Sarah Butler 

Sports Direct staff ‘who took maternity leave put on zero-hours contracts’

Papers filed with high court over workers’ exclusion from bonus scheme reveal potential breaches of employment law
  
  

Sports Direct
Sports Direct’s warehouse at its headquarters in Shirebrook, Derbyshire. Photograph: Joe Giddens/PA

Sports Direct workers returning from maternity leave say they were moved on to zero-hours contracts excluding them from a generous bonus scheme, it has emerged in court documents.

Papers filed at the high court and seen by the Guardian also claim the retailer has imposed zero-hours contracts on store workers who had transferred from a company it had bought – in breach of employment regulations.

New evidence of Sports Direct’s poor treatment of its staff has emerged in the detail of a £7.5m claim for breach of contract by nearly 200 zero-hours store staff, who missed out on company bonus schemes that more than quadrupled the annual salary of some of those who benefited.

About 2,000 workers shared in payouts in 2012 and 2013 and more workers benefited from a 2011 scheme last year, but more than 10 times that number missed out, mainly because they were on zero-hours contracts and so not classed as permanent members of staff .

The chain founded by the Newcastle United owner, Mike Ashley, is attempting to have the high court claim, first reported by the Guardian in 2014, thrown out despite promises to MPs that he was personally leading a review that would improve the firm’s heavily criticised treatment of workers.

Ashley has said he wants to make Sports Direct “the best high street retail employer after John Lewis”, the retail group owned by its staff.

He appeared before a parliamentary committee in June and admitted his company had broken the law by failing to pay staff at its warehouse in Shirebrook the national minimum wage. The admission confirmed the findings of undercover Guardian reporters.

HMRC is investigating Sports Direct over its non-payment of the minimum wage at its warehouse and stores.

The company has also been widely criticised for employing about 80% of its staff on zero-hours contracts, which do not guarantee a minimum number of working hours a week.

A group of 188 current and former shop staff are involved in the claim for breach of contract after being excluded from a bonus scheme that paid out £160m in shares to 2,000 permanent workers in 2013. Some also say they missed out on a second bonus scheme, which launched in 2011 and paid out a first tranche of shares last year. It will pay out a second tranche in 2017.

Two groups of women involved in the legal action, led by lawyers at Leigh Day, say they were excluded from a bonus after taking maternity leave – some because they were moved onto zero-hours contracts after requesting part-time work.

Another group of store staff involved in the legal action claim they were moved on to zero-hours contracts when Sports Direct took over the company they worked for. Their contracts with their previous employers providedguaranteed hours and under the 1981 Transfer of Undertakings (Protection of Employment) (TUPE) regulations should not have been altered, according to the claim. “Albeit they accepted such contracts, they had no choice,” it says.

David Martyn, an employment expert at the legal firm Thompsons, said: “Whatever your contractual rights at the point of TUPE transfer, they must be respected by a new employer. It would be highly unusual that moving people to zero-hours contracts would be lawful.”

He also said employment law protected the right of women returning from maternity leave to come back to an equivalent post to the one they left.

The high court claim reveals potential breaches of employment law at Sports Direct, but it focuses on the workers’ exclusion from the retailer’s bonus scheme.

Most of those involved in the claim missed out on a bonus because they were on zero-hours contracts, despite having worked an average nine years each for the company. One had served 22 years.

Although they had no guaranteed hours under their contracts , the claimants typically worked regular shifts and a number worked full time, between 39 and 50 hours a week.

Some had responsible roles as supervisors, training other staff or were key holders who opened and closed stores, according to the documents.

Lawyers acting for the workers say their regular hours and long service put them on a par with those Sports Direct classed as permanent staff, and that they should not have been discriminated against in the award of the bonus.

“They were no less hardworking or loyal, or other than key to the group’s success, or less deserving of motivation or of a share in the group’s success as a result of their contributions,” the claim says.

Despite their commitment and contribution to the success of the company, the workers were treated as “second-class workers rather than valued employees”, it states.

Sports Direct did not respond to a request for comment.


 

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