At its annual general meeting (AGM) last week retailer Sports Direct faced tough questions about practices in regards to its employees, including the use of zero-hour contracts and legal action related to bonus schemes.
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Zero-hour contracts, which are used by a number of firms, are controversial and have been described as exploitative. Sports Direct has an estimated 20,000 workers in the UK employed on this type of contract, representing a significant portion of the 125,000 UK workers that have no guaranteed hours.
The company is now facing legal action from employees who were excluded from a bonus scheme because they were on zero-hour contracts. In 2013 the bonus scheme paid out £160 million in shares to permanent staff.
Responsible investment campaign ShareAction used the company’s AGM to draw attention to the issues and argues that responsible investors will want Sports Direct to move on from the “unpleasant practice” of zero hour contracts before changes catch up with them.
Louise Rouse, director of engagement at ShareAction, commented, “Sports Direct showed a disregard for shareholder concerns at its AGM by brushing off questions – even those on subjects not involving court cases. To suggest a company cannot discus anything at all about employees with shareholders is frankly unacceptable.
“The zero hour contract controversy is going to continue to follow Sports Direct and the company is simply going to have to move beyond ‘no comment’ if it wants to stem criticism.”
She added, ”Sports Direct basically ignored their shareholder at the company AGM and failed to address the key controversy facing the company – the alleged use of zero hour contract – on the basis of ‘legal advice’.”
Photo: Martin Pettitt via Flickr