Whistleblower concerns put to Sport Direct's Mike Ashley

14 September 2017

The Work and Pensions and BEIS Committees have today written to Mike Ashley, Chief Executive of Sports Direct, with further concerns about working practices.

Whistleblower reveals underpayment practices

The Committees received information from a whistleblower, a Hermes courier, that Sports Direct and Hermes are under-paying couriers for some deliveries. The two committees understand the delivery company pays two rates for delivery: one rate for a "packet", a small, light item weighing under a kilogram, and another, higher rate for heavier "parcels".

The whistleblower has revealed the practice of sending  larger, heavier goods as "packets" so the courier only gets paid the lower rate, stating that Sports Direct is "the most persistent company for this, (they) almost always send parcels through as "packets"'. Recent examples include a bicycle and a packet that weighed over 10kg sent as packets.

The Committees ask a series of detailed questions about the way items are sent for delivery, designed to elicit the true picture of this practice. It appears from Hermes’ website that delivering an item over 10kg as a "packet" makes a very significant difference: £3.29 instead of £10.49.

A copy of the letter has also been sent to Hermes.

Committees' work into modern working practices continues

The Committees have previously taken evidence from workers in the "gig economy" raising deep concerns about the lack of basic employee rights and protections, including the failure to pay workers the National Living Wage.

The Committees are set to take evidence from Matthew Taylor on the Taylor Review of Modern Working Practices on Wednesday 11 October.

Chairs' comments

Frank Field MP, Chair of the Work & Pensions Committee, said:

"In the last Parliament we heard egregious examples of companies using an essentially bogus classification of self-employment to shirk their responsibilities to those who work for them. However, they were simply exploiting loopholes in the law, which we hope to see rectified in this Parliament.  If this complaint stands up, it represents a new low in actually deliberately under-paying workers for the work they do. We look forward to a speedy response and if there is merit in these claims, an immediate change in working practices and proper compensation for workers who have been subjected to this."

Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy Committee, said: 

"On the face of it, this appears to be a stitch-up between Hermes and Sports Direct to short-change low paid couriers in order to boost company profits. It’s deeply concerning to hear reports that the paying of couriers at an artificially low rate could be a persistent practice in arrangements between these two companies. If we can't rely on company boards and shareholders to stop these sorts of unethical practices, then tougher enforcement measures will need to be considered by the Government and Parliament."

Further information

Image: PA

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