British billionaire Mike Ashley just took an unprecedented step in trying to resolve political and public anger over alleged unfair unemployment practices and pay at his bargain sportswear retailer Sports Direct — he is giving them a pay rise and it’s going to cost the company £10 million ($ 14.8 million).
Sports Direct confirmed the change in a two-sentence regulatory statement.
It said Sports Direct “has made a commitment that its directly employed UK employees and directly engaged casual workers will be paid above the National Minimum Wage from 1st January 2016.”
However it did not say what the new wage bracket would be.
Sports Direct, which is worth £3.4 billion ($ 5 billion), has been the subject of a series of media investigations that allege employees at company’s head office and in warehouses across the UK, are being subjected to unfair employment practices.
One of the biggest criticisms from the investigations is that Sports Direct allegedly searched its staff, which takes up time, and it led to workers to only be paid £6.50 ($ 9.90) per hour, which is below the statutory minimum wage of £6.70 ($ 10.20). This in turn allegedly saved Sports Direct hundreds of millions of pounds per year.
Earlier this month, a source told Business Insider that Sports Direct always paid the minimum wage and said that reports that searches of staff, as detailed by The Guardian in this video, took 15 minutes were wrong.
Sports Direct’s owner Mike Ashley, who is personally worth £3.7 billion ($ 5.5 billion) and has been described as a “monster” by MPs, — is currently leading a review “personally” into allegations of staff mistreatment.
Sports Direct recently released a 1,300 word statement denying that it has done anything wrong, but also announcing a review, which will look into the company’s practices regarding the agency workers it employs in its factories.
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