Sports Direct boss Mike Ashley has pledged to spend £10m on raising the pay of all the firm’s employees to above the minimum wage.
The move follows a Guardian investigation that 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.
Related: Revealed: how Sports Direct effectively pays below minimum wage
The revelations prompted criticism from unions and MPs over the retail giant’s pay and employment practices, including the use of zero-hours contracts, under which staff do not know how many hours they will work from one week to the next.
It also comes shortly after the board announced Ashley would oversee a review of all agency worker terms and conditions at the company.
The rise, announced in an interview with the Daily Mirror, is reportedly most likely to benefit casual workers in its stores and agency staff in its depot.
Ashley told the paper: “I’m making a New Year’s resolution pledge to the Daily Mirror – and I’m deadly serious. I want to see Sports Direct become the best high street retail employer, after John Lewis.
“I realise this is ambitious and it won’t be easy, but I believe as a FTSE 100 or even 250 company we have a responsibility to set a high moral standard.
“We’re putting our money where our mouth is and have notified the City we will be spending £10m ensuring all employees are above the minimum wage.”
He added that thousands of Sports Direct staff received “life-changing” bonuses each year.
Related: A day at 'the gulag': what it's like to work at Sports Direct's warehouse
However, thousands more on zero-hours contracts are not included in the bonus scheme, an issue which is the subject of legal action.
The pay rise will amount to around 15p an hour meaning workers aged 21 and above will receive £6.85 an hour, and 18- to 20-year-olds will be paid £5.45 hourly, the Mirror said.
There are around 4,300 agency workers employed in Sports Direct’s warehouse, while the company employs around 28,000 staff across the UK and Europe.
Sports Direct posted half-year results showing a 3.6% rise in underlying pre-tax profits for the six months to 25 October.
In December, more than £400m was wiped off the company’s value as investors turned on the company following disappointing financial results and the Guardian revelations.
Press Association contributed to this report.
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