But as an employer, being unaware of legal risks and unlawful practices within your business and/or being out of your depth, is no defence.
You could say that there’s much to admire about what Mike Ashley has achieved.
He founded and rapidly grew a very successful retail business; that success being all the more commendable given that SportsDirect was expanding at a time when much of the high street was stagnating and struggling.
He’s candid and no-nonsense and clearly has vision and drive.
So as a well-grounded entrepreneur with ambition and apparently good intentions, it’s sad to see the press coverage on SportsDirect recently. (It’s been well-reported and the article linked below summarises it again, so I’m not going to repeat the facts here.)
However, there’s no denying the fact that the employment practices for which SportsDirect has been criticised are not acceptable.
It’s quite conceivable that Ashley personally didn’t set out to break the law or to treat SportsDirect employees unlawfully. He admitted last week, under intense public scrutiny by the Business Select Committee, that he didn’t have a tight enough control on what was happening with his staff in the burgeoning number of SportsDirect outlets, and that the business had perhaps grown too big for someone of his level of experience and expertise to be able to handle effectively.
Lack of intention, experience and/or lack of personal knowledge by a founder/CEO about employment practices and employee behaviour within their business are not valid defences to the findings and criticisms recently made against Ashley and SportsDirect. The Business Select Committee were largely unsympathetic, as you’d expect them to be with any employer similarly accused of the same things. Events this week concluded with Ashley conceding that various practices for which SportsDirect has been criticised were indeed unlawful.
We’re not about to defend Ashley. Our purpose is to guide employers who may be concerned about having a handle on all of their business activities, policies and practices, including those relating to their workers. There are lessons that can be learned from what’s happened at SportsDirect, especially since some new angles were explored during the events. We’ve highlighted the key ones here:
1 It is not enough to just have wage rates which appear to meet the minimum. The wage rates need to be considered in the context of your working practices and so you can be sure that you do comply with the minimum wage legislation.
2 Making a deduction from pay in response to an Employee’s conduct which is more than you as the Employer have lost from that conduct is going to be unfair even if the Employee agreed to it in the contract of employment.
3 Staff groups need to be treated equally in accordance with a fair equal opportunities policy and the Equality Act.
4 Examine the working working practices on the ground. There may be unintended consequences from employment practices which are not operating as they should be such as the security checks at Sports Direct which were inadvertently detaining some employees at work and/or the strikes and you are out approach to agency workers.
It would perhaps be worth adding a final item to this list: where you’re running a business of the size where you can’t always have visibility over practices on the ground and worker behaviour on the ground, make sure you recruit experienced personnel who you can trust to be your eyes, your ears and your enforcers of lawful conduct within your business.
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Mike Ashley admits Sports Direct minimum-wage breaches 07 June Mike Ashley has admitted for the first time that staff at Sports Direct's warehouse in Shirebrook, Derbyshire have been effectively paid less than the minimum wage. In what The Guardian describes as a "major concession" that "should mean sanctions from HMRC", the businessman acknowledged that search procedures conducted after shifts are finished and when workers were not being paid meant pay did not always meet the statutory minimum. By law, a company must ensure that workers are paid the national minimum wage - £6.70 per hour, or £7.20 for those over 25 - on average for each hour they are obliged to be on work premises.