Sports Direct is to launch a review of all agency staff terms and conditions, which it said would be overseen personally by its founder Mike Ashley.

The move follows a Guardian investigation, which revealed how temporary warehouse workers at Britain’s biggest sportswear chain are subjected to an extraordinary regime of searches and surveillance. Undercover reporters also came up with evidence that thousands of workers were receiving effective hourly rates of pay below the minimum wage.

The company said on Friday: “Sports Direct always seeks to improve and do things better, listens to criticism and acts where appropriate. With that in mind, as noted above, the board has agreed that Mike Ashley shall personally oversee a review of all agency worker terms and conditions to ensure the company does not just meet its legal obligations, but also provides a good environment for the entire workforce. We expect him to start that work in the New Year.”

Labour’s former shadow business secretary Chuka Umunna said: “This Sports Direct review is overdue but has the whiff of a pupil marking its own homework. Sports Direct should get an independent third party to do their review into workers rights - the company has a lot to learn.”



At the same time, Sports Direct mounted a robust defence of its employment practices, issuing a long list of rebuttals.



It said the warehouse tannoy is not used to ‘harangue’ or ‘name and shame’ staff, but is used for logistical reasons, for example, to redeploy staff to other areas of the building.

It said it does not penalise staff for being ill. “Sanctions may be applied if workers fail to follow the company’s reasonable sickness absence notification procedures, which are in line with industry best practice. The company is not aware of any occasions on which sick children have not been able to be collected from school by their parents. Sports Direct allows staff time off to look after dependants in such circumstances.”

Local primary school headteachers had told the Guardian that workers at Sports Direct’s Shirebrook warehouse in Derbyshire are sending their children to school while sick because they are too afraid to take time off work.

The company defended the security measures at its warehouse in Shirebrook in light of the risk of theft. Sports Direct said banning staff from wearing the brands stocked in the warehouse was “not an unusual practice,” adding: “There are of course numerous other brands that staff can easily wear.”

The Guardian revealed that staff are banned from wearing 802 clothing brands at work, and that they have to go through rigorous searches, and are not paid for their time while being searched.

The company said all employees, agency workers and visitors, including executive management and board members, are subject to “random searches”.

Sports Direct also defended its use of zero hour contracts for casual staff in its shops, saying it is not alone in using them. It added that a “significant number” of casual workers had moved from zero hour terms into permanent contracts “when the circumstances allow”. Many have developed successful careers within the company, including the chief executive, it said.

It also said that virtually all casual retail staff are eligible for bonus payments and that more than 80% achieved a performance-related bonus in November.

The retailer came under fire from MPs during an urgent parliamentary debate on Monday and a government minister, Nick Boles, said the company would face sanctions if it flouted wage laws. HM Revenue & Customs is facing increasing pressure to launch an inquiry into the sportswear retailer.