Sports Direct boss accused of running 'Victorian workhouse'

Forced to endure a draconian set of rules in harsh conditions, staff were too afraid to take time off for illness with one giving birth to a child in the toilet, the all-party Business select committee said.

A swathe of operating practices were revealed during the committee's inquiry into the retail billionaire's business model, including a “six strikes and you're out” policy, naming and shaming of staff over the tannoy at the Shirebrook Warehouse in Derbyshire and failing to pay the minimum wage.

Transline, one of two agencies that supplies Sports Direct with workers, may have deliberately misled the committee in evidence “which could be considered a contempt of parliament”, the committee said in its final report. The company denies the charge.

Committee members heard from Transline finance director Jennifer Hardy, who denied a claim that the company had its licence revoked by the Gangmasters Licensing Authority (GLA), which regulates companies involved in food and drink processing.

Hardy said it had not been revoked, but had lapsed, which was later refuted by the GLA as “categorically not true”.

After months of criticism and a drawn-out procedure to get the Sports Direct boss to appear before the committee, Ashley acknowledged some of the issues and agreed to give staff a pay rise as part of a review of the business he would conduct personally.

Victory for the workforce was not yet assured, warned committee chairman Iain Wright who wrote in the Guardian that the committee would be holding Ashley's “feet to the fire to check on progress”.

Cost cutting through the use of agency workers also troubled Wright, who said this allowed firms to avoid their responsibilities and failed to create an environment where the link between secure full or part-time employment helped to boost productivity.

Unite, the union which collected a dossier of evidence for the committee, said the problems at Sports Direct stemmed from the use of agency or zero hours contracts.

Noting that the sports good retailer was not the only firm employing such practices, the union said the government should take another look at what legislation could be implement to protect workers.

The companies now have have two weeks to respond to the committee's findings.