Asos Working Practices Questioned as Labour’s Smith Seeks Probe

  • Opposition leadership candidate urges parliamentary inquiry
  • Company rejects allegations of unfair conditions for staff

U.K. opposition Labour Party leadership candidate Owen Smith called for an inquiry into working practices at Asos Plc, saying talks with unions left him concerned the retailer could be “the new Sports Direct."

In a letter Wednesday to Iain Wright, who heads Parliament’s Business Committee, Smith urged the panel to begin an inquiry into conditions at the online fashion retailer’s distribution center in Barnsley, northern England.

After a meeting with the GMB union, whose members endorsed his leadership bid Wednesday, Smith said he’s “appalled” at reports that warehouse staff are being subjected to invasive surveillance, limited access to toilet facilities and random searches during lunch breaks. In some instances, staff turned up for shifts only to be told they hadn’t been allocated any work, he said.

The accusations echo the findings of the committee’s investigation into Sports Direct International Plc. The chain’s billionaire owner, Mike Ashley, was admonished by the panel last month for presiding over working conditions that demeaned staff. Wright said the model had significantly contributed to Sports Direct’s success and expressed concern that it would become the norm for British companies.

ASOS said the allegations were unfounded and that Smith had not visited the Barnsley warehouse to verify their accuracy. “People can take toilet and water breaks whenever they want, and we pay above minimum wage,” the company said in an e-mailed statement.

Fast-growing Asos has bucked the trend of the struggling U.K. retail sector in recent years. Immune from the decline in visitors to shopping streets and bolstered by international expansion, the e-commerce company posted sales growth of 18 percent last year.

Asos shares fell 1.9 percent to 4,710 pence in London, trimming this year’s gain to 36.5 percent.

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