SportsDirect (USC Dundonald)

Debate between Jo Swinson and Cathy Jamieson

Tuesday 27th January 2015 Westminster Hall

[Jo Swinson]

I happily give that assurance. Obviously, certain elements remain confidential because of specific legislative requirements, but I am happy to keep the hon. Gentleman updated on the issue.

I will touch on the important matter of the employees and support for them, before coming to some of the specific issues raised about Mike Ashley. Obviously, whenever people are made redundant, support is crucial. That is why the Jobcentre Plus rapid response service is available and can provide everything from information to help with job search, identifying skills gaps and, ultimately, training to update skills or learn new ones to ensure that people can move back into employment. That is particularly important for those individuals.

In terms of redundancy payments, employees are guaranteed to receive their wages and other payments owed, subject to certain limits. That money comes from the national insurance fund.

[Cathy Jamieson]

Will the Minister say something about the position of those who are on zero-hours contracts and the particular difficulties that they will face?

[Jo Swinson]

I will certainly come to that issue. The redundancy payments service has begun processing claims—I understand something in the region of 30 claims have already been put in. It aims to pay 80% within three weeks of receiving the claim form and 93% within six weeks of receipt of the form.

Obviously, within the group of people who have been made redundant, there is a mix of those who were on fixed-hours permanent contracts and those who were on zero-hours contracts. However, it would not be accurate to say that somebody on a zero-hours contract has no right to a redundancy payment. The calculation for the payment tends to be made on the basis of an average of, I think, the 12-week period running up to when they were made redundant. I hope that will provide some reassurance to the hon. Lady’s constituents who may find themselves in that position. Guidance on redundancy pay for any employer affected is available on gov.uk.

Hon. Members have raised significant concerns about the behaviour of Mike Ashley, and I share those concerns. He seems determined to show that rules are for other people. We know that he bought nearly 10% of Rangers football club, and in doing so rather skirted the edges of the SFA’s rules on owning two clubs. Despite being blocked by the SFA from increasing his shareholding further, he appears to be looking to expand his influence. The rules that prevent the same person from owning two clubs are there for a good reason: to prevent conflicts of interest and to safeguard the integrity of the sport.

We are talking about a man who, according to media reports, forced through a £200 million bonus scheme at SportsDirect and subsequently withdrew his own participation amid speculation that he introduced the scheme simply to show his investors who was in charge. Some 90% of SportsDirect employees are reported to have zero-hours contracts, so they would not be eligible for the scheme. At least one worker was allegedly told that a zero-hours contract meant that she would not receive holiday pay. I cannot emphasise enough that that is against employment law.

There are serious questions to be answered about USC and many of its practices. I have outlined that the Insolvency Service has the power to receive information from the administrators and to investigate any company that it believes has questions to answer. I welcome the suggestion that Select Committees may also wish to ask questions.

I believe that zero-hours contracts have a place in a flexible labour market, but they are not a substitute for proper business planning. I fail to understand how a retailer can get away with employing the majority of its staff—up to 90% of the work force of 20,000 at SportsDirect—on zero-hours contracts. Apparently, SportsDirect operates some 420 stores, but it has a permanent work force of perhaps only a couple of thousand people. I do not see how a retailer can reliably open its stores every day if the workers on zero-hours contracts genuinely have the power to say that they will not take any given shift. A zero-hours contract should mean that the employer is free to offer work or not to offer work, and the employee is free to accept or decline that work.

I am at a loss to see how such use of zero-hours contracts can be deemed to be in any way responsible, and I think there are even questions about whether it is in line with employment law. Certainly, exclusivity clauses, which must be part of the way in which SportsDirect operates zero-hours contracts, will soon not be legal in such contracts as a result of the action we are taking in the Small Business, Enterprise and Employment Bill, and rightly so. Using zero-hours contracts to fill the gaps by requiring people to turn up for work but not giving them guaranteed hours is not a responsible use of such contracts.

Cases have been brought against SportsDirect by people such as Zahera Gabriel-Abraham. That case was settled out of court, but some of the media reports were concerning. The Guardian reported that

“the retailer will have to make clear in job adverts, contracts and staff rooms that it does not guarantee work, sick pay or holiday pay”.

I do not believe that that is the full story, because it is not for an employer to decide whether their employees get sick pay or holiday pay; it cannot simply opt workers out of their statutory rights. One of the barristers from Leigh Day summed it up well:

“Zero hours workers are not second class workers. They have the right to be treated fairly and with respect. They have the right to take holidays and to be paid when they take them. They have the right to statutory sick pay. They have a right to request guaranteed hours. Sports Direct will now have to make that crystal clear to staff.”

I hope that the reports do not suggest that those staff have not been getting sick pay, holiday pay or their other statutory rights. I encourage anyone at SportsDirect or anywhere else who thinks that they have not been receiving their proper rights to contact ACAS or the pay and work rights helpline on 0800 917 2368. Breaking employment law is absolutely unacceptable, and compliance will be properly enforced.

There are certainly questions to be answered about the matters in the USC administration and pre-pack sale, and the Insolvency Service will be looking at the information that it has received. The hon. Member for Central Ayrshire asked a wide variety of questions, and I appreciate that time is short—

Post Office - Horizon System

Debate between Jo Swinson and Cathy Jamieson

Tuesday 9th July 2013 Commons Chamber

[Jo Swinson]

Yes. The report mentions a couple of bugs in the Horizon system, which the Post Office proactively found and rectified, but basically what it has found to be lacking in Horizon is not the software, but the support and other issues around the software.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

The Minister has given some full answers to the questions posed, but she was unable to give a direct answer to one of the questions put by my hon. Friend the Member for Edinburgh South (Ian Murray) from the Front Bench. Let me give her another opportunity to confirm whether the Government and Post Office Ltd are considering changing the Locals programme from a voluntary to a compulsory basis. A simple yes or no answer would be adequate.

[Jo Swinson]

I am always keen to be concise. I think I did answer the question earlier. I pointed out that the transformation programme is an important part of the Post Office’s future. We are making sure that we look at how it will be delivered with the new strategy for the Post Office that will published, and we are working closely with all the stakeholders to ensure we can do that. What is important is that whatever the future system looks like, there will be a choice for sub-postmasters, rather than forcing them down a particular route.