Thursday, as well as rejecting the notion that it operates a strike policy.
Another worker said: “It’s worse than a prison. Prisons get more frigging respect.”
Criticism of the retailer’s poor working practices echoes that of rival Sports Direct, whose chairman, Keith Hellawell, hit out last week at MPs, the media and unions for undertaking a “damaging” campaign.
Sports Direct admitted to “potentially oppressive” working practices and pledged to use fewer zero hours contracts after coming under fire from MPs.
Its share price has fallen nearly 50 per cent so far this year.
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