The report into working practices at Sports Direct has implications for the wider retail industry, industry observers and union officials have warned.
Sports Direct retail park
The committee said founder Mike Ashley must be held accountable for the “appalling” working conditions and practices in Sports Direct’s shops and at the Shirebrook warehouse, which are closer to that of a “Victorian workhouse” than that of a modern high street retailer.
Audrey Williams, employment law partner at law firm Fox Williams, said the repercussions for Sports Direct could be serious: “Given the fact it has been such a high profile case, it is unlikely things will be left there.
“It is likely the Health and Safety Executive will carry out an investigation and prosecute against unsafe or unfair working practices, if they see fit. These would be brought against senior executives at both Sports Direct and the employment agencies it uses.
“Individuals or unions may bring claims forward for breach of duty of care if they faced health issues or injuries as a result.”
She said the focus on employment practices will also have an impact on other UK retailers.
“The message to the wider industry will be around working practices, particularly if they use supplied labour. Companies need to be constantly checking their working practices, auditing supply chains and making sure everything is as it should be, as the impact on reputations can be huge. The situation is closely linked to the new provisions that retailers need to put in place under the Modern Slavery Act.
“It serves as a reminder that firms in the textile industry in particular need to not only check their overseas suppliers, but it’s also important to make sure that all their UK arrangements are lawful.”
Trade union Unite said this was “only the beginning” in the fight against the mistreatment of retail employees in the UK.
Assistant general secretary Steve Turner said: “This report is absolutely not the last word. Unite is pleased that we are now in the early stages of dialogue with Mr Ashley about how the serious problems at Shirebrook can be put right. It is simple – put the workers on fixed-hour, permanent contracts. Give them some security and the dignity they deserve.”
He added: “Shirebrook is not an isolated incident. The sad truth of the matter is that, where people can be hired and fired at whim, bad bosses are never far away. If the prime minister is serious about tackling corporate abuse, then she should start in our workplaces by restoring security, decency and fairness to working life. Rogue employers must fear the knock at the door.”
Verdict Retail analyst Nivindya Sharma said the report should serve as a warning, as well as an opportunity for other retailers to examine their own supply chains in the UK.
“Sports Direct has taken a big hit to its brand image, especially because all of this has happened in the UK, rather than in some factory on Bangladesh for example.
“Other retailers need to be checking their third party suppliers and resist cutting costs in this area. It’s time to start looking at working conditions in the UK and using Sports Direct as an example.
“There’s no way that Sports Direct is the only retailer in the UK employing some of these practices so other firms need to take heed and use this as an opportunity to improve their own businesses, as customers do care.”