CommercialJuly 27, 2018

Employees shopped by retailers

Employees shopped by retailers “It’s a bad example, but it’s not the only example.”

These were the words of Iain Wright, Chairman of the Business Innovation & Skills Select Committee, when talking on a Sky News interview about their report that went behind the scenes to the ruthless working world of Sports Direct, a world that founder Mike Ashley claims to have no knowledge of.

And he’s quite right, because details of staff getting paid below minimum wage and giving birth in the disabled toilet land on our news feeds only a short time after BHS crumbled, with Phillip Green facing questions of why the British retailer went from a pension fund of £43 million surplus to £354 million deficit in the space of 15 years.

Wright says while it’s difficult to accept that Ashley knew nothing of what was going on as someone with a very hands-on approach to the business, he understands how it’s easy to lose track in the face of rapid expansion,

“[Sports Direct] has grown far too fast and that’s one of the issues. One man can’t control what is the leading sports retailer.”

As Chairman of the Arcadia Group, Phillip Green on the other hand is in control of several very profitable high street chains, a position of responsibility and power in the UK retail industry which has not escaped the notice and criticism of the Government, including Labour MP Frank Field who is now being threatened with legal action after he alleged the tycoon had “plundered” BHSs’ pension scheme.

Both Sports Direct and BHS, which is now facing imminent closure with a loss of around 11,000 jobs, are not shining examples of how to treat staff, and cast the UK retail industry as a whole in a dim view – so much so that Prime Minister Theresa May is considering reform to curb irresponsible behaviour of the few to the detriment of many in the future.

Here is a lesson on the success of businesses, and how not to treat staff, but also the legalities of those in a position of responsibility.

Wright said he’d hoped that the report on Sports Direct would encourage other staff members to come forward if some of the specifics of the now infamous retailer rang true with them.

Employers Liability and Directors and Officers Insurance are policies which are designed for scenarios just as these, but clearly, in the case of BHS and Sports Direct, it has taken a far greater, more public challenge to bring these employee failings to light. Now that they have been, there’s no escaping them.

Perhaps it will lead other businesses to question whether or not the welfare of their own employees sits high enough in their priorities, and if not, whether they’ve at least considered the consequences.

The Insurance Centre offers a wide range of Commercial Insurances that can assist you in making sure that you are adequately covered. If you run a business or are looking to start up a business then please feel free to contact us for more information.