Labour is to ask HMRC to investigate pay levels at Sports Direct, after expert analysis of a Guardian undercover investigation suggested the company could be paying below the minimum wage.
The move by Andy McDonald, the shadow secretary of state for employment rights, comes after the Guardian returned to the company’s warehouse in Shirebrook, Derbyshire, five years after a first undercover investigation exposed how workers at the site were being paid less than the national minimum wage.
McDonald said: “Mike Ashley [Sports Direct’s billionaire founder] said he wanted to be a good employer. Well, he needs to start behaving like one by ending the abuse and exploitation of Sports Direct staff. The stories that have come out of his Shirebrook operation are a litany of terrible employment practices.
“Sadly, the underpayment of the minimum wage is a widespread problem. Almost 1 million people received less than the legal level at the beginning of the last financial year. The government must end its complacency on the issue and step up its enforcement of the national minimum wage to give workers the dignity and respect they deserve.”
The latest minimum wage concerns at Sports Direct have emerged after the Guardian exposed in 2015 how the retailer was breaching minimum wage law at its warehouse, which resulted in workers receiving about £1m in back pay and Ashley being hauled in front of a parliamentary select committee.
On Thursday, the Guardian published a report having placed an undercover reporter inside the same facility during two weeks in late June and early July.
The reporter recorded how warehouse staff at the group, which has been rebranded as Frasers Group, were unable to leave the building during their 30-minute unpaid breaks – a practice some employment law experts say should count as paid working time and, if correct, would push Shirebrook’s, in effect, hourly wage rates below the legal minimum of £8.72 to about £8.20.
Frasers Group said: “The whole basis for [the Guardian’s] purported investigation is founded on a false premise – that a daily 30-minute rest break should be regarded as constituting working time and so paid. This is clearly not the case.”
The law says workers are entitled to spend rest breaks away from their workstation if they have one, and breaks do not generally count as working time and therefore do not have to be paid.
However, legal experts say that is only the case if a worker is able to spend the break how he or she wishes.
Zoe Lagadec, the principal at Mulberry’s employment law solicitors, told the Guardian: “If the workers are not able to use their unpaid rest break freely and for their own purposes, then this time should be deemed working time and should be paid. These workers cannot be said to have taken rest away from their place of work if they are prohibited from leaving the warehouse during their only break during the working day.
“Given that the workers are paid only three pence above the national minimum wage, this unpaid period of working time would breach the NMW regulations as the rate would fall below it for the whole relevant period.”
Frasers Group said its warehouse workers did not have to be paid for the breaks and that the business had “no rule preventing staff leaving the warehouse during a rest break”.
The Guardian’s undercover reporter asked three separate direct supervisors if he could leave the warehouse during his daily break. All three said this was impossible and that the break should be spent in a staff canteen or on the smoking terrace.
An HMRC spokesperson said: “Paying the national minimum wage is not optional – it is the law. Failing to pay workers the correct NMW can result in significant fines, being publicly named, and for the most serious offences, criminal prosecution.
“We will continue to target employers who flout the rules, ensuring workers receive the wages they are legally entitled to.”