The owner of Sports Direct has confirmed that two-thirds of its retail workforce remain on zero-hours contracts ahead of new legislation designed to limit their use.
Frasers Group told MPs who are examining plans to strengthen protection for employees that 11,500 staff were on the contracts, which do not guarantee any weekly working shifts, and did not receive compensation even if shifts were changed at the last minute.
MPs on parliament’s business and trade select committee also heard that three-quarters (4,000) of the 5,200 people employed at the group’s main warehouse in Derbyshire are agency workers who can be let go without notice, more than eight years after the company promised MPs it would move them on to permanent contracts.
The testimony came from Andy Brown, chief people officer at Frasers Group – which owns House of Fraser, the luxury streetwear chain Flannels, Evans Cycles and Sports Direct. He admitted the pace of change was “certainly not fast”, with an average 200 people a year shifting from agency to permanent contracts over the past three years.
The high number of staff on zero-hours contracts emerged almost a decade after Sports Direct’s owner pledged to cut their use in response to criticism from MPs, although it later backtracked. In 2016, the retail group had 90% of its retail workforce with no guaranteed hours, prompting MPs to accuse its boss and lead shareholder, Mike Ashley, of running “a Victorian workhouse”.
Labour had pledged to ban the contracts, but its employment rights bill instead includes a right to guaranteed hours based on a worker’s shifts over a three-month period.
Brown said Frasers now tried to offer those on zero-hours contracts at least 12 hours a week and, in the past year, had offered an average 16 hours a week to those workers as technology enabled better planning. He said managers were able to give a month’s notice of potential shifts and were asked to give at least two weeks but could give less without compensation.
Frasers agreed with the “principles of protection for those on low or zero-hours” contracts, Brown told the hearing, and had tried to improve conditions for these important members of its workforce. “We don’t see a benefit if those on zero-hours contracts are dissatisfied,” he added.
However, Gregor Poynton, a Labour MP, said many businesses already offer compensation to workers for last-minute changes to their shifts telling Frasers: “You could do that but you choose not to.”
He asked Brown to imagine seeing a last-minute loss of working hours when he had put childcare in place, asking: “Could you manage your family finances on that basis?”
Antonia Bance, another MP, said she had evidence that numerous people had “worked a decade plus on agency contracts” at the warehouse in Shirebrook, Derbyshire. She asked Brown whether the company did this to “minimise your liabilities”.
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Brown said he did not know if agency workers had been in place for such time periods, but he said conditions in the warehouse had improved since 2016. He said no ambulances were called to the facility last year, staff were now able to take breaks outside the grounds and bottlenecks around bag searches had been dealt with so that staff were not waiting around without being paid.
Paddy Lillis, the general secretary of the shopworkers union USDAW, told MPs the employment rights bill was “going to be transformational for millions of workers across the UK”.
He said: “If you are a retail worker and on a no or low-hours contract and not knowing from one week to the next what your hours are going to be, you can’t get a mortgage, you can’t rent, you can’t get a loan.” Lillis said such problems led to “insecurity and mental health issues” which should not be part of a modern economy.
However, he expressed concern about potential loopholes which would enable “unscrupulous employers” to circumvent the protection for workers, such as using agency staff, setting unrealistic timescales for judging regular hours worked or regularly asking people to work way more than the hours in their contract.
