The name Mike Ashley is not exactly synonymous with good corporate governance. Not only has his company, Sports Direct, been criticised for unfair contracts – in July 2013 around 90% of employees were on zero-hours contracts – their warehouses are routinely compared to Victorian workshops and Gulags. There have been investigations by Parliament, the Guardian, the Information Commissioner and, of course, the courts. When staff are sacked with 15 minutes’ notice, and ambulance crews report employees giving birth in the toilets, you would be hard pushed to find a more odious employer.
Now Mr Ashley’s Sports Direct has announced they will allow workers’ representation on the board. Mike believes it is important that their “voice is heard at the highest level”. Thus Britain’s most horrendous employer is allowing Britain’s first elected worker represented board. Certainly an improvement, but will it make a difference?
Most proponents of worker representation point to German codetermination as an example. Since the law there was passed in 1976, half of the seats on the boards of companies with 2,000 or more employees must be occupied by labour representatives. In companies with less than 2,000 employees, the proportion is one-third. Mike Ashley proposes one.
Yes one employee to represent retail, warehouse and head office – around 17,000 employees. One employee tasked with standing up for some of the most deprived employees in the UK. They will have to fight for better contracts in the warehouse, to end the insecurity and uncertainty of zero-hours contracts. They will have to ensure the company does not repeat the scandal of paying less than minimum wage. And they will have to see the end of cruel and degrading practices, that see workers risk their health for fear of dismissal. A tall order, given the amount of political and legal pressure required to simply have Sports Direct comply with the law.
When the time comes it will be useful, and I suspect rather depressing, to compare the results of this board structure with the German model. If Ashley’s scheme fails, however, to improve the workers’ lot, it will not be down to the one representative. Nor would it be the fault of 10, or 100. The key difference between the German model and Ashley’s proposal is not the number of workers at board level, but the structure of the scheme. German codetermination is law; it is a specific and regulated legal scheme. Ashley’s proposal, though undoubtedly an improvement, is ad-hoc and incoherent. It smacks of desperation. What Britain needs is a clear structure for business that protects workers’ interests. Whether that be representation on the board, which Theresa May proposed last year and now ignores, or stronger union involvement, or a legal end to unsafe contracts, there is a great deal that could be done. But for it to be effective, it must be coherent and regulated. In terms of workers’ rights, I doubt that Sports Direct will lead the way for much longer.
By Jonathan Peter
Photograph: PETER NICHOLLS/SPORT DIRECT-ASHLEY/PARLIAMENT