Mike Ashley admits 'some issues' at Sports Direct - and discusses zero-hour contracts and BHS bid in MP grilling

Picture by PA.

Picture by PA.

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Sports Direct boss Mike Ashley has admitted that he paid workers below the minimum wage, also telling MPs that he has discovered "issues" with working practices at the retailer as part of an internal review.

Mr Ashley told the Business, Innovation and Skills Committee, chaired by Hartlepool MP Iain Wright: "I've discovered some issues and I've hopefully addressed some of those issues. Bottlenecks at security are the main issue."

MPs are investigating working practices at Sports Direct's Shirebrook warehouse, including poor working conditions, security staff searching employees, the use of controversial zero-hours contracts and paying less than the minimum wage.

Mr Ashley described the review as a "work in progress".

Mr Ashley, sitting alongside public relations adviser Keith Bishop, was asked if employees were effectively paid less than the minimum wage, and answered: "On that specific point, for that specific bit of time, yes."

When asked whether it would be better if an independent organisation carried out a review of working conditions at Shirebrook, he said: "I can agree that in some ways I am not the right person because I am not an expert on every area of employment, obviously."

He added: "It is not what I do for a living."

He said he only spoke to the trade unions when they had the option to ask questions at the company's AGM, which is held once a year.

Mr Ashley said Sports Direct can do a better job than the Unite union when it came to looking after workers.

When asked if that was a view shared by the employees, he said: "I would hope so."

Responding to concerns over health and safety, Mr Ashley said it was excessive that 110 ambulances were called to the warehouse between January 1 2013 and April 19 this year.

He said: "Let us assume that every single call-out was needed. How are people getting injured at Sports Direct? You cannot have that number of serious incidents - it is impossible."

He added: "I was told that we were over-quick to pick up the phone for the ambulance service."

Mr Ashley also said it was unfair that employees are docked pay for being one minute late.

The tycoon pledged to implement a number of changes to working practices within 90 days, promising to write to MPs if the time frame needs to be extended.

"You're pushing against an open door," Mr Ashley said.

Zero-hour contracts

On zero-hour contracts, Mr Ashley said his review had not covered that side of the business yet, but added that he agrees that some staff should be transferred to full-time contracts.

"Some of our top people have come from zero-contract employment," he said.

However, he admitted that the 20% full-time and 80% part-time split of Sports Direct's workforce is the wrong balance.

When it was put to him that some female employees had endured sexual harassment, Mr Ashley described the managers as "sexual predators" who need to be "dealt with".

"It 100% should not be going on. They're repugnant, they're disgusting."

Mr Ashley agreed that Sports Direct had become too big for him alone to manage and vowed to review the firm's corporate governance structure.

"I'm not going to do nothing when I hear stories like this," he said.

Defending the use of employment agencies, Mr Ashley said it was "physically impossible" to grow as fast as Sports Direct has without them.

He said the agencies were employed by Sports Direct because they are "experts in people".

But asked whether he was getting a good deal from them, he said he was "shocked" by the bottlenecks in security.

"To put it mildly, I don't think that it is acceptable," he said.

The billionaire claimed he "can't look after every single thing" that goes on at the company but admitted: "I'm the guy who's responsible for its biggest successes and biggest failures, that's me."

BHS

Mr Ashley also revealed that he had hoped to buy BHS, prior to its collapse last week.

"One hundred percent I wanted to buy BHS. It's a logical fit with Sports Direct because of the extreme value that Sports Direct is known for.

"I'm not a saint, but you could have made a success of that business."

However, he refused to answer questions on Sir Philip Green, who will be grilled by MPs next week over the demise of the department store chain.

Mr Ashley also appeared to agree to an independent review of his company's corporate governance structure.

Earlier, MPs heard from the Unite union that Sports Direct is in talks with HMRC over back pay for staff who were paid less than the minimum wage.

Mr Ashley himself revealed that HMRC is investigating the firm over wages.

Luke Primarolo, regional officer of Unite, also told MPs that a "culture of fear" pervaded at the warehouse, claiming that one Sports Direct employee was forced to give birth in a toilet.

The union warned of a "race to the bottom" in working practices, adding abuses were a real "danger to the economy".

Steve Turner, assistant general secretary of Unite, said conditions at the retail giant's warehouse in Derbyshire were more like a "workhouse" or "gulag".

Representatives from Transline and The Best Connection, employment agencies hired by Sports Direct to manage the warehouse and its staff, denied Unite's allegations, saying they "wholly misrepresent" conditions.