Sports Direct Revisited

In our last month’s newsletter, you might remember we discussed Sports Direct’s failings as reported by a paper published by the Department of Business, Innovation and Skills.

Following on from that, this month, the Unite union has revealed that workers at Sports Direct’s Derbyshire warehouse will receive back-pay (dating back to May 2012) totalling approximately £1million. Unite have said that the payments could be worth up to £1,000 for certain workers.

The payments reflect previous failures to pay the National Minimum Wage. The National Minimum Wage is a legal requirement and the rates change every October.  If an employee has not been paid the minimum wage they can complain to their employer as well as submit a complaint to HMRC. If HMRC discover that an employer has not complied with the National Minimum Wage requirements they will send a notice for the amount unpaid together with a fine.

Where employers pay only at the minimum wage rate, it is crucial that all working time is accounted for. If any working time is not recorded (and therefore not paid) employees will inevitably receive less than the minimum wage. In this particular case time employees spent being searched at the end of the day (which under the legislation should have been counted as working time) was unpaid.

In order to avoid costly payments, not to mention the bad publicity, having robust procedures in place to ensure compliance with the National Minimum Wage is crucial for employers. The government is taking a tough approach against non-compliance and recently announced further measures to improve compliance by increasing financial penalties for those who have failed to comply with the legal requirement, from 100% to 200% of the arrears employers owe.

Dominic Bonham