Guides & Advice

Frasers Group scandal: How not to treat employees

Published: 12th August 2020
Area: Corporate & Commercial

Frasers Group scandal: How not to treat employees

For the second time in five years, Mike Ashley’s Frasers Group has been accused of mistreating workers.

In late June and early July, a Guardian reporter went undercover to one of the Group’s warehouses and found that staff were allegedly being paid 52p less than the legal minimum, as well as being stopped from leaving the site during their breaks. Mike Ashley has a less than glowing record when it comes to the treatment of his staff, so can Frasers Group recover from yet another scandal?

Reputational issues

These findings are a clear indication that Mike Ashley has not learned his lesson. Ashley’s decision to rebrand his empire under the ‘Frasers Group’ badge was an obvious attempt to escape the tarnish of the Sports Direct label, however, this latest scandal will surely send it back down in consumers’ estimation.

Nevertheless, following the Group’s rebranding, many customers are unlikely to be aware of the full range of brands that Mike Ashley is associated with and are more likely to be led by the products they wish to purchase. As such, the Group may retain many of its customers, regardless of its major employment law breaches.

A group effort

Ashley appears to be consciously trying to manipulate the employment law position as it stands. However, it’s also important to remember that while he is the driving force behind the Group, he also has a management team behind him who will be well aware of minimum wage rules.

Despite being such a large organisation, it is clearly being extremely ungenerous by not giving staff a real break where they can leave the business premises. In doing so, it is sailing close to the wind and potentially breaching minimum wage legislation.

Keeping an eye on Frasers Group

Following the 2015 investigation from HMRC and MPs, the public would have expected further visits to check that Ashley’s business was abiding by the rules. This latest incident shows that they may be likely to breach them again and again if not policed effectively.

As demonstrated by the Leicester sweatshop scandal in relation to Boohoo, significant time and resources are involved in keeping up spot checks. However, where such poor working conditions exist, it’s a likely indicator that workers are also not receiving basic employment rights.

Time to play by the rules

To stand a chance of recovering from this scandal, it’s vital that Frasers Group abides scrupulously by employment law moving forwards. This should involve regularly reviewing ways of working, contracts and payments to employees.

If the Group falls into the trap of erring on the mean side when making minimum wage payments, they may well be caught out in October when minimum wage rises come into place.

This scandal should be a major warning to UK employers to be thorough in their compliance with employment rules and to take expert legal advice if unsure about a certain area. In particular, smaller businesses may struggle to survive a public scandal of this sort.

As an employer, how do I ensure I’m being compliant?

Conducting an in-depth audit of their employment law position at least once a year, including a thorough review of staff contracts, can help companies to stay on the right side of the law and do right by their workers.

Contact us

No matter if you’re an SME, a large corporate, HR professional or a multinational, our team can provide support and guide you through the process – get in touch today or visit our employement solicitors page to learn more.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

Related services
Employment
Employment Disputes

SHMA® ON DEMAND

Listen to our SHMA® ON DEMAND content covering a broad range of topics to help support you and your business.

Sheffield Curry Club

5 Sep

Carys Thompson, Partner
Sheffield Curry Club

Our next Sheffield networking lunch will take place on Thursday 5 September 2024 at […]

Leicester Curry Club

11 Sep

Lisa Botterill, Partner
Leicester Curry Club

Our next Leicester networking lunch will take place on Wednesday, 11 September 2024 at […]

Nottingham Curry Club

18 Sep

Roger Harcourt, Partner
Nottingham Curry Club

Our next Nottingham networking lunch will take place on Wednesday, 18 September 2024 at […]

Social housing: Board induction training

24 Sep

Rachel Gwynne, Partner & Head of Social Housing | Ellis Pugh, Solicitor
Social housing: Board induction training

A good Board can make a massive difference to an organisation. In an […]

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333