Sports Direct and its staffing agencies paid workers £1m too little

Sports Direct and its employment agencies Best Connection and Transline have been named and shamed by the government for paying workers less than the legal minimum wage, underpaying them by nearly £1m.

The companies make up three of the top four underpayers in the latest list published by the Department for Business, Energy and Industrial Strategy (BEIS).

This list names 260 employers which failed to pay a record 16,000 workers a combined total of £1.7m.

Primark is the third biggest offender in value terms and the biggest in terms of number of staff, after it underpaid 9,735 workers by £230,000.

The cut-price clothing chain’s underpayment relates to a demand that all staff wear black clothing.

HM Revenue & Customs said this policy amounted to a uniform and a deduction from pay to cover the clothing took pay below the legal minimum. Primark has since introduced a more flexible policy and provides some clothing free.

A Primark spokesperson said: “The average amount paid back per employee was £23.75 and relates to a workwear policy that was changed in 2016.”

Primark said a small proportion of the underpayment also related to administration costs levied on pay packets linked to a duty to deduct money which the courts had ruled some employees owed, such as child maintenance.

The name and shame list also features several football clubs, including Bristol Rovers and Motherwell, and dozens of hairdressers.

But it is the hospitality industry which is the worst offender. Upmarket establishments such as the Bedruthan in Cornwall and Ramside Estates, which owns Hardwick Hall and Ramside Hall near Durham – where a luxury room can cost up to £149 a night – are among 45 hotels, bars and restaurants named for underpaying.

Scottish specialist windfarm contractor Edward Mackay underpaid four workers an average of £12,850 each – the biggest underpayment per head.

HMRC looked into Sports Direct and its employment agencies after a Guardian investigation exposed how Sports Direct workers were being paid less than the legal minimum.

A spokesperson for Sports Direct said: “This matter relates to the historical situation in our warehouse that was widely publicised in 2016, for which we apologised at the time.

“We cooperated fully with HMRC to make back payments to Sports Direct staff who were affected. We are committed to treating all our people with dignity and respect, and we pay above the national minimum wage.

“The company is committed to the national minimum wage and has apologised to the employees concerned. It has also reviewed its procedures in order to avoid this situation reoccurring.”

The list revealed that Best Connection has repaid £469,273 to 2,558 workers; Qualitycourse, trading as Transline, has repaid £310,302 to 1,421 workers; and Sports Direct has repaid £167,036.24 to 383 workers – amounting to £946,611 in total.

But it is clear that HMRC did not levy the biggest fine possible on Sports Direct – which would amount to double the wages owed, nearly £2m.


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