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Sports Direct to scrap zero-hours contracts for casual retail staff

Sports Direct will ensure warehouse staff are paid above the National Minimum Wage Credit: PA

Sports Direct has said that it will offer casual retail staff guaranteed hours instead of zero-hours contracts.

The company also said it will ensure all warehouse staff are paid above the National Minimum Wage following a review into working practices.

The changes come after owner Mike Ashley faced intense pressure over conditions for staff at the company's warehouse in Shirebrook, Derbyshire.

He has admitted that staff were illegally paid less then the minimum wage as a result of unpaid searches at the end of shifts and was accused of overseeing conditions like a "Victorian workhouse" by MPs.

The retailer will now offer its directly-employed casual retail employees the option of either a zero-hours contract or a permanent contract with a "guaranteed number of minimum hours".

It will also suspend its "six strikes and you're out" disciplinary procedure and pledged to pay warehouse staff above the National Minimum Wage.

Unite union said that workers lived in constant fear of losing their jobs, and faced disciplinary action for "excessive" talking or spending too long in the toilet.

The union said workers had likened conditions to a "gulag" or "labour camp", with one woman giving birth in the toilet and other female staff making claims of sexual harassment.

A report by professional services firm RPC has since found "serious shortcomings" at the company's warehouse in Shirebrook.

In response, Sports Direct's said it "deeply regrets and apologises for" the failures.

It also announced human resources team at Shirebrook will be "significantly strengthened" and will include a full-time nurse and a welfare officer.

Mr Ashley has previously said he was unaware of problems at the firm.

Despite the changes, he is expected to face shareholder and union anger at Wednesday's AGM and "open day", where he will open the retailer's factory doors to the public in a rare act of transparency.

Business Committee chair Iain Wright said the report does not go far enough Credit: PA

The Chairman of the House of Commons Business Committee which investigated Sports Direct, Iain Wright, has welcomed the report but said it did not go far enough.

Mr Wright called for a wider, more independent review of practices at the company, as he highlighted the report's revelation that no formal contracts were in place for workers on zero-hours contracts.

The Labour MP called it an "astonishing lapse of management indicative of the lax attitude that we have seen in the company".

He told BBC Radio 4's Today programme: "This isn't a whitewash in terms of a report.

"There are questions over the independence of the people who have done it, because it is Mike Ashley's lawyers who have published the report.

"It has gone a long way but not far enough."