The major leisure retailer Sports Direct International PLC is a case in point. It was criticised for allegedly failing to pay the minimum wage to some workers, mainly engaged through employment agencies. This was because they were unpaid for the period when they were searched before leaving the company's major distribution centre. There was also alleged widespread use of zero hours contracts and a "6 strikes and your out policy" for a list of relatively minor events. The company has now stated that it will comply with the minimum wage legislation, offer workers guaranteed hours, and scrap the dismissal policy.
This has occurred after its 55% majority shareholder Mike Ashley appeared before a Commons Select committee in June and conceded that certain practices required review. It also follows a press campaign led by the Guardian newspaper, the trade union Unite and an investigation by the HMRC which is responsible for taking enforcement action for non payment of the minimum wage. It is possible that the company will be named and shamed by the Department of Business, Energy and Industrial Strategy (the old Dept of Business Innovation and Skills) for failing to pay the minimum wage. Press reports suggest the company may have to pay up to £1 million or more in back pay and potential penalties.
A major shareholders group has also campaigned for the non re-election of certain directors (albeit this campaign may be of limited effect given there is a controlling shareholder). The announcement that the company's working practices would change and that there would be a follow up review was made the day before the company's annual general meeting.
The Sports Direct story is unusual for a company of its size.