Sports Direct is responsible for employing nearly one in every five workers in the retail and wholesale sector on a zero hours contract, official data suggests.
The revelation comes as a senior employment lawyer warned that the company, owned by the billionaire Mike Ashley, may have broken rules on consultation by giving staff at its USC fashion house only 15 minutes’ notice before they lost their jobs on 13 January.
The retailer’s chairman, Keith Hellawell, was grilled by MPs last week over the collapse of USC, which left 83 redundant.
He was also questioned about the company’s use of zero hours contracts. Sports Direct employs nearly 15,000 on terms that guarantee no set hours each week.
Mr Hellawell claimed that Sports Direct uses the contracts no more than any other retailer, but data from the Office for National Statistics (ONS) appears to cast doubt on this.
When Mr Hellawell was asked why the business uses the contracts so widely, with 75 per cent of its UK workforce on them, he said it was due to the flexibility they offer. He added: “I suspect that, in percentage terms, we are probably not much different from other people in the retail business. It is just that we are so big, so the numbers are quite substantial.”
ONS figures show that from October to December 2014, just 1.8 per cent of people working in retail and wholesale were on zero-hours contracts. This indicates that 72,000 are employed in the sector on the contracts, with one in five working at Sports Direct.
The Scottish Affairs Select Committee, which was questioning Mr Hellawell, also heard from Philip Duffy, joint administrator for USC. The firm was previously owned by Sports Direct and was sold back to Sports Direct in a pre-pack administration, wiping out the company’s debts.
Mr Duffy claimed that his company, Duff & Phelps, attempted to encourage Sports Direct to begin a consultation period with its staff but were ignored, and were forced to “consult” with staff themselves but with only 15 minutes’ notice.
The employment lawyer Kevin Poulter, of Bircham Dyson Bell, said 15 minutes would not be enough for a proper consultation. He said: “The law expects that you are communicating with your employees where there is a likelihood of redundancies, and from this case that would appear to be December, when a winding-up order was issued.”
USC, which traded as West Coast Capital, was issued with a winding-up order in early December by Diesel, over money it was owed for stock. Mr Duffy told MPs that 95 per cent of companies issued with such orders do not survive.
Mr Poulter said such evidence could be used in a tribunal hearing to strengthen a case for consultation to have started sooner.
The normal minimum consultation period is 30 days before dismissals take effect.