Sports Direct founder Mike Ashley admits paying workers below the minimum wage

Ashley told MPs that workers were fined 15 minutes pay if they were one minute late

(Reuters)

Mike Ashley has admitted paying Sports Direct employees below the minimum wage at a hearing in front of MPs.

The company founder said that workers were paid less than the statutory minimum because of bottlenecks at security in an admission that could result in sanctions from HMRC.

Ashley told Iain Wright MP, who chairs the Business, Innovation and Skills Select Committee, that workers were paid below the minimum wage for a "specific time".

He said that security processes had since been improved to that "literally hundreds of people" can walk through the security line each minute.

But he said he could not address every issue, adding: "I'm not Father Christmas. I'm not saying I'll make the world wonderful."

Staff have said that they are subject to security checks lasting up to 15 minutes during which time they are not paid.

Earlier in the hearing Steven Turner, the assistant general secretary of the union Unite, was asked if Sports Direct had changed its working practices in light of media coverage and union pressure.

He said that conditions had not improved, but that the 20p rise in the minimum wage had offset some of the pay lost during such checks.

Unite also revealed that Sports Direct has agreed with HM Revenue and Customs to compensate warehouse workers for paying less than the national minimum wage.

In December, Ashley said that Sports Direct was in compliance with minimum wage regulations and that it takes its responsibilities very seriously.

Ashley said that he had also changed a policy whereby workers were fined 15 minutes pay if they were one minute late.

"I honestly don't know how that policy started," he admitted. "If my kids were subject to that rule I would say it was unfair."

He denied that workers were criticised over the public address system but admitted that workers were not paid overtime if they stayed late.

Unite told MPs that Sports Direct "punishes" employees for challenging their employer, taking too long in the toilet or taking time off with a strike system.

When the worker has six strikes, their work is terminated.

"You have to have some kind of system," Mike Ashley said. "Call it 26 strikes – as long as they are used correctly."

Sports Direct shares rose more than 5.5 per cent in the aftermath of the hearing to trade at 384.60, their biggest gain since March, in a sign that investors approved of Ashley's performance before MPs.