Sports Direct Derbyshire Staff Are Set To Receive Back Pay Of Around £1Million


The Law Of... paying staff fair wages

After Sports Direct admitted to not paying its workers the National Minimum Wage in June this year – and ultimately breaking the law – the business is now set to pay staff in its Derbyshire warehouse around £1million of back pay, according to trade union Unite.

Sports Direct's Derbyshire Staff Are Set To Receive Back Pay Of Around £1Million

Repaying What Staff Were Owed

In a deal made between Unite, the HMRC, and Sports Direct, around 200 workers employed by Sports Direct and roughly 3,000 workers employed through agencies could potentially receive up to £1,000 in payments each, back-dated to May 2012.

In addition to this payout, the discount sportswear chain and the agencies it used to recruit staff are also reportedly facing fines of around £2million from the Department for Business, Energy and Industrial Strategy, after it emerged that workers who were already on low pay were being grossly underpaid for around 4 years.

However, around 1,700 agency staff from the Transline Group might only receive half of the back pay that they are owed, as the company is refusing to pay any unpaid wages that stem from the period during which another agency, Blue Arrow, was previously in charge of a major Sports Direct contract.

Fighting For The Workers

According to The Guardian, Sports Direct and each of the agencies it employed will soon be contacted by the Department for Business, Energy and Industrial Strategy with regards to how much staff were underpaid, as well as what kind of fines each business will face.

Unite have described the case as a significant victory that emphasises the vital role that trade unions play in employment. They also expressed serious concerns over the behaviour of the agencies employed by Sports Direct and the threat they pose to the company's already "battered reputation".

Whilst the HMRC didn't comment on the specifics of the case, they reiterated that their role was to ensure that "workers receive what they are owed under the law".

Zee Hussain, Partner and Head of Corporate Services, comments on this case:

"Employers are required by law to pay entitled workers the national minimum wage. The rate is determined by the workers' ages and factors such as whether they are apprentices. If the HMRC discovers that an employer has been underpaying its staff, as they did in this case, they can take the employer to court. The HMRC also has the power to investigate complaints of under-payment, and issue notices of arrears and financial penalties to employers for non-compliance."

"This has been an expensive lesson for Sports Direct, both financially and in terms of the impact on its reputation. The exercise of retrospectively determining how much each employee is owed will also inevitably be time-consuming and costly on top of the shortfall they will ultimately have after making payments to those affected."

"Sports Direct’s case illustrates the government's approach, ability to intervene, and ultimately demand for corrective action. Employers must tread carefully to ensure they are paying workers the correct rate of pay in all instances and if in doubt they should seek professional advice at the earliest opportunity."

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