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CEO'S BLOG

It wasn't me, guv! - 11th Jun 2016

As the old saying goes, fish rots from the head. Yet, this was not what seemed to be the case at Sports Direct, if you believe Mike Ashley, executive deputy chairman and founder, who sat before the Business, Innovation and Skills parliamentary select committee on June 7th, where he faced questions about labour practices at the Sports Direct warehouse in Shirebrook, also known as ‘the Gulag’.

Ashley brought his PR advisor along with him.  The latter was told not to speak as they were expecting to talk to Ashley directly. But the fact was that Ashley was perfectly able to manage his own PR, whilst purporting to be someone who just says it as it is. “I will tell you anything” he said at one point, playing the no-nonsense, self-made man. Amazingly, he also claimed to care about the people. “Sports Direct culture is its people, finish!” Perhaps, he really believes this, which makes it especially convincing.

But his high regard for the people might come as a surprise to those workers at Shirebrook who were paid below minimum wage, were not trusted to leave the warehouse without a lengthy security check, could be sacked after a set of strikes against  them (such as for being in the toilet too long or for excessive chatting). UNITE union and The Guardian have both investigated and exposed the shocking labour practices at the warehouse and by Ashley’s own admission, it was only because of the media attention (with its negative impact on share price) that he decided to organise a review into some of these practices.  

Ashley insisted that there was no problem in him being the person conducting the review. He was better placed, he said, to understand the people and their needs because obviously he cared so much. He also claimed that he did not know that most of these things were going on. The organisation was too big. It had grown from an “inflatable” to an “oil tanker” and he couldn’t be expected to know everything that happened. But, he said, when something seemed unfair he would deal with it and acknowledged that the long queue and wait to be checked out by security was unacceptable. He was also asked about the process where workers who were one minute late had their pay docked by 15 minutes. Was that policy? He replied: “I honestly don’t know…when it started. It definitely wasn’t a policy I put in because I actually don’t believe it’s fair.”

The committee asked him about the allegations that people were so scared of being sacked for taking time off due to illness or for medical reasons, that they came into work anyway. There was one account of a woman who gave birth in the toilet having come to work anyway that day. There had been 110 ambulances called to the warehouse during 2013-2016. Ashley acknowledged this was unacceptable but added that some accounts he had seen suggested that people had been “over quick” in calling for an ambulance.

Labour MP Peter Kyle did try to pin Ashley down. “Your personality is stamped through this organisation”, adding later that the culture was one that was “ripe for exploitation.” He then seemed to take responsibility away from Ashley and asked him if it had just grown too big for him to manage, to which he agreed: “Probably, a long time ago.”

The majority of workers at Sports Direct are on zero hours’ contracts. Being challenged on this issue seemed to ruffle Ashley's feathers the most. Sheffield Central Labour MP Paul Blomfield said that given how much he valued his people, why then didn't he give more of them permanent contracts? Less able to control his temper, he told Blomfield to stop being so negative, that he was trying to twist what he had said. He said he could not have grown the business so fast without using zero hours’ workers, employed through agencies. “It would have been naïve, impossible to have grown as we have over the last 10 years and taken on the people…I’m telling you we couldn’t have done it.” This is really an ethical question. You can choose to employ people yourself and not use agency workers or contracts that deny people job security.  Perhaps you would not grow as fast, but growth for its own sake is not the only goal of business, or at least there was once a time when people thought so. But such an idea was not in the minds of anyone in that committee room. The goal of growth seemed to justify the means.

Not surprisingly, Ashley showed little interest in working with the trade union UNITE. He was happy to talk to them once a year at the AGM. Labour Co-operative MP Jonathan Reynolds said that if the company did allow for independent workplace representatives and for grievances to be aired in that way, the sort of problems they were discussing would not arise in the first place. Smiling, having realised he had successfully withstood the parliamentary questioning, he replied: “Good point!”

maurice mendoza

It wasn't me, guv!
11th June 2016

Circular Economy at Davos
29th January 2013