JD Sports Fashion has requested an independent review of policies and their implementation at its distribution center in Rochdale, which has come under scrutiny after allegations in a British television program broadcast earlier this month.
The investigation by Channel 4 News alleges that some workers at the warehouse in Kingsway Business Park were not paid for time spent on security checks. It further claims that workers could be sacked on the spot just for sitting down, and that the warehouse functions with a “strikes” policy meaning that workers could be penalized for offenses such as chewing gum or wearing branded gear – all of which JD Sports Fashion denies.
JD Sports Fashion initially responded that it would review its policies, their communication and implementation at the site near Manchester. The retailer later added that it had requested Deloitte to carry out a full and independent review, supervised by the non-executive directors on the retailer's board. The entire board will then consider the recommendations of the report and implement any further improvements that are deemed necessary. JD Sports Fashion further promised to be transparent about the changes and to welcome any appropriate independent body wishing to scrutinize its operations at Kingsway.
The facility reportedly handles distribution to retailers and customers all around Europe. It functions with about 1,500 workers, some of them employed directly by JD and others by an agency.
JD Sports Fashion said it was deeply disappointed and concerned by the footage, but added that it does not believe it's an accurate reflection of its culture, the vast majority of its people or its standards of practice and procedures. The group maintains that its policies and procedures are robust and fair, but acknowledges that their implementation ought to be improved. The retailer will be urgently retraining all supervisory and security employees at the facility.
The British group particularly reiterated that it does not operate a “strike” policy and that workers may not be fired “on the spot,” as the group adheres to a fully outlined disciplinary procedure and appeal process. Furthermore, JD Sports Fashion says the time and attendance system is specifically designed to ensure that all workers are paid for the time it takes to exit any queue on leaving the site, and it pays in full all employees who are up to 15 minutes late on arrival.
The broadcast comes about one year after The Guardian published its investigations into working conditions at the Sports Direct warehouse in Shirebrook, with allegations that led to a parliamentary committee enquiry and substantial reforms earlier this year. Sports Direct International (SDI) shares have been under intense pressure, as these issues coincided with a weakening financial performance.
This contrasted sharply with the situation of SDI's leading British rival, as JD Sports Fashion reported record results for the first half of its fiscal year in September, on the back of rapid expansion in Europe and buoyant demand for sports fashion products. JD Sports Fashion's immediate response to the broadcast about its warehouse apparently went down well with investors.
However, the allegations around the JD warehouse are strikingly similar to those around working conditions at Shirebrook. They suggest that some of the working conditions may actually be worse at the JD warehouse, since Channel 4 alleges that workers may be fired after three “strikes” at Rochdale, while Sports Direct was accused of applying a “six strikes and you're out” policy (this was the subject of one of the reforms announced by SDI in September). At the end of the Channel 4 investigation, one female worker in Rochdale is heard saying that she has applied for work at Sports Direct.
The ensuing debate on Channel 4, with a JD logo in the background, brought outspoken condemnation from parliamentarians from both the Labour and Conservative parties. The chairman of the parliamentary committee that investigated working conditions at the SDI warehouse, Iain Wright said he was “disgusted” by the claims in the Channel 4 News broadcast, and that JD's management should explain itself in front of MPs – as did Mike Ashley, majority shareholder of SDI, after much hemming and hawing.
A spokesman for the committee said that alleged issues at the JD Sports Fashion warehouse would be included in an inquiry that was launched in October around the “future world of work” at large – studying issues such as the use of agency workers, self-employed workers and generally the way in which work is organized in the so-called gig economy. The rise of online retailing has led to far-reaching changes in logistics for some companies. Along with Sports Direct, Amazon and Asos have also been at the center of media scrutiny regarding their warehouse operations.
