Warehouse workers at Sports Direct, the retail chain controlled by the billionaire Mike Ashley, appear to be receiving pay below the national minimum wage, according to expert analysis by the Guardian.
The Guardian placed an undercover reporter inside the same Shirebrook, Derbyshire, warehouse during two weeks in late June and early July, where an estimated 3,000-4,000 workers distribute goods for Frasers Group, the holding company that also includes retailers such as Flannels, Jack Wills and USC.
The reporter recorded how warehouse staff at the group were unable to leave the building during their 30-minute unpaid breaks – a practice some employment law experts say should count as paid working time and, if correct, would push Shirebrook’s effective hourly wage rates below the legal minimum of £8.72 to about £8.20.
The Guardian’s undercover reporter asked three separate direct supervisors if he could leave the warehouse during his daily break. All three said this was impossible and that the break should be spent in a staff canteen or on the smoking terrace.
One said: “It’s not possible. Only in an emergency. There is no security to search you at the door to allow you out. Think about it, if all 2,000 on a shift left we might not get them back.”
The law says workers are entitled to spend rest breaks away from their workstation if they have one, and breaks do not generally count as working time and therefore do not have to be paid under national minimum wage law. However, legal experts say that is only the case if a worker is able to spend the break how he or she wishes.
Zoe Lagadec, principal at Mulberry’s employment law solicitors, said: “If the workers are not able to use their unpaid rest break freely and for their own purposes, then this time should be deemed working time and should be paid. These workers cannot be said to have taken rest away from their place of work if they are prohibited from leaving the warehouse during their only break during the working day. Given that the workers are paid only three pence above the national minimum wage, this unpaid period of working time would breach the NMW regulations as the rate would fall below it for the whole relevant period.”
Another minimum wage expert, who has experience of HM Revenue & Customs investigations, said: “I have been involved in many inquiries where HMRC’s interpretation is that if you are not free to do what and go where you wish during your break then it will be counted as working time. In your example at Sports Direct a daily 30-minute unpaid break would result in a minimum wage breach.”