Business, Innovation and Skills Committee
Oral evidence: Working practices at Sports Direct, HC 219
Tuesday 7 June 2016
Ordered by the House of Commons to be published on 7 June 2016.
Members present: Mr Iain Wright (Chair); Paul Blomfield; Richard Fuller, Peter Kyle; Amanda Milling; Jonathan Reynolds; Amanda Solloway, Michelle Thomson, Kelly Tholhurst, Craig Tracey; Chris White
Questions 1 - 285
Witnesses: Steven Turner, Assistant General Secretary, Unite the Union, and Luke Primarolo, Regional Officer, Unite the Union, gave evidence.
Chair: Gentlemen, good morning. Welcome to our Select Committee. Sorry to have kept you waiting. I will ask you to introduce yourselves in a moment but for the purposes of the record, may I declare an interest and draw Members’ attention to my entry in the Register of Members’ Interests. I am not a member of Unite but I received a donation from Unite the Union in respect of general election expenditure.
Jonathan Reynolds: Chair, can I also declare myself as a longstanding member of Unite and participant in the Unite group of MPs.
Paul Blomfield: I am also a member of Unite and have received donations from Unite.
Q1 Chair: Gentlemen could you introduce yourselves for the purposes of the record?
Steve Turner: Yes, I am Steve Turner. I am Assistant General Secretary of Unite the Union.
Luke Primarolo: Good morning. I am Luke Primarolo. I am a regional officer with Unite the Union.
Q2 Chair: We are keen to get as much information out of you as possible. Could you tell us the role that you play in terms of negotiations on behalf of members in Sports Direct, in terms of Shirebrook—and that will be the main focus of our work—but also whether you have any role to play in terms of retail outlets?
Steve Turner: Yes, we have statutory recognition at Sports Direct for direct employees, only employed in the warehouse itself. This was secured in 2008, when there were around 500 direct employees. Since that time that number has dwindled to just under 200 direct employees, supplemented now by over 3,000 agency workers. We have no recognition with the agencies themselves, and there has been no collective bargaining taking place since 2008, despite the fact that we secured statutory recognition.
Q3 Chair: Do you have anything to add?
Luke Primarolo: We have members within retail but we have no statutory recognition within retail, and we have had no agreements with the company over pay for at least three or four years.
Q4 Chair: Mr Turner, I was going to ask in terms of access, in terms of management. I do not want to put words in your mouth, but you have said there is very little access, in terms of being able to have a good, positive relationship?
Steve Turner: There is no relationship with Sports Direct, other than recent discussion that we have had around the non-payment of national minimum wage with the company and with HMRC. There is only access in terms of statutory rights for grievance and disciplinary representation, where we have individual members that seek our assistance and we have access under the terms of statutory rights. There are no forum discussions with us, there had been no discussion about any suggested review, with Mike Ashley or anybody else inside the company, nor has there been any discussion with the company forum on any such matters.
Q5 Chair: I was going to come on to the review. That was announced by Mr Ashley six months ago. What role, if any, have you played? Have you actually seen the findings of the review?
Steve Turner: As far as we are concerned or aware, there is no review that has taken place. There has certainly been no discussion with us as the recognised trade union for workers inside the warehouse. There has been no discussion with our members, and there is a workplace forum in place, and there has been no discussion with the workplace forum. Indeed, there has only been one meeting of the workplace forum since it was constituted.
Q6 Chair: Did Mr Ashley attend that?
Steve Turner: I am not aware that he did, but I am not sure. I was not in attendance myself.
Q7 Michelle Thomson: When was it constituted?
Luke Primarolo: We would have to check that and get back to you.
Q8 Michelle Thomson: Was it after the review?
Steve Turner: No, the staff forum has been in place for a considerable period of time.
Q9 Michelle Thomson: So a year or—
Steve Turner: Longer than a year. Over a year, yes.
Q10 Chair: There is talk—and I just want to clarify for my own purposes—about back pay, about pay being back-dated. What is your knowledge of that? Have workers received back pay in respect of increases in their salaries or wages?
Steve Turner: No workers have yet received back pay. We have been in discussions with the company and Her Majesty’s Revenue & Customs. An agreement has been reached between us, HMRC and the company. We are currently in the process of balloting and consulting our members on the outcome of that arrangement. The company are doing likewise with their employees, but this only affects employees. As I have said, there are only 200 direct employees now inside the warehouse. There are over 3,000 agency employees who would equally be entitled to back payments for non-payment of national minimum wage. Those discussions are yet to take place. We have been seeking discussions with the two agencies concerned for a considerable period of time, and all of our efforts to meet have been thwarted.
Q11 Jonathan Reynolds: Steve, Luke, thank you for coming today. I am sure you both, through your roles, deal with a wide variety of industries and different workplaces. You have to cover all of that in terms of representing your members. Can you tell us, in your view, what is different about Sports Direct that has attracted such undue attention? Is there something in the business model that is different there? Is there something in how the workforce is structured that you perhaps find different to comparative businesses?
Steve Turner: Yes, this is about Sports Direct’s business model. I have to be clear that this is not simply about Sports Direct. This is a business model that we will find exported across not just retail and hospitality, the traditional areas where you find predominantly precarious work. This is now finding its way into transportation and logistics, supply chains and manufacturing industries. Wherever you find agency employment alongside zero-hours direct employment, you find the same sort of practices. One in five retail workers are employed on zero-hours contracts via Sports Direct stores—one in five on the high street. This is a business model that has exploitation at the very heart of it. That is our view towards zero-hours employment. Some 79% of all Sports Direct store employees are employed on zero-hours contracts. If you want a very good understanding of the business model that Sports Direct employ, I can only refer you back to the Scottish Affairs Committee inquiry that took place in 2015, where Keith Hellawell, the chairman of Sports Direct, gave evidence and was very clear about the nature of the employment relationship.
Luke Primarolo: The issue is that when you have a system where the majority of your workforce is employed under precarious contracts, be they zero-hours or be they agency contracts, what this leads to is a situation where people do not, in reality, have recourse to justice. What this means is it is very difficult for them to challenge if things are going wrong within the workplace or if they are being treated unfairly, because if you are on precarious work and you do that, you may find yourself losing your employment, or, if on zero-hours, not getting that next shift. Inevitably, when there is not that check and balance, when people are not able to challenge if things are wrong, there is a creep. There is a creep to a more and more extreme situation, which is what we are starting to discover here. However, it will not be the end of it unless we can find those checks and balances to put in place.
Q12 Jonathan Reynolds: To turn specifically to the Shirebrook warehouse, we have received a lot of testimony from people that is of concern. That has obviously been in the press as well, and people know about that. We are going to hear both sides of the story, both from the business and the agencies themselves today about that. There are a number of statistics that we have seen, which are from Freedom of Information requests and are not in doubt. They are things like the number of ambulances—76 ambulances called to the warehouse between January 2013 and December 2014. Can you tell us a little bit about that—about the information that the union discovered and whether you think that is typical or atypical of a warehouse of this kind?
Steve Turner: This is not typical of a warehouse. Although it will become typical of a warehouse if we do not actually do something about the employment practices that are being deployed by Sports Direct. In reality, even though we have 3,000 agency workers that are not employed on zero-hours contracts directly inside this warehouse, they are employed on short‑hour contracts. They are employed on a contract for 336 hours a year, which means that by the time you hit the end of February in any year you are now employed on what is effectively a zero-hours contract, without any guaranteed hours whatsoever. We would say that the agency workers employed at Sports Direct are pretty much equally employed on a zero‑hours contract. All of the issues that have been raised just then by Luke in terms of the control that the employer has, not just over the hours that you work and indeed whether you work, but the amount of wages that are then compensated to you as a consequence of that—the knock‑on impact of that on your ability to plan, to pay rent, to put food in front of your children, to make the normal arrangements that anybody that wants to play a normal role within society would want to do so are denied them, because they have no guarantee of whether they are working next week and next month or indeed how many hours they may be working at any one time.
It is the short-hour contract that is as prevalent, in terms of Sports Direct and across the wider economy as well, as the zero-hours contract itself. That is something I think we need to address. There are a number of issues in the contracts, and I would refer you in the appendix, whether you want to go now or certainly later to appendix A; there are copies in appendix A of the contracts themselves, which are very explicit in the way in which we believe they exploit, first, in terms of the 336-hour contract and the guarantee for only 336 hours per year. We have workers here that give direct testimony to us of being employed for over four years and up to nearly six years inside Sports Direct, and working for these agencies on so-called temporary contracts. We are not fruit-picking in the world of Kent here. The reality is this is a warehouse that is open for 52 weeks of a year, 24-hour operation and supplying stores that open seven days a week. There is no legitimacy for the employment of workers in a precarious way on zero-hours or indeed short-hour contracts, inside the warehouse or across Sports Directs’ wider operation.
Footfall is well known. The peak periods and the core periods of footfall are known to the business. You can roster and you can make arrangements to provide dignity and respect for a workforce here—a very hard-working, dedicated workforce that provide millions of pound of profit back to Sports Direct and individually to Mike Ashley as the chief shareholder employed here, and should be recognised. Dignity and respect and justice are huge issues here, and that is being denied to thousands of workers inside this warehouse and across the store’s operations.
However, it is not just about insecurity. It is also about no guarantee on hours, giving absolute control to the employer: “We do not have grievance and disciplinary procedures anymore. We simply do not have any further work for you. No further work.” There is no process; there is no access to justice. Even though on paper you may be regarded as an employee and able to access, if indeed you can afford it, the employment tribunal system, the reality is, for most zero-hours workers and short-hour workers, you are simply denied work if you raise a grievance or raise a concern with your employer.
There are also tax issues around this. We have done a lot of work around the employer’s national insurance contribution—keeping people low paid, keeping people on very low numbers of hours so that the employer can avoid paying 13.8% employer’s national insurance. There is then a knock-on impact of that on the employee themselves, who is in and out of work and then reliant on contributory-based benefits. Because they are failing to pay national insurance contributions on a regular basis they get problems every time they are in and out of the welfare system, and therefore find it very difficult to have sustainable income during the course of a year to support either themselves or their families.
Q13 Jonathan Reynolds: Some of the allegations that have appeared in the public domain about Sports Direct are of a more serious nature indeed. They are not just issues around fair payment and access to back pay but include things like the coercion of female employees into sexual relationships and that sort of thing. Since those were first aired—the Chair touched on this in terms of the review of the relationship with agency workers, but has any attempt been made to rectify problems, either through the union or not with the union. Has any attempt been made to look into and address concerns that have reached the public domain?
Steve Turner: We have certainly done that as a union, and we have put it in the public domain.
Q14 Jonathan Reynolds: But in terms of the business.
Steve Turner: In terms of the business, not that we are aware of at all. There has certainly been no discussion. We have written to the company and the agencies concerned, because of course, while we would deny Mike Ashley and Sports Direct the ability to outsource their responsibility to agencies for the employment of workers inside their operation—this is directly the responsibility of Sports Direct—it is the agencies that are the employer. We have written to the agencies on a number of occasions and not even had the courtesy of a reply from one of them, and a curt reply from the second. There has been no willingness on the part of the agencies to engage with us in any constructive way—in any way at all, actually—to try to resolve the genuine concerns and difficulties that have been raised with us, and that continue to be raised with us day in, day out, week in, week out.
Q15 Chair: Can we have a “yes” or “no” answer to this, if you could, Mr Turner? These allegations have been live for a number of months, if not years. Certainly in December there were allegations in the Guardian and on the BBC. Since that six-month period, have you seen any improvement whatsoever in working conditions in Shirebrook.
Steve Turner: No. There have been changes to the way in which people are searched and clock out. There has been a different system employed inside the warehouse, there has been better access and egress introduced, which makes that process quicker. It has not changed the process.
Q16 Chair: Is that better? Is than an improvement?
Steve Turner: That is an improvement, but it has not changed the issues that arise from searches on the way out of the premises.
Q17 Chris White: Do people still not get paid for those searches?
Steve Turner: No, they do not get paid for the searches. That is not working time but the 20p increase to the minimum wage that was introduced as a consequence of non-payment of national minimum wage—that is the reality of it—covers that and prevents a further claim.
Q18 Amanda Milling: Are you familiar with the prepayment card that is used?
Steve Turner: Yes.
Q19 Amanda Milling: How commonplace is this, in terms of using a pre-payment card for payroll?
Steve Turner: We have not come across it y. We are union of 1.4 million members that operate across pretty much all sectors of the economy, and we have not come across the level of exploitation in the use of pre-paid debit cards. We have workers here, predominantly from eastern Europe and recruited in Eastern Europe. English is their second if not third language. They are brought across to the UK and then, because they have no bank account, they are offered the facility of a pre-paid debit card. They are charged £10 for the issuing of the pre-paid debit card and then they are charged a monthly management fee of £10 for the pleasure of having their wages placed on the debit card. They are then charged, of course, 75p every time they use it in an ATM and then charged 10p every time they receive a text message confirming that they have withdrawn money or used their card. We know the card issuer, and the card issuer makes a £2 a month management charge, not a £10 charge. Who is making £8 out of this process? We do not know. Equally the card issuer makes no charge for the issuing of the cards, and yet the workers themselves are charged £10 for the issuing of a card, so they may be questions that you might want to ask others.
Q20 Amanda Milling: What are your views about the use of prepayment cards for payroll purposes?
Steve Turner: We would oppose it. People used to get paid in cash; now they are paid directly into bank accounts. Of course it is very difficult for migrant labour to have easy access to a bank account. You need to have proof of address. Very often they are living in shared accommodation. The electricity bill is not in their name. The house is not in their name. They cannot provide the evidence that may be required now, under statute—for very good reason by the way—to open a bank account. Where they cannot, they have to find another mechanism for being paid, but there are other ways in which you could do this that are not as exploitative. These are minimum wage workers and yet they find themselves receiving a bill for £10, simply for the pleasure of being paid.
Q21 Chair: Mr Turner, can I ask about that? Given that they are on minimum wage—and there may have been a 15p per hour increase and we will come on to that—but with the £10 monthly charge and 75p transaction fee, does that push them under the minimum wage? Have you got any evidence to suggest that that happens?
Steve Turner: It would do, but this is a moral question, perhaps, rather than a legal one. The reality is they are asked to sign a piece of paper that reaches an agreement with the employer to issue the card. Therefore this becomes a service agreement and not a deduction from wages. We believe that this is a deduction from wages. If you cannot be paid your wages monthly without a charge being imposed on you, for whatever reason, then that should be a deduction from earnings.
Q22 Amanda Milling: A final question on insurance: can you tell me about the insurance fees that they also have to pay?
Steve Turner: I wish I could tell you about the insurance. We have tried on a number of occasions to get answers as to why it is that insurance services deductions are made from people’s wages. I would refer you to wage slips that we have incorporated into our body of evidence for you, where insurance services are deducted up to £2.45 per week. These are employees of an agency, so I am not quite sure what they are insuring themselves against. The workers themselves, if you read the personal testimonies that are equally provided inside the documents we provided, are very clear about that as well, where they have asked and are unclear about why they are having monies deducted for insurance services. This is perhaps a question for the agencies themselves.
Q23 Amanda Milling: Again, is this something that you see to be commonplace? Do you see this elsewhere?
Steve Turner: We have never seen this.
Q24 Amanda Milling: You are telling me you have not seen the use of prepayment cards or insurances.
Steve Turner: We see it in these agencies elsewhere. These agencies employ workers across different sectors of the economy where we have members as well, and we see these same practices. This is an agency, in respect of one of them, Transline, which had their license revoked by the Gangmasters Licensing Authority when they operated in the food industry. Of course the Gangmasters Licensing Authority is restricted in its scope. It is one of our recommendations in our briefing that the scope of the Gangmasters Licensing Authority for licensing and regulation and enforcement be extended across all sectors of the economy. This is a company denied a licence in one sector of the economy and then free at will to operate in exactly the same way for which it was denied a licence in food elsewhere across the retail sector.
Q25 Michelle Thomson: We have been touching on this in this session: I would like you just to describe the culture of Sports Direct.
Luke Primarolo: In the warehouse there is a culture of fear. People are scared. People are scared because they are working under a system in which they know they could lose their employment at any moment. They are working under the strike system; it is one of the appendices that we have given you. This is a system that means those who work through the agency actually do not have any recourse to a disciplinary. They do not have any recourse to defend themselves if they are accused of something they have done wrong. They are given a strike. Strikes can be arbitrary, and there is no come back; there is no arguing about it. You can have a strike for spending too long in the toilet. You can have a strike for excessive chatting. You can have a strike for taking a day off sick or having to stay home because your children are sick. The problem with that is when you have people under that much fear, they come into work ill. When you get presenteeism in the workplace that creates a significant health and safety risk, because these people are now not only a risk to themselves but they are a risk to those they are working with. When we refer back to the Freedom of Information Act with East Midlands Ambulance Service, you will see in there not just that it is 110 callouts for the ambulance service, but you will see 34 for chest pains; you will see there are strokes in there; you will see that there are five births or miscarriages or pregnancy-related issues in there, one of which was someone giving in birth within a toilet, and the last one happened in November 2015.
Q26 Chair: You are not seriously suggesting that you are given a strike if you are giving birth.
Steve Turner: You are given a strike if you do not attend work, so people attend work when they should not be at work. That is the reality of this. You will see the criteria in appendix D: excessive chatting, excessive or long toilet breaks, wearing branded goods, or a period of reported sickness. A period of reported sickness warrants a strike. Six strikes and it is very clear: “Any person who exceeds six strikes within a rolling six-month period will have their assignment at Sports Direct ended.” So people come to work. Pregnant women come to work and end up being taken to hospital by ambulance, or giving birth in a toilet in a warehouse, on one occasion in 2014.
Q27 Michelle Thomson: Going back to culture, how does the culture compare with the warehouse, as compared to the retail outlets where there are more employees? Is there a difference, or do you see the same predominance of culture?
Luke Primarolo: There is still a culture within the retail arm where people are scared, and there is a culture, we believe, of bullying as well. We certainly have had some information on that. The different control mechanism there is because you are dealing with people on zero-hours. People are being pressured to come into work when perhaps they do not want to because they do not think they are going to get another shift. There are still the issues that we obviously raised earlier, of that fear of challenging if something is wrong, being scared, “Where are my next hours coming from? How am I going to pay my rent? How am I going to put food on the table?”
Q28 Michelle Thomson: We talked about the staff forum earlier, but are you aware of any mechanisms that might measure or help change the culture, in terms of staff feedback—360, you mentioned the staff forum? Are there any mechanisms you are aware of?
Steve Turner: No. The staff forum is only for Sports Direct employees—that is the reality of it—of whom there are very few in the warehouse. The overwhelming majority of employees in the warehouse are employed by two agencies, and they are not involved in any discussions with Sports Direct.
Q29 Chair: Would you point the finger at anybody in particular, or a group of individuals, who set the culture of the company?
Steve Turner: Clearly that comes from the top. This is an arrogance and a contempt, actually, at the very highest level of this business. It is the manner in which they believe that they can operate. We have it describe to us as a gulag, as Victorian, as a workhouse, not a warehouse. We believe that there is no place for these kinds of 19th century working practices in 21st century Britain. It has actually built an alliance with the Institute of Directors, ourselves, and many others against the deployment of zero-hours contracts.
Q30 Michelle Thomson: Is that culture from the top also set on behalf of the agencies?
Steve Turner: I do not think you can outsource responsibility. You cannot hand over more than £50 million a year to two agencies and think, “That is it. I have no responsibility for the practices that are deployed then inside my warehouse.” The wages and terms and conditions are exactly the same across the two. The terms and conditions are exactly the same. The strike system is exactly the same. This has been predetermined by Sports Direct. This is not something that two agencies, under their own violation, have introduced.
Q31 Chris White: Very quickly, Mr Primarolo, you have talked about the health and safety record. To me, that sounds shocking; it sounds very high. How does this compare with other businesses? Is it on a level on its own?
Luke Primarolo: It is on a level on its own. If the Committee wants us to submit them, we would be happy to put in some comparisons with similar types of businesses where we have recognition and good union set ups there so you could see the difference.
Chris White: That would be very helpful.
Luke Primarolo: There is a significant difference.
Q32 Craig Tracey: Some of the evidence that we have heard has been around poor training, limited inductions, and, from the management structure, a lack of knowledge of employee rights. I just wonder what your experience was of that.
Steve Turner: There is a contempt for employee rights. I do not think it is a lack of understanding, and I do not think it is an issue that they necessarily think is relevant. When you employ people on the sorts of contracts that they are employed on you find yourself viewing the human being as a disposable asset. There is a price to pay. All these cost reductions, cheapest products, constant sales—sales, sales, sales, 90% off—has a price. The price is paid, whether that is in the manufacturing of these goods, somewhere else in the world, or the transportation of these goods across the globe, or indeed in a warehouse or retail operation. Workers are paying the price of us getting cheap goods. That is not opposition to people being able to use Sports Direct as an avenue to purchase goods that they want to purchase at a reduced price. This is just the natural consequence of this constant drive‑down in cost.
Q33 Craig Tracey: Have you looked at the actual management structure and training structure internally and reviewed that, or have you seen the evidence of the processes?
Steve Turner: We would like to. We have offered our expertise across many sectors of the economy, dealing with many hundreds if not thousands of employers, to improve working conditions, productivity and relationships inside the workplace. We have had no responses back that are constructive from either the agencies or from Sports Direct. That offer remains on the table. We are a trade union that wants to do good business with good employers. There are serious issues here that have been raised with us consistently. We tried to resolve those in a constructive, positive way with the employers, but this is a two‑way street and unfortunately we are batting one direction at the moment.
Q34 Peter Kyle: Just very quickly, you will have come across a lot of employers that have made mistakes and acted upon them, and been a part of solving the problems. What we are hearing here is a culture that is corrupted through to its core in the workplace. The question is: is it wilfully corrupted or did this culture happen unbeknownst to managers? Are some managers just trained so poorly that they do not know what is happening on their watch? Do you believe that wilful behaviour has led to the outcomes in the workplace that you are describing?
Steve Turner: I cannot believe that people walk round a warehouse operation with their eyes closed. I cannot believe that that is the case, and I do not believe that that is the case. This is a determined business model and that business model is rolled out from the highest levels within Sports Direct as an operation.
Q35 Peter Kyle: So an instruction would have come down from the top—
Steve Turner: This is their business model.
Peter Kyle: To screw down costs to the point where it will impact on someone’s health and wellbeing.
Steve Turner: Absolutely, and there is no need for this. There is no reason whatsoever as to why employees could not be employed directly inside the warehouse. In fact it would cost less. You might actually be able to pay people beyond the 20p above minimum wage if you took out the cost of the agencies. There is no reason to employ people on zero-hours contracts inside the stores or on 336-hour contracts inside the warehouse. This is a 52-week-a-year operation?
Q36 Peter Kyle: Have you ever seen anything that comes close to this in your experience, on this scale?
Steve Turner: Not on this scale, no. There is a fear of course, which we are seeing. We see some of these agencies employing workers elsewhere across the economy. We have direct relationships with the workforce themselves, who tell us that exactly the same issues are raised in those circumstances with those employers in exactly the same way as they have been employed at Sports Direct. This is a creeping model.
Q37 Richard Fuller: Just building on that, why do you think an owner would run a company like this? You have prepared, and we have heard, a catalogue of very disturbing activities and practices going on that are accepted. Why do you think an owner would permit that to continue?
Steve Turner: I cannot answer that. Mike Ashley can answer that as the owner, effectively, of Sports Direct. I know you are taking evidence from him a little later this morning. The reality is that I cannot see why that would be the case. This goes to the heart of corporate and social responsibility. This is why the Institute of Directors have come out in support of the campaign that we have been running to bring dignity and respect into the workplace, not just at Sports Direct but elsewhere, dealing with all of these sorts of employment practices that are becoming rife across our economy right now. This is a race to the bottom, which, if we do not step in and interject and stop, will become the predominant employment model. There are consequences across our economy, and for our economy, of running a business operation like this.
Q38 Michelle Thomson: Just a question for you, Luke, when you mentioned about the ambulance visits, do you have evidence of specific health and safety breaches against legislation?
Luke Primarolo: What we have you have within your pack. We have given you photographic evidence as well. We certainly get a lot of workers telling us stories of things that have happened in there and happened to them, so we have got a lot of anecdotal evidence, which again we would be happy to supply to you if that is something you require as well.
More concerning on the whole health and safety angle is the idea of presenteeism and what happens. You mix that with targets—you have a heavy mix with targets, because these people are given targets—and we are talking about a massive warehouse that they have to get round to pick up different items. You have to pick them up because none of it is automated; it is all done by hand, so you have got lots of targets to pick up the different items to load into trolleys. You will see that there is photographic evidence that those trolleys are in poor repair and they are pushing them around. What does that lead to? What is the consequence of all of those things mixed together? The consequence is the ambulance reports.
Q39 Michelle Thomson: Have you offered that evidence that you have to Sports Direct? Have you offered to give that to them?
Steve Turner: Absolutely. We have offered to meet with Sports Direct. We have offered to meet with the agencies to discuss all the issues that have been raised with us over a considerable period of time. We have received no positive feedback from Sports Direct or the agencies in terms of meeting.
Q40 Michelle Thomson: Have they declined the evidence of those breaches?
Steve Turner: They have not responded positively to a meeting with us, at all, on any of the issues that we have raised with them. The only thing that I would add to this is that there is a statutory reporting process involved here as well—RIDDOR, the reporting of injuries, diseases and dangerous occurrences. There are 80 RIDDOR statutory reported incidents that require people to be off work for over seven days, and they have been reported to the local authority. Where there are issues here is the crossover between the Health and Safety Executive and the local authority reporting mechanisms, and enforcement and visitation. You get very few inspections, and this is more about cuts to local services and the way in which the environmental health services are responsible for warehouses, as opposed to the Health and Safety Executive, so something that we may want to look at would be a closer liaison between the Health and Safety Executive and its resources and the environmental health officers in warehouse operations. Because 80 incidents, over a defined period of time, some of which are very serious and cause people to be off for long periods of time, should be raising concern.
Q41 Chair: Gentlemen, a very final question, and if you could be brief I would be grateful: is the key problem a question of enforcement of existing legislation, or that legislation as it currently stands does not address employment protection?
Steve Turner: Legislation as we see it does not address it. We have given a number of recommendations in our packs, so I will not refer to them now because of the time, but they are on the last page of our briefing, page 11. In New Zealand they have outlawed zero-hours contracts and all those employers—your Kentucky Fried Chickens, your Burger Kings, your McDonalds, your Starbucks; all of those that require flexibility in their workforce and therefore the issuing of zero-hours contracts—now employ all of their people on rosters, on guaranteed hours without any hiccups or problems. That has happened in New Zealand and we should look at doing that here. We should certainly look at extending the role of the Gangmasters Licensing Authority, its scope and its remit, beyond simply food and agriculture, because you have agencies now operating across the economy, banned in one area and yet able to operate freely elsewhere in exactly the same manner. There are a number of other recommendations that I will leave with you, Chair, in that regard as well.
Chair: Gentlemen, thank you very much for your time, we are very grateful for what you provided and the evidence that you have given to the Committee. Thank you.
Examination of Witnesses
Witnesses: Chris Birkby, Managing Director, Transline Group, Jennifer Hardy, Finance Director, Transline Group, Andy Sweeney, CEO, The Best Connection Group Ltd, gave evidence.
Q42 Chair: Good morning, could I ask you to introduce yourselves and tell us the organisations that you represent?
Chris Birkby: I am Chris Birkby. I am the Managing Director of Transline Group.
Jennifer Hardy: Jennifer Hardy, Finance Director, Transline Group.
Andy Sweeney: Andrew Sweeney, Chief Executive of The Best Connection.
Q43 Chair: Could I ask each of you, what is the nature of your contract with Sports Direct?
Chris Birkby: We provide temporary labour to Sports Direct.
Chair: Temporary.
Chris Birkby: Yes.
Jennifer Hardy: Or flexible.
Chris Birkby: Yes, flexible, at Shirebrook and Wigan.
Q44 Chair: Is that true for you as well, Mr Sweeney?
Andy Sweeney: We provide temporary flexible labour to Sports Direct?
Q45 Chair: Do you mind me asking how much you are paid by Sports Direct?
Jennifer Hardy: I think that is a commercially sensitive question that would impact our business beyond the Sports Direct contract.
Q46 Chair: What proportion of your turnover is derived from the Sports Direct contract?
Jennifer Hardy: It is in excess of £20 million.
Chair: As a proportion of turnover?
Jennifer Hardy: The proportion would be 10%.
Q47 Chair: And what about you Mr Sweeney?
Andy Sweeney: Just under 10%.
Q48 Chair: Do you set the rates for the workers?
Jennifer Hardy: No.
Q49 Chair: Who sets that? Does Sports Direct say, “This is what we want to pay”?
Jennifer Hardy: Yes.
Q50 Chair: So what value do you add? Why does Sports Direct not simply employ people directly on similar contracts? Why spend money giving you services?
Chris Birkby: Large businesses will use an agency to ensure their workforce does remain flexible.
Q51 Chair: What do you mean by that?
Chris Birkby: If there is an influx in volumes or a change in business, using the agency allows them to increase or decrease their workforces accordingly.
Q52 Chair: To what degree are the workforces flexed? We have heard already that Shirebrook operates on a 24-hours-a-day, seven-days-a-week, 365-days-a-year model, and it does not flex that much. There may be additional stock at Christmas. There may be additional stock now as we go into the Euros. Other than that, activity is very well planned. Why do you need that flex, and to what extent is there flexibility?
Chris Birkby: You are right that their workforce is not a large flexing workforce. The average hours of our staff on site for quarter 4 last year were 39 hours, and in quarter 1 this year the average hours has been 32 hours. Why they choose to use that is up to them, but that is why we provide our service: to give that option to a customer.
Q53 Chair: Could you just give me a flavour as to the extent? Would they flex 20% in certain weeks? Would they flex down 30%? What would be the flow of work?
Chris Birkby: No, at Shirebrook, instead of doing that they will flex from a five-day working week to a four-day working week. Rather than losing staff or laying staff off, they will flex from five days to four days and backwards and forwards.
Jennifer Hardy: Which is actually a much better position compared to some other industry-standard mechanisms. You do tend to keep your workforce.
Chris Birkby: It helps you sustain your staff.
Q54 Chair: What is the turnover of staff at Shirebrook?
Chris Birkby: The average attrition weekly is between 1.5% and 2% of our workforce. Our workforce is currently 1,700. As a standard we would look up to 2% before it would be a cause for concern.
Q55 Chair: Mr Sweeney can I ask the same questions of you?
Andy Sweeney: The figures are similar for The Best Connection also.
Q56 Chair: You might not know the answer to this, but, in terms of Sports Direct, why do they employ two agencies rather than just one?
Chris Birkby: I think the risk. In terms of the volume, that site is one of the largest sites in the country that we work with, so you are talking about 4,000 heads. To have one agency managing that would be a big risk, so I think it is always safer to split that across the two.
Q57 Amanda Milling: Can you describe the types of contracts you use for your agency staff that go to Shirebrook?
Chris Birkby: Yes, we operate on the employer contract with a 336 contract.
Q58 Amanda Milling: Why?
Jennifer Hardy: It gives the flexibility that our client needs. It is a very standard contract within the industry. It is not something that is restricted to the Shirebrook site. It is not a zero-hours contract and it provides the worker with the usual employment rights that any other worker would get and they are protected by the Agency Workers Regulations as well. We feel that contract is a good contract for those workers and provides them with disciplinary processes and all the kinds of things you would expect a standard employee in any other workplace to operate under.
Q59 Amanda Milling: Who decides on the nature of that contract—the 336? Is that yourselves or is that Sports Direct?
Jennifer Hardy: We would discuss it with Sports Direct.
Chris Birkby: Which contract we would use, do you mean? That would be us.
Jennifer Hardy: But they would be aware of it.
Q60 Amanda Milling: And why 336?
Jennifer Hardy: Because that is HMRC’s minimum requirement when they have looked at the contractual basis of employees.
Q61 Amanda Milling: Mr Sweeney, what about the nature of your contract?
Andy Sweeney: The Best Connection temporary workers are employed in a similar manner on 336-hours contracts and have the rights to annual leave, statutory sick pay, maternity and paternity pay.
Q62 Amanda Milling: In the last session, you will have seen that I asked some questions around prepayment cards. What proportion of your agency staff are using these prepayment cards?
Chris Birkby: We would have to get back to you on that. I want to explain to you why we use these prepayment cards and what the prepayment card offers. The prepayment cards were brought in because, if someone does not have a bank account, paying that person by cheque can do two things. It can delay the time it takes them to get their wages that they have worked for. Not only that, but we found that a lot of candidates were having to go into towns, and if they wanted to speed that process up they would then go and pay really high processing fees with cash-chequing companies. The other thing that we have tried to negate is people being paid into the same bank account. We wanted to make sure that we knew that the money was going to the person who was earning the money, so prepayment cards gave us that ability. It is not forced. It is an optional benefit; it is an option whether you take it up or not, and it can also be dropped as soon as you have a bank account. If people start with us and they do not have a bank account, they can move from prepayment cards onto a bank account.
Jennifer Hardy: It is not a mandatory requirement. It is just we are trying to give an assistance.
Q63 Chair: Why do you not help people open a bank account instead?
Jennifer Hardy: We do.
Chris Birkby: We do, and in many sites we partner up with Barclays and companies like that. They will come in and they will help set up those bank accounts. It is those initial days, when you do your first couple of weeks and you get your first payment in. We want to make sure that we get their money to them as fast as we can, rather than delaying it in any way, shape or form.
Q64 Chair: I am sorry to interrupt, Amanda, but, on that point, is the average amount of time that a person would use a prepayment card very limited?
Chris Birkby: It is totally dependent on the person. Some people prefer it. Some of the benefits they have are transferring money from here to foreign bank accounts, for example. That gives them a better facility. There are loads of benefits of using those prepayment cards. We also have other things. Perkbox is a company that provides other benefits that they can access by using that, so it is there to help them in any way that we can.
Q65 Amanda Milling: Do both agencies use these prepayment cards
Andy Sweeney: We do not use prepayment cards.
Q66 Amanda Milling: Can you tell the Committee who provides the prepayment cards? Who is the supplier?
Jennifer Hardy: I think it is Contis.
Chris Birkby: Contis, yes.
Q67 Amanda Milling: Who chose Contis?
Jennifer Hardy: It was a member of our team.
Chris Birkby: Yes, our Commercial Director.
Q68 Amanda Milling: Do you use these prepayment cards for other companies that you do business with?
Chris Birkby: Yes.
Jennifer Hardy: Yes.
Q69 Amanda Milling: Is that also with Contis?
Chris Birkby: Yes.
Jennifer Hardy: Yes.
Q70 Amanda Milling: In terms of the fees, there is a £10 set-up fee, and then a £10 monthly management fee, and lots of other fees as well. Can you explain where those fees go?
Chris Birkby: It is all charged by Contis. We do not deduct anything from the £10. They charge it from their card. We give them the platform to use it and give the people the applications to use it and they charge direct.
Q71 Amanda Milling: You are telling me that the £10 monthly fee all goes to Contis.
Chris Birkby: Yes. Also we have commercials with them on numbers that are supplied. We get a monthly rebate from them.
Jennifer Hardy: But that is not significant. We can come back to you on the actual figure.
Q72 Chair: Does that go solely to you? You do not share that with Sports Direct in any shape or form.
Jennifer Hardy: No.
Q73 Amanda Milling: In terms of insurance, there are various insurances that these agency staff are also paying towards. It can vary between 45p and £2.45.
Jennifer Hardy: We do not deduct for insurance. We do not do any insurance.
Andy Sweeney: We provide a voluntary scheme. It is a voluntary scheme where they can avail themselves of personal accident insurance if they wish. Some do; some do not.
Q74 Amanda Milling: What is the process of signing these staff to this insurance?
Andy Sweeney: They sign a declaration that they wish to have the insurance and authorise us to deduct the cost, which we transmit to the insurance company.
Q75 Amanda Milling: So you sit down and actually explain what this insurance is for.
Andy Sweeney: Yes. When the temporary worker is recruited, it is explained what the insurance is and they are asked whether or not they would like to take it.
Q76 Amanda Milling: How can it vary between 45p and £2.45? That is quite a broad bandwidth.
Andy Sweeney: The principle that it works upon is the temporary worker is covered by the insurance from when they leave home, to work, during work, and then back to home. It is charged to the temporary worker on the basis of a cost per hour worked, so that is why you have a variation.
Q77 Amanda Milling: I have had reports that people do not necessarily know that they have signed up to this insurance, and they do not understand the insurance product and why they actually have this. Can you try to explain why that might be the case?
Andy Sweeney: I cannot explain why that is the case. When they are recruited, as I said earlier, they are told about it, they are informed about it, it is explained and if they wish to avail themselves of it they sign. If they do not, they do not sign.
Q78 Craig Tracey: I have a very quick point to Transline. You said that you do not provide any insurance, so who provides the employers’ liability insurance for the staff when they are employed by Sports Direct on your agency contracts?
Jennifer Hardy: We obviously have our own employers’ liability insurance policy.
Q79 Craig Tracey: That covers them essentially as contracted.
Jennifer Hardy: That is right, yes.
Q80 Jonathan Reynolds: Panel, you said in your earlier evidence to the Chair that the rates of pay were set by Sports Direct. In terms of the other employment terms, are they set by yourselves, or by Sports Direct? Who, for instance, defines a long toilet break for the employees?
Andy Sweeney: Under the Agency Workers Regulations, after 12 weeks the temporary worker has the right to the same employee conditions as Sports Direct’s workers.
Q81 Jonathan Reynolds: The terms of the employment contract are set by Sports Direct—by the client, not by yourselves as the suppliers of labour. Is that correct?
Chris Birkby: We manage the Sports Direct terms and conditions and what they want our working staff to do. If we disagreed with those obviously we would be pointing that out there and dealing with it as collective.
Q82 Jonathan Reynolds: Have you ever disagreed with the client, with Sports Direct, about the terms under which people are employed that you supply?
Chris Birkby: When we talk about the queuing piece, with regards to the clocking-in machines, that was a joint piece of work that happened. We were obviously starting to get some noise around that, which was built up from the fast growth of the site. We worked together on that to reduce that and to get that sorted out. I think what we have done is we have worked with them on not defining so small what is a strike and what is not a strike. The strikes are there, as far as we are concerned, to ensure we manage a safe environment, and to ensure that the attendance policies are adhered to so that we deliver on our promise to Sports Direct, the customer.
Q83 Jonathan Reynolds: To both of you, do you feel a duty of care towards the people you supply to work for Sports Direct?
Chris Birkby: Definitely.
Jennifer Hardy: Yes, 100%.
Q84 Jonathan Reynolds: A particular question for you guys from Transline from the previous session is that we heard evidence that the Gangmasters Licensing Authority had revoked Transline’s licence to supply labour for the food industry, on the basis the directors were found not to be fit and proper persons. Is that correct?
Jennifer Hardy: We had an administrative error on our side, which led to us having to go through an application process for our licence. We actually only supplied one client, which is 0.8% of our business. During that process we no longer supplied that client, so we removed ourselves from the process and did not continue with the application process because we do not actually supply the food sector and do not require the gangmaster licence.
Q85 Jonathan Reynolds: Are you legally entitled to supply labour to the food industry?
Jennifer Hardy: No, because we do not hold a gangmaster licence. However, it was an administrative error that led to that. It was not a misdemeanour.
Q86 Jonathan Reynolds: A lot of people would look at that and ask why, if a company is not in a position legally to supply labour to one sector of the economy, it should be permitted to do so to another sector. Do you not think that is reasonable?
Jennifer Hardy: I think the Gangmasters Licensing Agency is set up for a very specific reason, which was down to the cockle-pickers, was it not? It is not something that would be inherent in every warehouse in the country. They did cover one of our customers and that is why we held a licence. We do not operate in that sector so we would not be required to hold a licence.
Q87 Jonathan Reynolds: Since the media reports first began to surface around Sports Direct, have you taken any steps yourself, either with the client, the unions or any kind of workplace representatives, to look into those, to try to find an evidential basis for them yourselves, or taken any action accordingly?
Chris Birkby: Yes, so the local team have done a lot. They have focused on each thing that has come out in the press—the queuing times, etc. Some of the other stuff that we have done is we are part of a committee called the NG20 committee, which is a committee that includes Sports Direct, the agencies, local police, the council, and church leaders. We are looking at how we integrate the whole site, because the site does heavily affect Shirebrook and we want to make sure that that committee is really beneficial to some of these problems. We also make sure that we now hold regular HR surgeries for our staff, so that they have a voice. We do surveys on our staff. We will do anonymous surveys via SurveyMonkey, and we do them onsite. For example, we held one last week, just before we came here, which was just a basic satisfaction survey. 96% of our staff were satisfied and above. That does not show a workforce that is unhappy.
Q88 Jonathan Reynolds: Obviously that feels like it is very inconsistent with the testimony that has been submitted, in public and to this Committee. Are you genuinely telling us you are satisfied that there are not the problems that have been reported at Shirebrook, or do you feel you are just not getting to the bottom of it, for whatever reason that might be?
Chris Birkby: There are problems. I am definitely not saying there are not problems. There are problems that arise by such fast growth of the business. Some of these problems have been created by volume, such as the clocking out. That is the amount of people that have got to go through those machines. For me the focus should be on how these problems are dealt with quickly and moved away to protect the workforce.
Jennifer Hardy: We have seen that those problems have been dealt with as they have been raised in the media. We both go down with Sports Direct and we work together to eradicate those and we have seen a massive improvement on site.
Q89 Chair: Ms Hardy you had a coughing fit.
Jennifer Hardy: Yes, apologies.
Chair: No not at all. It is dreadful when that happens and I am glad you were able to get a glass of water. We have been told that if you ask for a glass of water outside your designated breaks you would get a strike. Is that fair?
Jennifer Hardy: I am not quite sure that is actually the case. I could not comment on individual circumstances that have happened. I would say that no, it is probably not fair. However, in normal working environments would you be entitled to a break every time you so wished? You would not. It is not going beyond a normal working environment. It is trying to keep people to normal breaks and normal lunch hours. If they require water they should be able to have a drink of water; I am not disputing that.
Q90 Paul Blomfield: On Amanda’s question about the payment card, we heard earlier that the company charges £2 for issuing a card but workers are charged £10. Is that correct?
Jennifer Hardy: We need to come back on the commercials behind the card. We can come back to you on that in writing at a later date.
Q91 Paul Blomfield: So you will come back with a full breakdown of that, but you cannot say that is not correct.
Jennifer Hardy: We cannot say it is not correct. I am not quite sure it is to that extent.
Q92 Paul Blomfield: The £8 balance, or whatever the balance you come back to us with is, is something that is a benefit to your company?
Jennifer Hardy: Yes, we will confirm what the actual breakdown of that is.
Q93 Paul Blomfield: If I could move to the contract, Mr Birkby, you said that on average this year the staff are working 32 hours a week; last year it was 39 hours a week. This is an operation over 52 weeks. I am really curious to understand why you therefore issue a contract simply for seven weeks, for 336 hours. What brought you to that point?
Jennifer Hardy: We have already answered this question. It is around HMRC’s guidance.
Q94 Paul Blomfield: Let me, if I may then, ask you a question. Are you aware of section 27A of the Employment Rights Act 1996?
Jennifer Hardy: Not specifically.
Q95 Paul Blomfield: That is a provision that gives zero-hours contract workers the opportunity to work elsewhere. It negates the attempt by employers to impose exclusivity on workers. 336 hours is the threshold at which workers lose those rights under the Employment Rights Act. Were you aware of that?
Jennifer Hardy: No. I feel that our contract has been written with the Agency Workers Regulations in mind, rather than that.
Q96 Paul Blomfield: So it is simply a coincidence that 336 hours is the point at which those workers would lose those rights that they would otherwise accrue under the Employment Rights Act.
Jennifer Hardy: I cannot comment. I would have to come back to you on that one.
Q97 Paul Blomfield: People say, in defending the all-pervasive zero-hours contract, that it gives workers flexibility. What flexibility do your workers have in refusing shifts or refusing hours, without that being considered against them?
Chris Birkby: If they took it without authorised leave then yes, it would be classed as a strike.
Q98 Paul Blomfield: This is after they have worked their 336 hours; what constitutes authorised leave?
Chris Birkby: Pre-booked holidays.
Q99 Paul Blomfield: No, they are contracted for 336 hours. They have worked their 336 hours. They then have a flexible arrangement, so what constitutes authorised leave?
Chris Birkby: We are talking about assignments within that contract. When they are on those contracts they operate assignments, which can start or end within that period.
Q100 Paul Blomfield: So the advantage of this contract for the employer is that it actually does not provide even the flexibility that a zero-hours contract offers.
Chris Birkby: Can you say that again sorry?
Paul Blomfield: The defence of a zero-hours contract is that it provides two‑way flexibility. You are saying that after your staff have worked above 336 hours, they do not have two-way flexibility because they have to go for authorised to leave.
Jennifer Hardy: This contract is designed to give them the employment rights that any other worker would have.
Q101 Paul Blomfield: What additional employment rights does this contract give?
Jennifer Hardy: You would get the employment rights such as disciplinary processes and all the other things you would expect in a normal workplace. Pre-AWR, you would have found a very different type of contract in place where you could just hire and fire.
Q102 Paul Blomfield: You said that this contract gives workers rights that they would not enjoy under a zero-hours contract. What are those rights?
Andy Sweeney: If a temporary worker wished not to work because he did not want to work for four weeks, for whatever reason, then he is free not to work for four weeks. He is still employed by The Best Connection under that contract. When he comes back to us saying, “I have done what I wanted to do for four weeks; would you please put me on another assignment?” we would find another assignment for him, and that assignment could well be back at Sports Direct. If he or she did not want to go back to Sports Direct, we would look for assignments in branches local to that area. The flexibility that they have is that they can work when they want and we will help them to find those assignments.
Q103 Paul Blomfield: The contract that the workers sign up to says, “Unless there is good cause, you must accept any suitable assignment offered by the company”. Could you explain the flexibility to me?
Jennifer Hardy: We need to keep people in employment. That is our job. People want to work. A “good cause” can range from a number of things.
Q104 Paul Blomfield: You said that the contract offered flexibility but, actually, the contract says, “You must accept any assignment”.
Jennifer Hardy: It does not actually define “good cause”, and I am saying that “good cause” could cover a range of matters. If someone said, “I am going to visit someone for two or three weeks”, they would not be penalised for that. We are just saying, “Working with us, ideally we want you to be placed as best we can”.
Q105 Paul Blomfield: Give me a full flavour of the good causes, which would be permissible for people to decline work in this flexible environment that you are offering.
Jennifer Hardy: I would not be able to give an example.
Q106 Paul Blomfield: You cannot give examples of good causes.
Jennifer Hardy: A good cause, as I have said, could be if someone was saying, “I am visiting someone for two weeks”. In other sectors of our business, we have people who go to other agencies, for example, and then can come back to us on seasonal work and various things like that. We are not restricting those individuals. That contract is just basically saying, “We would like you to work for us and, if you cannot, we would want to understand why not”. If they are not going to work for us beyond that point, we will then obviously issue a P45 and they can go off on their merry way and do what they wish.
Q107 Paul Blomfield: So if they declined an assignment, they would probably get a P45.
Jennifer Hardy: That is not what I said.
Q108 Paul Blomfield: I think you have given us a flavour as to how the contract works. You said earlier that you discussed these contracts with Mr Ashley.
Jennifer Hardy: I would not say that we discussed them with Mr Ashley. I believe that Sports Direct would be aware of the types of contract that we operate under.
Q109 Paul Blomfield: Presumably, in the negotiations into giving you the contract for supplying them with labour, they would have talked about contractual terms; so they knew what contracts you offered and that was understood as part of your deal with them.
Jennifer Hardy: Yes.
Q110 Chair: You were talking about flexibility and what‑have‑you, but we have evidence supplied in front of us that says, “Transline reserves the right to end an assignment at any time without reason, notice or liability”. Why is that included in there?
Jennifer Hardy: Apologies, we cannot see what you are actually reading.
Chair: That is your complete paper, is it not?
Jennifer Hardy: Yes.
Chris Birkby: There is a strikes policy there. We started supplying Sports Direct two years ago, taking over from a previous agency, and we came in and used the same strike policy that they were using. That is how we operate the business: we do not have our own standard strike policy. Instead, we would use what a company uses on their sites, so I think that is the old policy.
Q111 Chair: Following on from Paul’s line of questioning, if I wanted to visit my family overseas and go away for three or four weeks, would that be reasonable?
Chris Birkby: Yes.
Q112 Chair: On the basis of that, you just say, “I do not even have to give you a reason; you are out.”
Chris Birkby: That is not how it is. You would apply for leave.
Q113 Chair: I have got it in writing that it is.
Jennifer Hardy: The strikes policy is not designed to be a punishment. It is not there to just get rid of people. It is not in our interests to be churning the staff all the time, because it costs a lot of money and it hinders the operation. Our interest is to keep staff on‑site and to maintain health and safety and their welfare on‑site. You will see a lot of the other strike policies relate to not wearing headphones. If someone was run over by a forklift truck because they were wearing headphones, we would then be asked why we do not prevent people wearing headphones. It is designed for health and safety reasons and for not turning up to work. We are expected to turn up to work every day, as is everybody else. If we did not call in, we would be penalised for that or at least have a discussion. That is what it is designed to do. When you have large numbers of people on-site, there is a very limited way that you can get that policy out there.
Q114 Amanda Solloway: Can I just check something? When you were talking about employment rights, I think you mentioned the fact that they are entitled to employment rights such as the disciplinary process. Did I hear you correctly on that?
Jennifer Hardy: Yes, that might have been me.
Q115 Amanda Solloway: Okay, because I also just heard as an example, when you were talking about employee rights, that, if they do not turn up, you can discipline them. I am just concerned what the positive employment rights are.
Jennifer Hardy: Redundancy pay would be a positive.
Q116 Amanda Solloway: Would it? Okay.
Jennifer Hardy: Sometimes redundancy is a business requirement. Any business could make redundancies. Under a zero-hours contract, for example, you possibly would not be entitled to any redundancy pay, whereas under a 336 you would.
Q117 Amanda Solloway: Just for my clarification, I am trying to get my head around where the benefit is in going through your agencies. How many people go to Shirebrook weekly?
Andy Sweeney: Roughly 1,700 from Best Connection.
Chris Birkby: About the same.
Q118 Amanda Solloway: That is a vast amount of the workforce. I am trying to understand why permanent contracts are not available. Who gets the benefit of using an agency?
Andy Sweeney: To an extent, there is a benefit to Sports Direct because they can have a slimmer overhead, because we are responsible for the recruitment of all of the temporary workers, we are responsible for the payment of them, for the payment of the tax, and, importantly, the national insurance for all of the temporary workers. At Best Connection we have 21 people on‑site to look after the temporary workers while they are there. If they have any queries, we speak to a number of them each day.
Q119 Amanda Solloway: There is obviously a fee that you benefit from. I am still just trying to think around the employees. Who looks after the welfare of these employees? I only hear negative things. Who is accountable for employee welfare?
Andy Sweeney: After 12 weeks, they have the same rights as the employees so they have access to the three canteens at Sports Direct. They have subsidised food if they eat in the one canteen. We have a number of measures, as was mentioned before. One of our account managers on the Shirebrook floor is on the NG20 committee. We have other meetings with Sports Directs, the district council, police and the church.
Q120 Amanda Solloway: I get the impression. What about employee welfare, from your point of view?
Jennifer Hardy: Employee welfare is our responsibility and, as mentioned earlier, we are on the NG20, which is a community-led committee that looks, both within and outside of the workplace, at the welfare of these workers and the impact it is having on the local area. We hold the surgeries daily, so we have contact with them. We also have 18 to 20 of our own internal staff on‑site so, if they have any issues whatsoever—and they actually walk past the agency office on the way out of the building—they can always come in. It is an open-door policy and they can air any concerns that they may have.
Q121 Richard Fuller: Do you believe that some of the workers that you supplied to Sports Direct were mistreated?
Jennifer Hardy: No.
Andy Sweeney: I do not believe that. I believe that certainly what we heard earlier from Unite wholly misrepresents the situation at Shirebrook, which is a modern distribution warehouse where the concerns of all of the workers are catered for. I would encourage you all to visit the site because the negative press has misrepresented what the site is about.
Q122 Richard Fuller: Mr Sweeney, are you aware of the phrase “new meat”?
Andy Sweeney: No.
Q123 Richard Fuller: We had evidence of someone who works at Shirebrook. The phrase “new meat” is commonly used by people who work there regarding new female employees. Have you had any feedback about that in your organisation?
Andy Sweeney: No.
Q124 Richard Fuller: Have you heard of people being called “selfish” because they felt that they should leave at the end of their allotted time?
Andy Sweeney: No.
Q125 Richard Fuller: Have you heard any evidence of people being hit?
Andy Sweeney: No.
Q126 Richard Fuller: Obviously, you have heard about the relatively arbitrary disciplinary system of strikes.
Andy Sweeney: Yes.
Q127 Richard Fuller: As a Committee, we have heard evidence of each of those from across Sports Direct, but you are saying to this Committee, as a provider in each of your cases of over 1,000 people a week, that, to the best of your knowledge, no one has been mis‑treated by Sports Direct.
Andy Sweeney: Yes, to be the best of my knowledge.
Jennifer Hardy: That is correct.
Q128 Peter Kyle: Do you communicate with all of your agency staff? Do you survey them?
Chris Birkby: The way the site is structured is that we have an account manager. We then have team leaders. Below that, we have the co-ordinators.
Q129 Peter Kyle: What is the response rate? How many of your staff do you get active feedback from?
Chris Birkby: The way that it is structured is that there is one co-ordinator for every 60 to 80 staff; so we expect them to speak to those staff at least one a week with any sort of contact.
Q130 Peter Kyle: The question was: how many of your staff do you get active feedback from? It was not about how many of them have the opportunity to speak to someone. How many of your agency staff actively feed back, so you get active information back from them about conditions, satisfaction at work, health and safety and welfare?
Chris Birkby: The only way we can monitor that is when we actively do surveys and get responses back.
Q131 Peter Kyle: How often do you do that?
Chris Birkby: We did one previously.
Q132 Peter Kyle: When was the last one?
Chris Birkby: When was the last one?
Jennifer Hardy: I did that about three months ago.
Q133 Peter Kyle: What was the response rate?
Jennifer Hardy: We had 45 responses out of 2,000. I think that indicates that it was—
Q134 Peter Kyle: It could indicate that people are too scared to actually respond because they fear there will be consequences.
Jennifer Hardy: I am not sure that is the case.
Q135 Peter Kyle: Let’s not assume we know why people are not responding, because there could be a variety of reasons. I am quite concerned about some of the lack of detail of employment law that you are aware of, considering just how many people you employ and put into a workplace. On the other extreme, I have been really concerned, listening to you, about the lack of high-level moral engagement and awareness of what is happening in the workplaces that you are putting staff into. In response to what has come out in the media, you have set up a committee that has the good and the great and involvement from the church in it, but what is extraordinary to me is that you need a priest to tell you that some of the things that are going on and are being reported in the press are wrong.
Chris Birkby: What we are trying to get across here is that we go to the sites and we have teams on the sites. We can only listen to these media reports and act upon them. When we do these investigations and we work with our teams and we are not finding the things that the press is bringing to the table, we then go and do whatever else we can to prevent it.
Q136 Peter Kyle: So you are doing it yourself. What training have you had to go into a workplace and to look, to listen and to understand the culture of a workplace and also to make sure that people are telling you the truth, and not, as somebody who is responsible for a lot of people being placed into work and their welfare, that they are telling you what they feel you want to hear?
Chris Birkby: It is not me as an individual; it is we as a group. It is the other agency, ourselves and Sports Direct.
Q137 Peter Kyle: You mentioned fast growth as being one of the reasons that employment practices have decreased or issues have arisen. That is extraordinary to me because, when we are talking about the way one human being treats another—and we have heard, as Richard has said, some pretty appalling abuses in relationships—what you have described and put down to fast growth is inhuman to me: that, just because you are in an environment which is fast-changing and fast-growing and has a pace to it, that that would somehow be responsible for moral degradation in the workplace. The first company I ever worked for was The Body Shop as an 18‑year‑old. I was an invoice clerk. That was a company that doubled in size every 18 months. I was treated like a prince. What you are describing is something that is inhuman and you put it down to fast growth.
Chris Birkby: That is not what I am saying. What I am saying is that some of the problems that arise are down to the volume of traffic such as clocking‑out machines. That is down to the fact that they have gone from X-hundred going out of those doors to a larger amount going out of those doors.
Q138 Amanda Milling: I want to get a bit of clarity. Earlier in the session you said that you surveyed your agency staff last week, ahead of coming here. Then, in answer to Peter, you had to actually discuss it and say, “When did we last have it?’; ‘Oh, it was about three months ago”. Could we have a bit of clarity here?
Jennifer Hardy: We did a full survey of all the current workers a few months ago using SurveyMonkey, which is an electronic process. We emailed every single worker and asked for a response to whatever questions we wanted to get answers to.
Q139 Amanda Milling: Can I just stop you there? You got 45 responses.
Jennifer Hardy: I got 45 responses to that, yes. On that basis, I am saying to all the workers on-site, “We want feedback from you. We want to understand if you have any concerns or any issues.” It was a nicely proposed email. There is actually a reward for filling it out. There was a straw pick of someone who filled it out and there was an incentive there to actually give us that feedback.
Q140 Amanda Milling: Was that SurveyMonkey last week?
Jennifer Hardy: The one last week was a face-to-face survey.
Q141 Amanda Milling: How many people responded to it?
Jennifer Hardy: We had 348 responses and we got 96% positive.
Q142 Michelle Thomson: You suggested earlier that these surveys were ongoing, so would you be able to provide a specific example, say, from a year ago with tangible responses?
Chris Birkby: We do them on an ad hoc basis rather than as a structured thing. We should probably move forward to a structured survey process.
Q143 Michelle Thomson: Would you be able to provide us with any evidence? For example, would you be able to provide us with a copy of the one that was being talked about last week?
Jennifer Hardy: Yes.
Q144 Michelle Thomson: Are they anonymous? Do people get to get answer questions anonymously, or can they be tracked to the person?
Jennifer Hardy: The one last week was anonymous. Although it was face‑to‑face—
Q145 Michelle Thomson: It was an anonymous face‑to‑face. I do not understand that.
Jennifer Hardy: Anonymous in the fact that the results that were presented were not by individual. They were giving an answer to someone. However, when you survey hundreds of people, you are not going to remember exactly what each individual said.
Q146 Michelle Thomson: So they are not anonymous. They can still be tracked.
Jennifer Hardy: We would not be able to tell you who answered which question. The results are anonymous.
Q147 Michelle Thomson: Somebody would, however. Just to pick up with yourself, Andy, could you provide some evidence of people signing up to their understanding of insurance from, say, a year ago? That would be quite helpful. Finally, why is it that they need insurance when it is the employer’s responsibility to provide that? I get what you are saying about travelling to and from work but, when they are there, why do they need double insurance?
Andy Sweeney: It is not double insurance. If they have an accident, it does not affect any other insurance that may be in place. They receive a cash sum. For example, since we have operated, we have had three people who were killed in the workplace across all of the companies that we supply, and the family of the deceased in each case benefitted by £125,000, which was the pay-out for the insurance.
Q148 Michelle Thomson: Presumably, when they sign up to that, they get a policy document that sets out the benefits. It would be useful if you could give us a copy of that. Thank you.
Andy Sweeney: Yes.
Chair: Thank you very much for your evidence. It has been incredibly informative and extraordinarily illuminating.
Examination of Witnesses
Witness: Mike Ashley, Executive Deputy Chairman, Sports Direct International, and Keith Bishop, Keith Bishop Associates, gave evidence.
Q149 Chair: Mr Ashley, welcome. That looks suspiciously like a Newcastle United tie to me. I would like to thank you for attending this morning. It has been a somewhat lengthier process than I anticipated when I invited you to attend the Committee, and the stakes have been raised perhaps more than both of us would have liked. However, I do hope that we can share a constructive, balanced and collaborative approach. It is fair to say that we know who you are, Mr Ashley, but, for the purposes of the record, could you at this stage give your name and your role within the company as well as briefly introduce your companion with you today?
Mike Ashley: Mike Ashley, Sports Direct major shareholder.
Q150 Chair: Could you introduce Mr Bishop?
Keith Bishop: I am Keith Bishop. I am one of Mike’s advisers on PR. I am very grateful to be here today and I am really grateful to hear that the hearing will be fair.
Q151 Chair: We have a lot to cover today. Please be assured, Mr Ashley, that I am really keen to give you as much of an opportunity as possible for you to have your say, for you to tell us your side of the story, and for us to have a proper and meaningful dialogue. I hope we can achieve that through questions and answers and through conversation. If you do not think that we have covered everything that you would like us to, we would welcome any statement that you would wish to make at the end of our questioning.
May I start with the review that you announced six months ago? You were personally undertaking this review into working practices in Sports Direct. What is the current status of the review?
Mike Ashley: Work in progress.
Q152 Chair: When will it be completed?
Mike Ashley: Never.
Q153 Chair: It will never be completed.
Mike Ashley: It will never be completed.
Q154 Chair: How can you improve working practices if the review will not be completed?
Mike Ashley: Because it is an ongoing process.
Q155 Chair: What are your preliminary findings, six months into it?
Mike Ashley: As I have explained, it is an ongoing process. I have discovered some issues and hopefully I have addressed some of those issues.
Q156 Chair: Could you give us an example of those issues?
Mike Ashley: The bottlenecks at security is the major issue.
Q157 Chair: Why did you think this review was necessary?
Mike Ashley: Because of the media attention that Sports Direct was receiving. It was better that I stepped in and said, “Okay, there can be no hiding from anything if we underachieved or whatever it is. If I personally do it then nobody can say that somebody was reporting to somebody else and there was a blockage.” It was therefore better that I did it.
Q158 Chair: On that point, Mr Ashley, I was going to question you with regards to that. Are you the right person to do it? You are the founder of the company. You have grown this company into a successful organisation. You would not be impartial when it comes to this. Do you need somebody independent to look at this with a fresh pair of eyes?
Mike Ashley: I can agree with you that, in some ways, I am not the right person because I am not an expert in every area of employment, obviously. It is not my field of expertise and it is not what I do for a living. Yes, there could be other people that could have been better qualified than me to do it, but I felt, in the short term, that I would be the person to be able to make the most difference. That is why I offered to do it.
Q159 Chair: Thank you. Who did you speak to as part of this review?
Mike Ashley: In terms of non-execs or in terms of workforce or in terms of whoever?
Chair: In terms of everybody. What was the nature? What conversations have you had when it came to the review?
Mike Ashley: It would take me more than this whole thing to talk about how many conversations. Do you mean if I talk to pickers, forklift drivers, lorry drivers? I would say that I touched most parts of that business in Shirebrook and the people at Shirebrook.
Q160 Chair: Did you speak to the trade unions?
Mike Ashley: No. Actually, that is not true. I spoke to the trade unions last September at the AGM.
Q161 Chair: The review, however, was initiated in December.
Mike Ashley: Correct.
Q162 Chair: Are you planning to speak to the trade unions?
Mike Ashley: Hopefully at this year’s AGM again, yes. It is an open thing; they can come.
Q163 Chair: Is that the only time that you speak to trade unions?
Mike Ashley: Me personally, yes.
Q164 Chair: I am keen to understand what you are doing in respect of a systematic review of working practices in Sports Direct, in terms of just getting a feel of who you have spoken to and whether you have a timescale. Mr Ashley, I fully understand, as majority shareholder of the company, you want to see the company improve, and it is an ongoing process. However, the review seems to indicate a particular timespan. You do not think that that timespan is in place.
Mike Ashley: I do not think that there is ever going to be a timespan whereby you stop trying to improve things.
Q165 Chair: In terms of what you have been doing with regards to this review, are there some things that you found out that you did not know before?
Mike Ashley: Yes.
Q166 Chair: Have things come as a shock?
Mike Ashley: Some things have come as a bit of an unpleasant surprise, yes.
Q167 Chair: Could you tell the Committee what those unpleasant surprises are?
Mike Ashley: As I said, the first thing that I looked at was the bottleneck, and that was not our best ever day.
Q168 Chair: In terms of the allegations that were made in December about searches and bottlenecks, do you accept that the company was effectively paying workers below the minimum wage?
Mike Ashley: On that specific point, for that specific bit of time, yes.
Q169 Chair: Have you now addressed that?
Mike Ashley: I hope so. I am not there 24 hours a day, seven days a week. I can only encourage and say that we cannot have a system where we have 10 times more people than we would have ever envisaged for Unit A. I can understand in Unit A where the bottleneck could occur and, now we have opened Units C and D—and it is on two levels now and a footbridge and their own car park—there should be no reason for getting bottlenecks at security. I can guarantee that there will be the odd occasion where it will occur because something will happen. I have no idea what it is. It could be a thunderstorm or something and, for whatever reason, there is a bottleneck. I do not know why a thunderstorm would cause a bottleneck; I am just trying to give you a silly example of something. The process is now in place, so that genuinely should not happen because they have the capacity now. It is 10 times the size. Unless we grow by 10 times again, we should never experience the same bottleneck problem.
Q170 Chair: When people are searched at the end of their working shift, are they now paid for that?
Mike Ashley: Are they paid for that?
Chair: If I clock off at 5 o’clock and it takes five or 10 minutes, would I be paid for those extra 10 minutes?
Mike Ashley: No, but you should not take five or 10 minutes. That is the point. It should literally be a constant flow. You should be finishing your shift and more or less be able to walk through. That is the thing that I have tried to put in place. It should literally be able to help hundreds of people go through per minute. That is the idea of the flow. That is what we have created. That is how it was originally, 10 years ago. It should be back to that same flow.
Q171 Chair: You are a very hands-on proprietor and retailer. How often are you at Shirebrook walking the floor?
Mike Ashley: In the warehouse? Once a week.
Q172 Michelle Thomson: Good morning. Thank you for coming along. I wanted to chat a little about culture, if I could. They say organisational culture is a system of shared assumptions, values and beliefs, which governs how people behave in an organisation. Could you just briefly describe the culture of Sports Direct?
Mike Ashley: At Shirebrook or as a business?
Michelle Thomson: As a business.
Mike Ashley: The culture at Sports Direct is a very hard-working culture, but therefore it should come with high rewards. That is the culture of Sports Direct.
Q173 Michelle Thomson: If there is one value that you think is held dear from the very top to the bottom, what would that be?
Mike Ashley: It is the people at Sports Direct.
Q174 Michelle Thomson: The people, but what one value is—
Mike Ashley: It is the people. That is the value. The value of Sports Direct is the people, finished.
Q175 Michelle Thomson: So you value the people more than anything.
Mike Ashley: Correct.
Q176 Michelle Thomson: Who sets the prevailing culture, in your opinion?
Mike Ashley: I think it actually sets itself. With Sports Direct, people always ask me, “How do you manage it? Mike, I am not being funny; it is a lot, lot bigger than you, and it is a lot bigger than your capabilities to manage it.” You say, “Yes, but it grows itself. It becomes its own thing.” I did not build Sports Direct; Sports Direct built me. Do you understand? It is like going out one day and you have got a tiny little inflatable and you are in control, then you wake up one morning and you are an oil tanker. You cannot be all over that oil tanker. If there is a problem on that oil tanker, you are still responsible. Ultimately, I am always responsible for Sports Direct. I am aware of that.
Q177 Michelle Thomson: I understand what you say about scale, given the background I had prior to this place. Therefore, what processes do you have in place for employees to give their view as to the culture, employee engagement and so on?
Mike Ashley: We try to split the firm into divisions. You would have retail as one element. They would have their own heads, reviews and policies they will follow. You then have the warehouse as another element. You have to try to break it down a little bit. If you imagine that oil tanker, you have got to split it into sections. You have got the engine people, who have got to look after the engine. You have got the captain, who has got to look after the wheelhouse. You have got various groups that therefore look after various sections. They all tier up in a system until they come to the top.
Q178 Michelle Thomson: Do you have specific processes in place whereby people give tangible, specific feedback on a regular basis that is filtered back to you, in terms of management information?
Mike Ashley: Filtered back to me is not necessarily always the case, but it is filtered back to their head, and then their head, and then their head. I would not get to know of every single thing that goes on in Sports Direct, no.
Q179 Michelle Thomson: How does the culture differ between the warehouse and the retail outlets? Is it the same? Do you see a difference? Who is responsible for creating the pervading culture, say in the warehouse as compared to the retail outlets?
Mike Ashley: We have a director of retail. In retail, she therefore has to do it more regionally. For example, you might have international retail and you might have UK retail. You then have it by region and then areas within it. Shirebrook is a little different because it is clearly in one geographical area. The warehouse in Shirebrook is also responsible—“responsible” is probably the wrong word. European warehouses report into it. Sports Direct is a truly global business, so who is responsible for the warehouse in North America? How many of them have Sports Direct got? I cannot keep track of even how many companies there are around the world. It is just too big.
Q180 Michelle Thomson: Obviously we are primarily interested in your company. How do you benchmark excellence in terms of employee engagement? Do you use any external evidence?
Mike Ashley: The various heads have the autonomy to use whatever they wish to get to those conclusions, if that makes any sense. For example, do we have secret surveys or whatever you want to call it, or secret shoppers, or all those sorts of things going on? Absolutely, yes. Do I see the results of those? No, not necessarily.
Q181 Michelle Thomson: How do you know that that is actually happening if you do not see the results of it?
Mike Ashley: Because I am told we have a process in place. There would be no point in me reading a report that I would not understand. You can produce a secret shopper survey, or staff survey report, or whichever report it is. It could be the secret security survey. You would say, “Okay, how are we getting on? What is the measure?” I would have been involved in setting up the measures over the years.
For example, on stocktakes I would have had a tolerance on stocktake views that we would have worked for 10 years, five years, two years or whatever amount of time. That would then get taken on by that group, and they would then carry on managing that. There would be no need for me to look at every single report.
In turn, as you can imagine, Sports Direct would produce thousands of reports a week, literally thousands of different ways of measuring different things. Some are miniscule and automatic. Others will be, “This is an issue. This is a problem. Flag this up.” They should really only flag to me where there are red flags, where there are problems. That is more what I would tend to deal with. I would tend to deal with the problem. I do not deal with the stuff that is running along quite smoothly. If it is running along quite smoothly it should not necessarily come to my attention. It would be more the red flags that would appear. There they would say, “Mike, we have a problem with this”, or “Mike, we have a problem with that. What is your view? Is it right? Do we need to change it? Do we need to make it softer? Do we need to make it longer? Do we need to change the measure itself?” It is those kinds of things.
Q182 Michelle Thomson: In our earlier session we heard tangible evidence that Transline, in particular, were unable to articulate a clear, specific, ongoing regular process for gathering staff feedback. They referenced a recent survey for which they got 45 responses out of circa 3,000 people? Would it surprise you to know that?
Mike Ashley: When you ask people to surveys you would be amazed how they do not participate in them. What you would think is, if you give people the opportunity to give feedback, they would love to give lots of feedback. In actual fact they do not. They actually think it is nothing to do with them, and they do not bother to put the feedback in.
I find the best way to try to get that correct base to make those differences and those changes is to go and talk to the people myself. You do it with your own eyes. You are in there and talking to them. You ask them what sheet they are doing, how long it is and if have they had any problems, and whether they have any noes. You will get more from that than you will trying to puzzle out a questionnaire where, for whatever reason, people do not naturally fill them in. They just do not.
It would be easier if everybody did. You would then turn round and say to me, “Make it compulsory; they have to fill them in.” I could actually see some value in making the surveys compulsory. People would say, “No, you cannot make them compulsory.” It is a little bit of a rock and a hard place, and you cannot win. If you sit here today and say we should have compulsory surveys at Sports Direct in Shirebrook, out of Shirebrook, wherever, I will say, “Okay then, let us try that.”
Q183 Michelle Thomson: Would you be interested in engaging with Unite to see the feedback that they have gathered?
Mike Ashley: Let me explain what my view is on Unite. I believe for the people at Sports Direct I can do a better job than Unite. Sports Direct can do a better job for the employees at Sports Direct than Unite.
Q184 Michelle Thomson: Is that a view shared by the employees, in your opinion?
Mike Ashley: I would hope so. When I am talking about employees I am talking about the whole of Sports Direct. I am not just talking about Shirebrook. I am talking about the whole of Sports Direct. I am actually very proud of not just the money that Sports Direct paid to the people at Sports Direct, but how they actually produced that result themselves. Those amazing results at Sports Direct do not come from Mike Ashley; they come from the people at Sports Direct. They are pretty amazing results. They have managed to get themselves somehow to number one, and they have managed to reward themselves. That is fantastic. I am not going to stand in their way and stop that, if that answers your question.
Q185 Chair: Mr Ashley, you have cast doubts about the worth of staff surveys. There is some merit in what you say. When you are on your travels, in the shops and in Shirebrook, speaking on a one-to-one basis with the staff, what are they telling you?
Mike Ashley: Normally they want to just improve the system. Normally they actually criticise what we are doing. Normally if you, for example, stop a picker they will tell you there was not enough stock in that aisle, they cannot get their sheet out quick enough, there are delays, there are problems, and, “Maybe we should do it like this”. I do not just always stop and talk to a person. I could stop and talk to five people or a dozen people. It is an ongoing process. Most of the people at Sports Direct want Sports Direct to do better. They are actually very proud of what they do.
Q186 Chair: How honest do you think they are? Would they say to you, “Mr Ashley, I am not allowed breaks to go to the toilet properly”? I just want to get a flavour. Are they able to say to you, “This is how it really is in your company”?
Mike Ashley: I can understand that. It is that, “Nobody would ever tell you the truth, Mike. You are the guy who actually does not know what is going on.” I can understand there could be a lot of reality in that. I can understand that. I do not know. That is a difficult one.
Keith Bishop: This is the man who goes into the staff canteen three days a week and dines with all the workers there. You engage in conversation with them on those three days.
Mike Ashley: I know them. I understand. I have worked there all my life.
Q187 Chair: You will understand I am just trying to get a flavour. If I have you in front of me and I am one of your workers, am I going to tell the truth to you?
Mike Ashley: You are 19 years old and Mike Ashley walks up and starts saying, “Are you having a good day?” What is the bloke going to say, “No, awful. Do you know how badly…”? I accept the point, and it is a valid point.
Q188 Chair: This goes back to my earlier point about whether the review could have been done by somebody impartial, as a result of that. With the greatest of respect, Mr Ashley, that 19-year-old kid on the shop floor could be very intimidated.
Mike Ashley: I accept that. I work with a huge amount of people, so I do not just ask the people on the shop floor how things are going. I would ask all of the levels of all of the people, so hopefully I would get a more balanced view from that point of view. Hopefully I would get more negativities coming through, etc.
If you are sitting here with me today and saying, “As this group, there is one thing we want you to do. We are going to recommend three impartial people that we want to come and do a review of your entire business”, I will sit here and say the same to you: “I have got nothing to hide. Come on.” Will you find it 100% perfect? Of course you will not. You will find things out that I obviously do not know are going on or happening.
That is why I say for me it is forever. That process will go on for as long as I am at Sports Direct. I did the first bit of the review, or started the review, or whatever you want to call it, whatever language. I have no issues with this as an ongoing process. I prefer it to be totally independent, because we will get some stuff then that we can work on. Sorry, but it is important.
Chair: I want you to speak.
Mike Ashley: This is important. To me it will not be on the positives. It will be on, “Where are the negatives? Where is this bottom 10% or 20% of this we have got to work on? These things need changing. Which of these things should we already have changed? That is unacceptable. Which of these things did we not know about? How can we not know about them?” Then you have to change it again and again and again.
Q189 Chris White: Mr Ashley, we have already talked a bit about the review. We have talked about cultural change. You have responded, understandably, by saying it is a work in progress. You have addressed, or you appear to have addressed, one of the issues I was going to raise with the length of time security checks will take. That seems to be one of your things that you want to talk about. As a technical bit of detail, I wondered if you had thought of moving the clocking-in station to after the security check. That would be something for you to think about.
Mike Ashley: I have not got a pen and a paper, sorry.
Chris White: That is fine. I am sure somebody is taking notes of this meeting.
Mike Ashley: If we are able to do that—when I say “able”, I must make sure we are physically able to do that. It is no good me sitting here saying to you, “Oh, done”. What happens if I am not able to do it for whatever reasons? If I have reasons why I do not, I will personally write to you and tell you why I did not, but there must be reasons. It may be that the better thing is to give people the minutes. What I did is say, “Do not worry about people leaving exactly on the minute. Give them an extra minute. If you pay them an extra minute, guys, nobody can then moan. Instead of moving all the costs, moving all the systems around, just give people a free minute. In theory, you have told me, we can walk through this now, so therefore the minute is maybe the easier way, in my review, of solving the problem.” I know I am a noise-box and a chatterbox, but I had better check I have done the minutes. What happens if I have not?
Q190 Chris White: You cannot say fairer than that. There are some other specifics that I was going ask whether they had changed since December 2015: fining staff for late clocking on; do not award overtime for late clocking off; relying on zero-hours contracts; banning workers from wearing over 800 clothing brands at work. Have you addressed those in a similar fashion?
Mike Ashley: Can you start at the top of the list, then I will run down?
Q191 Chris White: Fantastic. Fining staff for late clocking on.
Mike Ashley: What we had there was if you were a minute late you got docked 15 minutes’ pay. If you ask me what I think, I think it is unacceptable. If I thought it was acceptable, I would not change it. So you say, “Well, we did not have to wait for”—not being rude—“an independent review.” Some of the stuff we should be able to get through ourselves on the first pass.
Q192 Chair: That is really important, and we welcome what you have said. Have you changed that practice now?
Mike Ashley: Yes, as I understand it we have. You understand I do not physically do it. It is a bit like the minutes. I am now terrified we have not done it. I would sit in a meeting and say, as I said, “Give me the red flags. That does not sound fair. That does not sound reasonable.” I am not Father Christmas. I am not sitting there and saying “I am going to make the world wonderful”. You just have to try to get a balanced view and say, “As an individual, would you tolerate that? Is that fair?” If I honestly believe that it is not, I change it.
Q193 Chair: Could I just ask, in terms of that, the docking of 15 minutes’ pay if you are a minute late, who set that up in the first place?
Mike Ashley: The truth is I honestly do not know. I do not know when that started. It was definitely not a policy that I put in, because I actually do not believe it is fair. If you ask me, I do not believe it is fair. If one of my kids went to work somewhere and they were two minutes late and got fined 15 minutes’ pay, I would not be very impressed by that. That is unreasonable.
Chris White: We are only up to two on the list.
Mike Ashley: Yes. I was just saying we changed it to one minute is five minutes, and then put on three minutes.
Q194 Chris White: The second point is: do not award overtime for late clocking off, so the other side.
Mike Ashley: No, we have not addressed that issue yet. I agree it should be addressed the same way as the first issue. I have not got round to that one yet.
Q195 Chris White: Criticising workers over the tannoy for not working hard enough.
Mike Ashley: This is a bit of a myth. It is not something that I was aware did happen, but if it did happen I would like to think it does not happen anymore. Let me explain that totally clearly. I will give you an analogy, so it makes it crystal clear why there is even a tannoy system. Imagine you go to an airport and they say, “The plane is leaving on gate 74. The plane is going to leave on gate 74 in seven minutes.” If you have got someone who has got the last stillage on that lorry, the lorry cannot go until the cage is there. For whatever reason, you need to try and find out where the cage is, what has happened. You will call out and say, “We need all these cages to gate 74”. The gate can change. Say the gate is now gate 12, on the tannoy you say to everybody, “Whoever is picking sheets blah, blah, blah, these are the names of the people; now go to gate 12.”
I am not going to say there were not cases of it, because clearly there must have been. However, this is one where it may have been overplayed, because it does not exist. To my knowledge, it does not exist, not in a never scenario but in an unreasonable scenario. It genuinely does not. You cannot communicate with 2,000 people in a warehouse by talking to them. You have to have a tannoy system. If you think about it, it is logical. As I understand it, your question is, “Is the tannoy system abused and is it abusive?” That it should not be. That is the answer to that question, not that we should not have a tannoy system.
Again, an independent reviewer or whatever can come as long as they like. They can come annually for five years. I am not afraid of it, because if we are abusing it we deserve the cane, simple as that. If Sports Direct abuses things it deserves the cane, like any other company deserves the cane. There will be occasions when we deserve the cane, no matter what I sit here and promise.
Q196 Chair: You have kindly invited us to Shirebrook. You offered us your helicopter. We were very grateful.
Mike Ashley: Yes. There are actually far too many of you. You would not get very far.
Q197 Chair: You might need to buy a bigger helicopter. Could we turn up unannounced on a date that we do not tell you about?
Mike Ashley: 100%, 24/7. Any persons here can do it, but all I want is fairness and balance. Is that fair? You will be let in and everything else. I am telling you you will find things wrong, but let us do it then constructively and move forward.
Q198 Chris White: To change the tone, we have had evidence from a woman saying that she was promised a permanent contract, as opposed to an agency contract, in return for sexual favours. Are you aware of that?
Mike Ashley: I am 100% unaware of that. Sorry, I am 100% unaware of that.
Q199 Chris White: That is fine. I have two more questions for you. One is regarding your health and safety record. A total of 110 ambulances were dispatched to Shirebrook between 1 January 2013 and 19 April 2016. Do you think that is excessive?
Mike Ashley: Absolutely, yes.
Q200 Chris White: What systems are you putting in place to address that?
Mike Ashley: That is, again, all part of the review. Let us assume that all of those were absolutely needed; every single callout was needed. Why have we got so many callouts? How are people getting injured in Sports Direct? It is a simple warehouse that takes in goods, puts them on the shelf, takes them out, puts them in a cage and they go on the lorry. It is a very simple process. You cannot have that number of serious incidences. It is impossible.
If it is not that, why are we doing so many calls? I am told they were—how can I put it?—over-quick to pick up the phone to call the ambulance service. My understanding of the process is that somebody would get on their radio and phone to security. For example, if you are not feeling well, if you get all sweaty, like I am now, you are feeling a bit “Whoa”, and you say to your line manager, “I am feeling under the weather”, they could well have called an ambulance. The first thing they did was to say, “We have got an incident”, they went to security and security called the ambulance. That is probably not the sensible thing to do. Why do you not sit the person down, give them a glass of water and see how they are? After five minutes they can be fine. If they have got pains in their chest or pains in their arm, you say, “Okay, please”. We should have a process that does not mean we just—take this the right way—willy-nilly call the ambulance service.
Q201 Chris White: Mr Ashley, I would suggest that someone giving birth in a toilet in the warehouse was not being overhasty to call for an ambulance.
Mike Ashley: No.
Q202 Chris White: My final question is with regard to the wider perception of Sports Direct in the local community. At the end of 2015 the council and Derbyshire Police introduced a public space protection order banning consumption of alcohol, further restrictions in public spaces and antisocial behaviour in the town square by workers from Sports Direct. How would you address an issue like that?
Mike Ashley: With great difficulty. That is not an easy issue for me to address, because it is actually outside of the Sports Direct premises. As I understand it, we then talk to the relevant groups and we say, “Is there anything we can do to help here? What can Sports Direct do?” They can say, “You could train people on, for example, alcoholism”. I am making this up now, by the way. You could say, “You should have a better balanced life”, to those groups. However, to actually then try to look you in the eyes and say, “I can do very much about that”—that is nearly an impossible thing for me to commit to being able to make much of a difference on.
I cannot help very much how people behave outside of Sports Direct. I do not think I can. We can talk about it. We can produce pamphlets. We can try. We can do that, but after that I am struggling to do much more, in my opinion. It is not ideal. It is not what I want, but honestly I cannot do much about people wanting to get drunk on a Saturday night. What can I, Mike Ashley, do about that, seriously? What could you do, Chris? You tell me what we could do then.
Chris White: It is still us asking you questions at this stage.
Q203 Chair: Following on from the line of questioning from Chris, is the “six strikes and you are out” policy fair?
Mike Ashley: If it is executed correctly, if there is not abuse of it, and if the six strikes are actually reasonable then it is okay. You have to have some kind of system. Let us call it “26 strikes and you are out”. Is that right? Yes, if it is executed correctly. It is not the six strikes themselves. It is getting the group of people together and saying, “Would you want your son and daughter under that regime?” It is simple. If the answer is no, what you have put in is wrong. You need to change it. You need to be reasonable. You need to be fair.
Q204 Chair: Will you change it as part of the review? Are you looking at that when you change things?
Mike Ashley: That is why I say the whole thing is a never-ending process of review. Now you are going to come down and say, “Hang on a minute. You have just committed to us that you are doing 20 things all at once.” That is what I do not want to do here today. I am happy for you to come. I am happy for you to have an independent whatever you call it, timescales, things, measures, and so on. You guys will make a difference. Do not worry about it.
Q205 Chair: Can I just press you on that? When you said that it is an ongoing review, you sound like a Government Minister. That was probably a criticism, sorry. I apologise. In terms of the “six strikes and you are out” and the review, could you pledge a timescale that you will look at that, whether you think that it is appropriate, whether it is enforced correctly, and that you will make changes according to your findings? Could you give the Committee that?
Mike Ashley: If we just pick on that thing and I do not commit to doing too many things all at once, I would say a reasonable period for that is 90 days. You are asking me. That is not my field of expertise. If it is going to be longer than 90 days or it needs to be 180 days, or whatever it is, off the top of my head—all the advice that I am given for these meetings is to not commit to things and to give short answers. No, I am here to talk and I am going to. If 90 days is not appropriate then I will write to you saying, “Actually, 180 days is more appropriate”, or “It is 360, and these are the simple 10 reasons why”, or three, or four, or whatever it is. You people are pushing against an open door. You are not pushing against a closed door with me. Let me make that clear. So 90 days then, or I will write to you to say it is different.
Chair: That is very helpful. Thank you.
Q206 Amanda Solloway: I am going to go on to shops, if that is okay. I just feel that I should let you know that my daughter did work for Sports Direct for six years.
Mike Ashley: Good.
Q207 Amanda Solloway: I will maybe allude to that later, but it was not absolutely good, I have to say. First of all, could you explain to me what the expectation is in terms of hours that people work that they are not paid for?
Mike Ashley: So we are talking about in the stores.
Amanda Solloway: Yes.
Mike Ashley: Are we are talking about full-time employees?
Amanda Solloway: It would be just to get a flavour of anybody who works on your shop floor.
Mike Ashley: Hours they are not paid for. If you take an example, I have got to build in whether that person get bonuses. For example, if you get a stocktake bonus it might take you an hour to do a stocktake as a full‑time person as part of your monthly rota, or two or three. However, you might get 5% of your annual salary as a bonus, because you have qualified on the stocktake bonus. I am going to get the figures wrong, but my understanding is that something like 80% of people are on a bonus structure in the retail. Any extra they do should be more than matched by the bonus that they receive. It should be; that is my understanding.
Q208 Amanda Solloway: That is employed by your contract, not necessarily employed through agencies, as an example.
Mike Ashley: I believe in the retail that is through us, in the vast majority of the cases.
Q209 Amanda Solloway: We have had some evidence. I have just been looking through some notes, and there is actually a quote that we had. Somebody was actually told in one of the retail outlets that “you come across as quite selfish as you always want to leave on time.” Now I imagine that is going to come as a shock to you that you hear that. How does that make you feel?
Mike Ashley: That somebody said that to somebody?
Q210 Amanda Solloway: One of your management said that to somebody working in one of your stores.
Mike Ashley: Are we absolutely certain that is the case?
Amanda Solloway: I believe we actually had written evidence.
Q211 Peter Kyle: If I can come in here, this actually was written. It was in somebody’s evaluation.
Mike Ashley: Okay, so it actually definitely happened. Fair enough.
Q212 Peter Kyle: The exact quotation is, “You come across as quite selfish as you always want to leave on time.”
Mike Ashley: That is not correct, is it? What do you want me to say? That’s clearly, clearly, clearly wrong. I cannot control everything all the time. I agree with you that it is wrong.
Q213 Amanda Solloway: Just for further clarification on that, we have also seen examples where, if somebody is new to Sports Direct, they attend training but they are not paid for that. Do you know if that happens?
Mike Ashley: You are going to catch me with these things. You will have to give me the circumstances, and then I will have to look into it and say, “If it is possible, it should not be possible. You are going to say, ‘I have some evidence and it is this and it is that.” I am going to say the same thing again: “Therefore that should not happen”. There will be things in a company that size that do happen that should not happen. All I can do is work on whatever with whoever. There is an amazing amount of people at Sports Direct who are making sure that those things do not happen. We do not just ignore things. We actually try to put things in place to make sure that it is a fair and a balanced place to work at because, as I have explained, Sports Direct is its people. I can assure you if I drop dead tomorrow Sports Direct does not stop.
Q214 Amanda Solloway: I will just go on to a couple of other questions, if I may? It may be that they will probably clarify a couple of things. I am just thinking in terms of staffing levels at your stores. How do you work them out? Do you factor in sickness and holidays within the hourly capacity?
Mike Ashley: My understanding is that we have what is called a Kronos system; you try to evaluate how many hours are required that week for that estimate of takings. Now when people say, “You can predict a retailer. It is easy. It is consistent,” it is anything but. I can assure that if it is pouring with rain today, you can take 20% less than you expected. If it is blazing sunshine, exceptionally hot, you can take 20% more. The variances are enormous. When you are setting rotas, you cannot key in weather. It is easy if the weatherman says, “In January, we are definitely going to have snow at the weekend”, “Oh that is good. All over the country?’, “Definitely”. However, most of the time, unfortunately, the weather is very unpredictable. You not only have changes in the trade. You might, for example, have an England football kit launched; that can affect the trade. Again, it only affects the trade in certain parts of the country, because I can assure you in Scotland England football shirts do not sell very well. When you ask if I can do that, it is an art form being able to work each region out, then each area, then by the stores within that area. It is not an exact science.
Q215 Amanda Solloway: I do understand retail. Given that my understanding is that you have 20% of people on full-time working contracts and 80% on zero-hour contracts, would you not suggest that within that 80% there would be some of those people who could be transferred to full-time paid weekly contracts?
Mike Ashley: I would agree with that. I can absolutely sit here and say that some of our top people have come from zero-hour employment; literally our top people have come through that system. This is not part of my charter review—and this is where I talk too much and take on too much—but what you are saying to me is, “Why can we not look at reviewing that in retail? Why can we not look to getting that percentage higher and that percentage down?”
If we sit here in a year’s time and you say, “How have you done over the last year Mike?” and I say, “Five or six out of 10”, that is probably a good score in all reality. “Did you address Amanda’s issue of that?” I will say, “I have to be totally honest: I have not got to that one yet.” I cannot review and promise you I can take on anything. Would I think that is a reasonable thing that you are saying? Do I think that Sports Direct should be able to review that without me and at least make the easy first little step? I will turn around and say, “If we are all about people and we really care about people, why can we not have more full‑time people? Why do we have to have so many people on zero‑hour contracts? Why? Why? Is it because we are too lazy and cannot be bothered to manage it? Where is that culture going to take us? You are all here”—not you; I am now talking to the people at Sports Direct—“because of Sports Direct. So why can you not build on what built you?” That’s the idea. I have sympathy, but I am not sure what the right percentage is.
Q216 Amanda Solloway: Just a couple more questions, just briefly if I may? Just in terms of employee performance, my understanding is that you have spoken about secret shoppers, stock-taking, etc. How do you reward performance? I think I know the answer to this.
Mike Ashley: I hope it is a very heavily bonused culture. Now bonus is not just money; it can be holidays; it can be prizes. It can be whatever also gives the company a feeling of being a team. It is not just saying to somebody, “You have done this. You get that amount of pounds.” It could be organising events. They do loads and loads and loads of crazy stuff at Sports Direct. They might all want to go to the football game. They might want to do a day out. They might want to do loads and loads of things. Actually they do do loads and loads of things. You have to understand that that is a very small proportion. Those kinds of events and those people and that stuff, yes, we have it, but it does not touch that many people. What should touch people is the bonus structure with the money. That is what should touch people with things like the stocktake. Who then qualifies? Who then does not qualify? Why did not they qualify? If they all qualified, would they get a little less and they get a little bit, or in actual fact should the pot be bigger? If you included everybody, guess what? I bet you will find your performance is better. I bet that you will find that your pot increases naturally anyway.
Q217 Amanda Solloway: Just on that, how would you improve poor performance?
Mike Ashley: Everybody throughout life has periods where they are into dips. My view is to say, “If you honestly thought that was fair and you thought it was fair to be treated like that, you are getting quite close”. But remember when you are at a low point, and you are not your normal self, bouncing around on a Monday. Something has gone wrong in your life. It could be anything. It is at those points that you have to be careful that you are being fair with people, because they are not actually themselves. I have had periods in my life where I have not actually been on my game, if we can put it as easily as that. If you had judged me in that period of my life, you would throw out 30 years of where I maybe was nearer to being on my game.
Q218 Amanda Solloway: We have heard from a management training point of view, and I absolutely agree with you, but I wonder in what terms you encourage your managers to act in that way?
Mike Ashley: I definitely encourage my managers to act in that way. You talk about managers. If we talk about the head of retail, there are all her people that work for her and then there are all the regionals and then there are all the area managers. I really only talk to the people normally once a year, because that is the time I can get them altogether in Shirebrook in the auditorium. I sit there and say, just like I have said to you guys, “You ask me any question you want. Anything you want, I will answer.” There are certain caveats that I am not allowed to answer on financial questions or whatever. If they say, “What are we going to make this year?” or something like that, then I am not allowed to answer those, but besides that I answer any and every question put to me. We have a day at Newcastle, but that is not where I do the questions and answers, because that is a day where they play football and all the brands come, It is not a fun day; it is like a corporate day. We call it a Sports Direct day.
Q219 Chair: Mr Ashley, can I just mention this? You talk about valuing staff and there will be people on permanent contracts. Do you consider the agency workers your staff too?
Mike Ashley: Yes, I do, even though we do not directly employ them.
Q220 Chair: Why do you not?
Mike Ashley: Because agencies are experts in people. They are professionals of people. That is what they are supposed to do. The basic thing is if you go back 10 years—and basically this is where you would say that it is not acceptable, but it is a fact—we are in some ways a victim of our own success. What do I mean by that? Ten years ago, the web did not exist for Sports Direct. It was nothing. It was zero. It might have been taking £10,000 or something, but it was nothing. Sports Direct was built as a facility that was to supply stores. It was never built to supply an individual customer. If you come and it is Sunday night, I will not be there. If you want to walk around with me, if you come on a Monday lunchtime, you will find me there and we can go around and I can show you it. You have to go from a physical warehouse that picks strictly for stores. You imagine: I do not pick one pack of socks; I pick 36 packs of socks in one go. All of a sudden I have a system where customers order one. There is no automation. It is not there. It has not been put in. Is it coming? 100% it is coming, where you have conveyors and that sort of thing, but it is not in there yet. It actually arrives before Christmas. Now I need 10 times the amount of people that we previously needed.
Q221 Chair: Do you think you get a good deal from your agencies?
Mike Ashley: I am a little shocked, for example, at stuff such as the bottlenecks at security, to put it mildly. I do not think that that is even slightly acceptable.
Q222 Chair: Would you consider sorting this by directly employing workers?
Mike Ashley: Do I think we would have solved it? I can honestly, hand on heart, say, “No”. Unfortunately, it crept up on them. One minute it was okay, and that queue, as the web got busier, became two minutes, and that queue got busier, busier and busier again, and it became three minutes. They did not suddenly go, “Look, it is a tipping point. It has changed.” You have to pay them the minutes it is going to take. It is not their fault that they cannot get out. You have to pay them. It is a simple answer.
Q223 Chair: Mr Ashley, a quick question: you mentioned six months ago that you announced back pay in terms of the national minimum wage. Can you guarantee to the Committee that that is been paid?
Mike Ashley: Everything that I have said, I personally would like to guarantee. Have I actually checked it, looked at it, ticked the box, and seen the payments gone? Honestly, no.
Q224 Chair: Would you check and let us know?
Mike Ashley: No problem. Whatever I said, yes?
Chair: Yes.
Mike Ashley: Not what somebody else said or something like that, but what I said.
Q225 Chair: Is Sports Direct subject to an HMRC investigation?
Mike Ashley: Yes, it is.
Q226 Peter Kyle: Mike, thank you for coming to appear here. It really has been brilliant to have you here and it has been great to engage with you, because we get a sense of who you are and how you approach the work. We appreciate that and I certainly do. Getting a sense of your demeanour here today, would you describe yourself as a kind person?
Keith Bishop: I think I can answer that, really.
Q227 Peter Kyle: No, I do not want you to answer that, thanks. This is about him. I should also add that having seen how authentic you are as an individual, I do not think that you need to bring a PR person with you to events like this in the future, but anyway.
Mike Ashley: I would like to think I am kind to the right people. I would like to think that I am kind to the genuine people. That is not some waffley stuff. I do not think I am Santa Claus; honestly, I do not. I do not think you could be a Santa Claus and honestly say, “I did enough for the people on a Saturday night”.
Q228 Peter Kyle: Okay, let’s not talk about what kindness means, but it is very clear that some very unkind practices are happening in the business that you created and that you own. We have already heard that somebody in their written appraisal form had, “You come across as quite selfish as you always want to leave on time”. That is not a kind thing to do to an employee, is it?
Mike Ashley: I agree with you.
Q229 Peter Kyle: We had somebody else who gave evidence to us who gave pretty damning testimony of working in one of your shops, not being offered any contract, not even a zero-hours contract for many months on end, and they were bullied, pushed around in the workforce and were then summarily sacked with no explanation whatsoever. That is not kind, is it?
Mike Ashley: No, not only is that not kind; it is not acceptable. That should not go on, absolutely not, so let’s deal with it.
Q230 Peter Kyle: We heard from a woman who was told, and I quote, “If you want to get a contract, we can talk about it over dinner”. She also said that was not just one manager but several, and she said so and then broke down in tears. That is not kind, is it?
Mike Ashley: No, that is the total opposite of kind. That is some type of sexual predator that needs to be dealt with.
Q231 Peter Kyle: Do you accept that this is happening in your business, the business that you created, that is shaped in your image? This is happening in your business.
Mike Ashley: It should not. If it does, it 100% should not be going on. I do not know what I am going to be able to put in place to stop it, but at least I am going to try. You sit there and say those things to me. Honestly, they are repugnant; they are disgusting. What do you want me to say? Would you like it if you were me?
Q232 Peter Kyle: The point is that it is not happening in Sainsbury’s; it is happening in Sports Direct.
Mike Ashley: How do you know it is not happening in Sainsbury’s? Are you absolutely sure? You can sit here and say there is no sexual harassment happening in Sainsbury’s. I think there probably is. The question is: have Sainsbury’s got a better process to prevent it and do they have a better process for dealing with it when it does happen than Sports Direct? Sports Direct therefore has to pull its socks up. It is as simple as that, fellas.
Q233 Peter Kyle: You are accepting that this is happening.
Mike Ashley: You are telling me about it. It is the first time I am hearing about it. You have to understand that it is the first time I am hearing about it. Please, honestly, I am not going to do your 90-day thing; I am going to concentrate on this. Now you are going back six months. So I am going to write saying, “When Peter told me some of that stuff, I found it so offensive I really do not care about your thing. I am going to deal with what Peter said.”
Q234 Peter Kyle: Mike, it is great that you are being so candid, and it is great that you also want to take these issues very seriously, but the point that I am trying to make is that your personality is stamped through this organisation. Clearly, you are hurt and upset about the possibility that this might be happening in the organisation that you take responsibility for, but it is happening and the way that you have employed people, the management structure you have in place, the training that you have put in place for the managers, the fact that you have 200 permanent staff at Shirebrook and 2,000 who are temporary with a high churn rate on very low pay, and many of them are quite vulnerable people, some of whom have come from abroad—this is a culture that is ripe for exploitation.
Mike Ashley: We should not have it. I agree with you.
Q235 Peter Kyle: Are you now committing to do a review of the way you do business?
Mike Ashley: Guys, I am coming here today to listen. One of the reasons I agreed to come—whether or not I think I ought to or not is a different subject—is to make a difference.
Q236 Peter Kyle: Let me put this to you: you are somebody who has created an extraordinary company. You have created a lot of wealth; a lot of it has gone to you. You have created a lot of wealth. You have done something absolutely remarkable, but do you think your company has outgrown your ability to manage it?
Mike Ashley: Probably, a long time ago.
Q237 Peter Kyle: I realise I have set a tiny company up in the past, which has remained tiny, and I am an MP who nobody has ever heard of, talking to a titan of the business sector, but is it not time—your own analogy is that you woke up one day and your little business was an oil tanker—if you have gone from a dingy to an oil tanker, to get somebody who knows how to sail and drive an oil tanker?
Mike Ashley: Possibly. I can accept the criticism; some of the things you have said to me today would actually lead me to believe that it has definitely outgrown me. What you have said to me today shocks me.
Q238 Chair: This is really important, Mr Ashley. Can I push you on that? Because there have been questions over the corporate governance of Sports Direct. What we are getting today is a sense, exactly as Peter has said, that this has grown exponentially. You are frankly struggling to contain and control and also keep a handle on what is going on. How are you going to improve the corporate governance of Sports Direct?
Mike Ashley: Iain, I can only do my best and my best may not be good enough, as you say, but my best is all you can have.
Q239 Amanda Milling: From everything you have heard today, would you commit to reviewing and implementing a new management structure for the organisation, so that actually that load is spread and we will not be hearing those stories in 12 or 18 months’ time?
Mike Ashley: Why would I not? I am not going to do nothing when I hear stories like that. Would you, as a human being sat here, do nothing? Honestly, would you do nothing if you were me sat here?
Q240 Amanda Milling: There are two different things here. One is about procedures and processes, but one is actually about management and reviewing the management structure of the organisation.
Mike Ashley: Who am I going to easily get to do that that is going to guarantee that we are going to get a better outcome?
Q241 Kelly Tolhurst: Thank you for coming. It has been really interesting to listen to you today. One of the interesting things that I think you said earlier was that you said that you wanted to do better job for everyone who was in the Sports Direct family. I do not know if you used the word “family”.
Mike Ashley: Team, family, same thing.
Q242 Kelly Tolhurst: The team. I understand completely how organisations grow and things change really quickly and you have to work quickly, on the hoof, to try to carry on and grow. Going back to your staffing structure and the element of permanent workers versus temporary workers, do you think that has fundamentally been one of the reasons why your business has been so successful, because you have more temporary staff?
Mike Ashley: I would not have thought so, to be totally honest. It may have made a difference, but it will not have made a massive different. I would not have thought so. It may have made it more efficient, but that is about it.
Q243 Kelly Tolhurst: Do you also believe that, for you to continue to be successful as Sports Direct and to become more profitable and to become a greater organisation, that may not necessarily be the right model going forward.
Mike Ashley: Yes, I can accept that.
Q244 Kelly Tolhurst: Do you also accept that you have a responsibility as the leader of a large organisation like Sports Direct?
Mike Ashley: Yes, okay.
Q245 Kelly Tolhurst: One of the wider points I wanted to talk about today really was the impact on businesses growing with flexible workforces and actually how you see you being able to drive your business forward with putting different structures in. Surely, you have thought about that. We have heard a lot about allegations, but surely you have thought about how you are going to move your business forward as it is today?
Mike Ashley: If I can pick up on what Amanda said, when you have only 20% full‑time to 80% part‑time, you have to look at that and say, “That balance is wrong. We can improve on that balance.” You have to be able to then look at the 80% and say, “Why zero‑hours? If someone has been there a year, and they wanted to, why could not they voluntarily sign up to having at least 15 hours a week”, or whatever it is, and say after a year, “We still clearly want you to work because you are still here. You clearly want to work because you are still here’?
Why can you not then move that up? Why can there not be a two‑tier of zero‑hours where you start at this and then after a rolling year, you then say, “We are now able to guarantee you, for example, 80% of the hours you previously worked in the last year”? Or you could have a fixed one, maybe 20 hours. For somebody who, for example, has to pick the kids up from school, they should still know that they are going to get that four or five hours during the day. They should be able to do that at Sports Direct, in my opinion. It might make their rota-ing a bit more difficult. They might have a few issues with the weather, but plus or minus it should not move the dial for Sports Direct. You get better people because they know what they are doing because they have been there longer. You get efficiencies by people knowing the job.
Everyone thinks in retail it is easy. It is not easy in retail. It is not easy to do a stocktake. It is not easy to know the layout of the shoe stock room and every style and what people want and different types of running shoes and then you could be on football boots. It is easier to try to have more consistency throughout. That would also apply at the warehouse; it takes time. I describe it as a simple thing, but actually you get quicker at doing simple things. If you are picking and putting stuff in a cage and reading the sheet, you become very familiar with where everything works. You have a sense of how it works. When you see them working, they are more efficient—I am not being rude—than if we all tried to have a go. You watch how long it would take us to pick a cage. You would be surprised how slow we are. Is that an answer?
Q246 Kelly Tolhurst: That is great. I just wanted to say one other thing. We had your employment agencies sat in front of us earlier on, and when we asked about flexibility of being able to turn down work, we were told that if they did not accept assignments they might not work for that particular agency. After what you have heard today and going forward, would you take a commitment back that actually you would look at how you can maybe improve the permanent workforce within your organisation?
Mike Ashley: Again, why not? Why not? I ask you the question, “Why not?”
Q247 Kelly Tolhurst: Your agents were asked a direct question by Paul Blomfield, and they said—
Mike Ashley: My understanding is that we do take from the agencies and make them permanent. My understanding is they actually move on to more senior roles and they go on to the more office-side of the business. A lot of those people have been promoted through and are now quite senior in actually running Sports Direct. That is my understanding.
Q248 Chair: Mr Ashley, how many went from temporary agency work to permanent contracts, often in quite senior supervisory positions?
Mike Ashley: Over a period I would hope, literally—you are going to ask me what length the period is in a minute, and I do not know—it is in the hundreds.
Q249 Chair: Could you tell us? I would hope for more than “hope” on this. I would hope that somebody like yourself could give us a figure on that.
Mike Ashley: I cannot here now, because I am going to get the figure either wildly low or wildly high. My understanding is for us we look at that as a resource. We are able to then take the best of that resource—so people who get themselves recognised and up there—and we try to keep that resource and take them on. That is my understanding of what we are supposed to do.
Q250 Chair: I just want to ask you a direct question that I hinted at before. Will you pledge, as part of this fundamental review, to look at the use of agency workers and pledge to see whether it would be better for all concerned if you were directly employing them?
Mike Ashley: The right amount of them. Do you understand? Sports Direct cannot employ thousands of people directly from nothing. It cannot. That is the reason we use the professionals in the first place; you have to understand that. It is not easy. I do not sit there and do every interview. They are experts at what they do. They are professionals at what they do. What we have to make sure is the balance, like everything in life, is fair. If we have the balance to the unfair side, then they have as an industry. That is more the point.
Q251 Paul Blomfield: I wanted to pursue the same issue a little bit further, in terms of your employment model, if that is okay? You are a 24/7 business, 52 weeks a year, very successful with a constant flow of work. We heard from Transline that last year the people that they placed with you worked for 39 hours a week, which is a standard working week. You have described these as amazing, hardworking people, who generated all the wealth of the company. Why do you not give them a permanent contract?
Mike Ashley: Shirebrook is one site. What we then do is we say, ‘We cannot possibly do this in-house ourselves, so we need to go out to agencies”.
Q252 Paul Blomfield: Why can you not do it in-house? Hundreds of organisations do. Why can you not?
Mike Ashley: Hundreds of organisations do not do it.
Paul Blomfield: Yes, they do give permanent contracts, with respect.
Mike Ashley: No, with respect it would be amazingly difficult, nay impossible, to have grown as we have grown in the last 10 years and taken all the people directly on ourselves. I am telling you we could not have done it. I am being honest with you and I am saying that we could not have done it. It would have been physically impossible. No one could predict that internet growth. It came out of nowhere, literally nowhere, and it requires 10 times the people that retail does. The sensible thing to do is then to go out to professionals and say, “What is your expertise? You employ people. That is what your company does for a living. You must be very good at it and so must you and so must you. Okay, let’s take those people and get those people to do it.” You are going to say to me, any minute now, “But if you employed them direct, Mike, you would save money.” So why would I not employ them direct? Why would I pay the middle me? Because it would have been physically impossible for us to do it ourselves. They make money out of Sports Direct.
Q253 Paul Blomfield: What we are trying to do is to understand the culture of your organisation and how you manage growth. Lots of organisations have grown and given employees permanent contracts. Why is it so difficult for you?
Mike Ashley: I have given a lot of people permanent contracts. You are not being fair. Now you are not being fair. You are trying to twist what I am saying, and that is not fair; that is why I fear coming to things like this, because you are trying to put words in my mouth and you are trying to twist what I am saying. I am telling you that it was physically impossible over the last 10 years to have done what we have had to do at Shirebrook with that amount of people unless we went to external agencies who were professionals.
What you can criticise me for, and I will take it, is things like bottlenecks that have appeared that are unacceptable, and some of the things that you have talked about are unacceptable, and some of the things that Peter said are unbelievable. I can take those criticisms and I can deal with it, but I am not playing a word game with you where you try to twist the reality. Please do not, Paul, because this has so far been positive and now you are making it negative. Please.
Q254 Paul Blomfield: I was asking the question: what was special about Sports Direct that did not enable you to grow by offering permanent contracts that other companies would?
Mike Ashley: I have said that it was the internet. I have said that the internet growth was never ever envisaged 10 years ago. It is extremely, extremely labour-intensive. I am not being funny: do you want me to go through how labour-intensive an order is from when it gets on the computer screen, a sheet being printed, and how you get the orders together? How do you pick an order in a warehouse that size for one person? How? Think about it. It is not mechanised. How do you do it? You cannot send one person out to pick your order. They would come back an hour later. You cannot do it. It is impossible.
You have to accept the internet growth was a phenomenon that none of us could have allowed for. You have to accept—or I have to accept, not you, sorry—that Sports Direct has made some mistakes. You have to accept that as well. We have to look to the future. I have invited you guys to come anytime you want now. I have even offered to come back in a year if you really want me to, and let’s do some measures. I will not have them all right. It is impossible that I can get everything right. I am one human being. So stop it, Paul, please. Let’s keep this positive and let’s keep rolling forward.
Q255 Paul Blomfield: I am trying to ask honest and straightforward questions. Let me ask you another one. We talked to Transline earlier. They shared with us that the nature of the contracts that they offered have been discussed with your company because, obviously, you are giving them a big contract. People say one of the advantages of zero-hours contracts, which personally I do not see but it is argued in their defence, is that it gives flexibility; Transline employees working with you do not have the flexibility of turning down work that is offered. Is that reasonable?
Mike Ashley: If it is true, it is not reasonable, is it? Paul, you can answer your own question. If it is unreasonable, it should not be happening.
Q256 Paul Blomfield: So why did you agree that contract with Transline?
Mike Ashley: I do not look after every single thing that goes on at Sports Direct, Paul—please, please.
Q257 Paul Blomfield: Is this not fairly fundamental?
Mike Ashley: Do you know what is far more worrying? What Peter said. That bothers me a lot more than this. This is a process of growth and the growth has been too big, and you will take the odd pace backwards to go two paces forwards. It is impossible to be perfect. Paul, you are trying to pick on things and make out, “Obviously that is terrible, and this, and this”. Paul, some of that has been unavoidable and some of it has been avoidable. I want to concentrate on the stuff that should be avoidable. We have to be fair and balanced. Otherwise what happens is that I am going to clam up. I am going to go back to all my advisers and everybody else who said, “Give one-word answers. Do this. Do that. Do not do this. Do not discuss that. Do not broaden things.” No, I am not listening to what they say because I cannot be housetrained. That is what they say about me.
Keith Bishop: You have had no media training for this today.
Mike Ashley: No, I have had no media training. How do you media-train me?
Keith Bishop: It is impossible.
Mike Ashley: I am going to put my foot in my mouth and I am going to say what is in my heart and I am going to be honest. So, Paul, please be positive—please.
Paul Blomfield: I am trying to—
Mike Ashley: And I am trying to be.
Q258 Paul Blomfield: Could I just ask one last question? You say that you are not aware of the nature of your contracts.
Mike Ashley: Personally, no.
Q259 Paul Blomfield: However, you put the people that you employ at the very heart of your business and you say this is the most important thing to you.
Mike Ashley: Correct.
Q260 Paul Blomfield: Should you not be aware of the contracts under which they are employed?
Mike Ashley: All of the contracts, everywhere, with everybody, around the world?
Paul Blomfield: No, your subcontractors in Transline.
Mike Ashley: We have an enormous amount. We have a big division of people to absolutely look after the relationships with the agencies. I cannot actually be responsible for every single thing that goes on in Sports Direct. I cannot be, Paul. I cannot be. I cannot be. It cost us more because we pay the agency than if we took them on part-time. Therefore, you would think all round that standards would be higher, not lower. It is simple economics.
Q261 Paul Blomfield: Is this not a fundamental issue? Does it not go to the heart of the issue: that you have a duty of care to the people who have built your business?
Mike Ashley: I agree with you.
Q262 Paul Blomfield: Are you not therefore negligent in not fulfilling it, if you have no idea of the terms under which they are employed.
Mike Ashley: “No idea”. Okay, let’s use the words “no idea”. That is not fair.
Q263 Chair: Can we move on? We heard from the previous panel, from Andy Sweeney, who is the Chief Executive Officer of The Best Connection Employment Group. He said one of the reasons why people use agency workers—I am using his words directly—was slimmer overheads. Is it because you save costs that you choose to do this?
Mike Ashley: Slimmer overheads for whom?
Q264 Chair: Presumably for the parent business that is using those workers.
Mike Ashley: Slimmer overheads in the fact that we do not have to have so many people directly doing the interviews, taking them on, taking them on the books, and running them through the payroll and everything else. That is outweighed by the amount we have to pay the agency because the agency does all that and they will be more efficient, but their amount of profit that they will put on will out-weight those savings. If you are talking about net savings, I would say if we were physically capable of doing it, we would have saved money by doing it directly. I am not an accountant, but I can get somebody to look at that piece of work. If that is not the case, I will turn around to you in a year’s time, whenever it is, and say, “I was wrong. There actually is a net saving,” but I cannot imagine that it is, because it does not instinctively make sense to me.
Q265 Amanda Milling: Good afternoon, Mr Ashley. Can we just talk about these agencies a little bit more? How often do you review these relationships?
Mike Ashley: The problem is I am going to sound like I am repeating myself. There is a group of people at Sports Direct that are responsible for those agencies. How many times have they changed agencies over 10 years, six years, or the whole internet piece? The answer is that I do not know. I do not know how many agencies they look to on an annual basis, or every three years, to say, “Okay, we have two agencies. Who else is in the marketplace? Who else can do something different, whatever?” What is their process for reviewing agencies? I do not know, but I hope that there is one. Does that make sense?
Q266 Amanda Milling: Do you think that as part of your review it should perhaps be included that you should have some sight of the decision-making?
Mike Ashley: I think as part of my review it includes everything. That is why I said it will never end. It is all about getting them in priority order. I cannot just wave a magic wand and do it all in the morning. That is one of the reasons that I said I will do it and get on with it, because I can do some things in the morning. I can go down and visit the queue with the bottleneck, look at it and say, “Right, that is not going to happen again”. These other things are things where it can take literally months to put in processes. If I do that, the world does not change in the morning. It does not. Is that reasonable? Yes, I am prepared. We can make a huge list of everything that we have talked about today and they could all be part of an ongoing process. No problem. However, let’s be clear what the list is and let’s have reasonable expectations of what can be achieved. Let’s not just walk out of here and say, “Mike said; Mike said.’ That is not fair. Let’s come back with it and let’s list it. I think that is reasonable, no?
Q267 Amanda Milling: You said you delegated this decision-making. Do you have confidence in the agencies that you are using?
Mike Ashley: Yes, but, as I say, I have been disappointed with some of the stuff that I have discovered. For example, the queues were disappointing. Is that strictly the agency’s fault or is it more, on balance, Sports Direct’s fault? Whose fault are those queues? Are they the agencies’ or are they Sport Direct’s? Who is the person I sit down with and say, “I understand that it crept up on you, I understand that it got out of control, but, guys, who is the ultimate person responsible besides Mike Ashley who should have stopped that happening?”
Q268 Amanda Milling: Who is ultimately responsible?
Mike Ashley: Ultimately responsible—it is always me. It always, always ends up being me
Q269 Amanda Milling: In terms of a duty of care to your workforce, who has that duty of care?
Mike Ashley: Overall, the buck will always stop with me. I am the original founder of it. I am the guy who is responsible for its biggest failures and its biggest successes. That is me. It cannot be anybody else. That is why I put myself forward even if it may turn out that I am not capable enough and it has outgrown me. It is what it is.
Amanda Milling: Hence my question earlier about management.
Q270 Michelle Thomson: I have one last question. Again, thank you very much for coming along today. I would like to try to get one final commitment from you, if I could. In preparing for this session, I was very pleased to read quite a fulsome document by Unite, who had done a lot of work. Will you commit to meeting with them to hear about their concerns, and the data and intel that they have gathered—not just at the AGM, but to genuinely sit down and listen and hear what they have to say?
Mike Ashley: Could I suggest that we do it at the AGM? Can I suggest why? Because it is an open day and therefore reporters and everybody is there. I do not mind having a meeting with them for an hour, two hours or however long you think is appropriate, and they can do that stuff. What I do not want is to turn around and everybody make the meeting the event and not the reality of what goes on in it. I will stay until 5.00 in the morning on the day of the AGM. It is an open day. Everybody is welcome; anybody can come.
Q271 Michelle Thomson: When is the AGM?
Mike Ashley: September.
Q272 Michelle Thomson: That means you wait until September. You could actually commit to doing that in, say, the next month—your first initial meeting. They have a number of recommendations in this document that you can listen to and you can take on board in readiness for coming back after that.
Mike Ashley: The only caveat I would put—and I am prepared to do that—is the fact that if Unite are only there to further Unite, not to further the people at Sports Direct that I think I should have Sports Direct do a better job for, that is where that clash is going to be. There are people here who actually genuinely want to see things better for people at Sports Direct and in other companies and across the thing. I get that. If I am going to clash with Unite, and they try to use it as some media battleground, then I am not interested. I am just not.
Q273 Chair: Mr Ashley, a one-off meeting once a year is not preferable to ongoing engagement. Do you see the process is much more meaningful and productive in terms of that, rather than just, “I will meet after the AGM once a year”?
Mike Ashley: Okay, but how many times do you think I ought to meet them, honestly, and then be able to make a difference? You cannot just give me the work and it is all talk, talk, talk, talk, and it is all in the papers the next day: “Mike promised this. Mike promised that. He has not done this. He has not done that.” If, from a standing start—and I did say hello to them last September; I went down there and talked to them when they were sat at the front—I talk to them in September, I will be honest and say, “Look, of the 100 things you want me to do, let’s concentrate on these 10 to start with, and let’s make a difference. Let’s make a difference.” However, I am telling you that they will want to turn it into some media circus and showboat for Unite.
Q274 Chair: Is there a top six or a top 10 of recommendations that you could work with them and with us on, that would make a difference?
Mike Ashley: I would hope so. Why not?
Q275 Jonathan Reynolds: Mr Ashley, thank you very much. You have been very generous with your time and we appreciate the chance to put questions to you. There are just a few questions from me at the end of this. Just picking up on what you have actually just repeated, you have said to us twice now that you feel that you are better able to look after the welfare of your employees than, for instance, an independent trade union such as Unite. You have also been extremely candid with us, and you have acknowledged that people being forced to work extra hours unpaid is not reasonable; you have called into question why so many ambulances have been called into the warehouse; and I think you are completely in agreement with us that it is unconscionable that that there could be that kind of sexual harassment that we have heard about from managers towards female employees. Given your candour about that, in all reasonableness, how can you say that you feel you are better able to look after the welfare of your employees than an independent organisation representing them in the workplace?
Mike Ashley: Because, for me, I only have to look after one organisation. They have to look after it as an umbrella. We should be able to get that one organisation and make it better than the average. It is as simple as that. Why can we not do that with the same success that Sports Direct has had? If we fail, then we have to review it; it is as simple as that.
Q276 Jonathan Reynolds: You have compared the situation you are in and problems that we have heard about to the growing business being like oil tanker, and you have said that you have woken up on top of it. You have said you cannot be aware of every problem. That is a completely reasonable point. I want to put it to you, Mr Ashley, that, for instance, if your employees had independent workplace representation and if they had employment terms that gave them a fair opportunity to raise a grievance, not only would these problems not occur; they would not be able to occur.
Mike Ashley: A good point, Jonathan.
Q277 Jonathan Reynolds: My final question, Mr Ashley, is this: do you acknowledge, given how candid you have been today in your evidence, that there have been aspects of the business model of Sports Direct—the reliance on agency workers, zero‑hours‑contracted labour and aspects of the governance arrangements which you yourself have talked about—that have made some of your employees more vulnerable to exploitation?
Mike Ashley: To exploitation? You do not mean sexual exploitation, do you?
Jonathan Reynolds: To all types of exploitation.
Mike Ashley: I will accept that, when I went to look at things such as the bottlenecks, it was unacceptable. I accept that and that is why we have totally changed the process. I accept that there have been instances such as that that absolutely needed to be addressed and I hope have been and are being addressed. I also accept that there will always—always, always, always—be more work to do. It will never end. It will carry on long after I am in the grave, if Sports Direct is still going.
Q278 Chair: Mr Ashley, you have been very generous with your time and with your comments. I just have a number of brief questions to finish with. My first one is to reiterate that the theme that we are getting is that this company that you set up has grown quickly and, as a result, it is difficult to control. It is difficult to manage actively. So, as I have put to you before, do you pledge to look fundamentally at the corporate governance of the company, including looking at whether management at the senior level, Chief Executive and others, are appropriate to do this job?
Mike Ashley: You will say that I am subjective and I have known the people forever and they are my friends and everything else. You will say, “Mike, you are not subjective. We should appoint an independent review,” or whatever it is that you guys do, to say, “Okay. Why do not we do that then?” If that is a commitment, that is fine. You have said, “Mike you cannot be subjective. You were instrumental in building it. You probably have rose‑tinted glasses or something.” However, if you were to suggest an independent review, I have no problem with that.
I just wanted to see what was wrong myself first to see how much of it I could fix. I was getting on with it, yes, with the greatest of respect. I wanted to be allowed to just get on with it and then to come back and go, “Okay, we still have this to deal, but, look, we have dealt with this. We have dealt with this. We have made progress.” It is never enough when you are behind, is it? It is never enough. Because you have to catch up and then jump ahead all in one go. I have no problem with an independent review panel. What are the words you would use? I do not know what you call it.
Q279 Chair: You have been very generous and I hope that you think that we have given you the opportunity to be able to say exactly what you wanted to say. I just have two final questions, going off at a tangent somewhat.
Mike Ashley: They are not going to be football questions, are they?
Q280 Chair: I think I have been very good at not mentioning Newcastle United. You did not seem to be pleased by the reference to the tie at the start. We’ve got Sir Philip Green in front of us next week. Do you think Philip Green has done anything wrong?
Keith Bishop: I do not think you need to answer that question, really.
Q281 Chair: I was thinking as one retail titan to another, with great experience.
Keith Bishop: Honestly, I think it is an unfair question. We are not here to talk about Philip Green today. I think it is “no comment”.
Q282 Chair: Can I ask, then, Mr Ashley, did you want to buy BHS?
Keith Bishop: Again, I think it is unfair. I think it is a “no comment”.
Q283 Chair: Mr Ashley, thank you very much for your time.
Mike Ashley: I cannot resist it. 100% I wanted to buy BHS. Now I am going to get told off by everybody.
Q284 Chair: You wanted to buy BHS. Why was that stopped?
Mike Ashley: That is why I am not city-trained. That is why they say they cannot housetrain me. I just am that person. If you ask me something, I blurt out the answer. If you ask me another one, we will keep going. I absolutely believe for House of Fraser, Sports Direct could have done its Lillywhites sports floor; that is what I was interested in. Sports Direct still has 11% or 12% in it. The next logical step was Debenhams. Debenhams could have Sports Direct in it, because they have excess space and everything else. In actual fact, the most logical thing was always BHS and Sports Direct, because it can offer that extreme value that Sports Direct is known for and that is why I think it was a fit, because you could have had Sports Direct upstairs, BHS downstairs. You would have all the economies, and so you are able to give the customers better value. It is not that I am a saint; let’s be clear. If you are able to give the customers better value, you are able to buy better. If you are able to buy better, you are able to give them better value. In the end, you could have made that a successful business, in my opinion, but please do not ask me any more questions, because I am going to get shot.
Q285 Chair: Do you mind telling us at a future date?
Mike Ashley: I think you will probably discover a lot for yourselves at a future date, and it is a shame. I accept it.
Keith Bishop: Can I just say one thing?
Chair: Certainly, Mr Bishop.
Keith Bishop: The BBC has been misreporting that Best Connection has said that three people have been killed at Sports Direct. This is not true. Obviously, we just wanted to get that in the open.
Chair: Thank you. Mr Ashley, as I said, you have been very generous with your time and very generous with your comments. The Committee and myself are very, very grateful. Thank you.
Oral evidence: Working practices at Sports Direct, HC 219