ASOS : and our people Read

ASOS and our people 5th October

"I'mdisappointed that inaccurateand misleadingthingshave been saidabout howwe manage our warehouse at Barnsleyin Yorkshire. We want every singlepersonwho works with ASOS directly, or for one of our partners, to have a great experience and feel respected and valued. Where we've been able, we have tried to set the record straight, but somemisrepresentation continues. I lead the ASOS managementteam so I know how seriouslywe take our responsibilities as an employer. I take huge exception to the idea that we are secretive andexploit our people. We have nothingto hideand much to be proudof. I want the facts to speak for themselves. We don't pretend to be perfect andwe are learningall the time. We learn, re-set and go again. That's the way we dothingsat ASOS. Hopefullythis summary will dispel the allegations thatare upsetting to me personally, andto everyone who works at ASOS, particularly ourcolleagues in Barnsley."

Nick Beighton, CEO, ASOS plc.

We take the welfare of the people who work with ASOS very seriously, wherever they are. We, along with our partners, employ around 7,000 people in the UK, and thousands more around the world in our global supply chain. We know we have a direct responsibility foreach one of these peopleand we are working continuously to support them in the very best way that we know how.

We have strong values at ASOS on which we are building ourbusiness. It is important to us that everyone who is involved in, orcomments on, ourcompany understands that we walk these values every day, not just talk them. They are not empty words.

In a large facility such as ours at Barnsley, where we have 4,000 people, we know that not everything is going to be perfect all the time. But we continually work hard to do our best forour people, learning from what they say and then improving as we go.

We are dismayed by the comments in the mediaon working conditions in ourwarehouse, which are inaccurate or based on out of date information, including misleading statements that deeply upset us as well as our people at Barnsley. A detailed, factual account of ourpolicies and processes is included below- including specificdetail on things likewages, working conditions, and the annualised hours system.

We take exception to the suggestion that we are secretive and exploit people. We do not pretend to get everything right all the time, but the picture being painted of how we run our warehouse is very wrong. "No smoke without fire" would be areasonable reaction to the recent mediacoverage , but ultimately inaccurate. So let's deal with the facts in detail.

We deliberately chose to locate ourwarehouse in Grimethorpe, South Yorkshirebecause of the unemployment created by the closing of the coal mine, and we believed we could make adifference in the area. Since opening the warehousein 2011, we have invested atotal of £81 million in the site. That money is part of a rolling programme of improving the workplace. Forinstance, what was initially aheavily manual process has been significantly automated, to the benefit of our people, so the physical distance they have to coveris dramatically reduced. We have another£23 million earmarked for investment overthe next 12 months. We, through our partner XPO, are the largest private employer in Barnsley and have paid more than £200 million in salaries since 2011. No doubt providing awelcome stimulus to acommunity that had been deprived of employment. Lateron we set out some of what we do locally as part of a community we are proud to be a member of.

Of the 4,000 people we employ at Barnsley, 80% live within a 10-mile radius of the facility. 81% of the hours worked annually in the warehouse are by permanent, full -time employees. Ourpolicy is to advertise every job locally to give the areamaximum employment opportunity.

Like most companies operating big facilities like ours, we subcontract the management of it to experts. In ourcase we work with XPO, who are a trusted partnerand specialist in this area. XPO operates 195 facilities in the UK alone, and 1,440 globally. But we know that we can never outsource the responsibility forour people.

We are proud of the people at Barnsley, the work that they do, and the role ASOS is playing in the local community. So it is especially upsetting to all of us that a particular union repeatedly makes false and sensationalist allegations about ourwork practices.

Despite concerted efforts to unioniseourwarehouse over the past five years, the union has repeatedly failed to achieve the required percentage membership of ourworkforce. We are not averse to unionising ourwarehouse - far from it, but only when ourpeople want it and we can ensure it will benefit them. In the meantime,we have had an Employees Forum in place forfive years, elected directly by the workforce. This forum represents the workforce and meets with the warehouse management every month. This is an open dialogue that we value highly, and it has resulted in important changes likeextended paternity leave and shortened probationary periods.

Terry Green, the annually elected Chairman of the worker's committee wanted to say: "I've worked at Barnsley for five and half years and it meansa lot to me that I've been elected to represent my colleagues. This campaignby the GMB to spread falseinformationhasbeen goingonfor years and we are all tired of it. We are part of a team where proper training is given, new incentives are beingbrought in regularly, and the buildingweare working in hasgone from strength to strength. It is insulting and annoyingforall of us to continuereadingthingsthat are sountrue, and so differentthan what our dayto dayreality is. Weare really proud of whatwe do together here and just wantto get on with our jobs."

We note comments from politicians about low paid workers and the whole subject of employment in working environments such as ours at Barnsley. We welcome that dialogue and want to be part of it. We look forward to engaging with Government in general and engage in apublicpolicy dialogue. We have nothing to hide and we believe ourexperiencecan make a positive contribution to the debate.

The picture of an uncaring, secretive and exploiting employer from Victorian times is false. Actually, it isn't practical either. If we ran our warehouse that way, we wouldn't have aproductive environment. The oppositeis true in fact - our people regularly outperform and deliveroutstanding results.

Mark Holland, ASOS Supply Chain Director, with overallresponsibility forour Barnsley warehouse, said: "I've managed facilities like Barnsleyfor 20 years. Anyone who thinks you can achieve productivity with the kindof behaviour beingthrown at us is deluded. People are treated with respect, and they wouldn'taccept anything less. I believe what we are all achieving together at Barnsley shouldbe recognised for the very good thing that it is".

We respect the media's right and role to highlight bad employment practices. All we ask for is a more informed engagement. Ourmanagement and indeed oursite at Barnsley are available forthat engagement. We have nothing to hide and agreat deal to be proud of.

To demonstrate that, we'd like to address, in detail, the misleading allegations that have been made, and outline ourpolicies very transparently and clearly.

WAGES

• We currently pay above the statutory National Living Wage forall employees and are competitivein the area. We are committed to migrating towards the living wage as determined by the Living Wage Foundation within 18 months

• We do not and neverhave used zero-hours contracts

• Importantly, we are not reducing other benefits to cover the increase in wages

• Following consultation with the Employee Forum, we are reducing the probation period to three months from six, effective immediately

• The same wage rates apply forthose under 25 as over 25 years of age

• There are no wage differences fortemporary versus permanent contracts

• We pay a premium of 20% for work during night shifts

• We also pay productivity bonuses to employees who pick and pack orders and achieve their targets - 62% receive additionalbonus payments

• We have upgraded ourtime tracking program and are now able to more accurately record lateness so employees are paid forevery single minute they are working

• We give paid time off to attend medical appointments if the appropriateconfirmation is received

  WORKING CONDITIONS

• There have been three instances of reportable accidents so far in 2016 and one in 2015. However, we always call an ambulance foremployees when needed - whetherthe issue is work related or not

• There are toilets and water fountains within a 4-minute walk of any point in the warehouse. Break time is not counted as "productive" and therefore does not impact productivity targets or pay

• We actively encourage employees to take waterand toilet breaks wheneverthey want and emphasise this in ourmanagement training

• Performance targets are set at industry standard rates and are constantly reviewed. We use performance targets as just that - a target to try to meet, but we recognise this won't happen all the time

• We provide a subsidized restaurant, recreationalareaand internet café, as well as free Internet access forall colleagues on site, arelaxation area, sofas, pool tables and vending machines

• Part-time shifts for working parents and students

• Paid day off if rostered day falls on the employee's birthday

• Regular HR surgeries held across all shifts

• Comment boxes are availablethroughout the warehouseforemployees to provide anonymous feedback, and this is processed weekly and reviewed by seniormanagement

• We are proud to have won the Royal Society forthe Prevention of Accidents (ROSPA) gold award forhealth and safety, and Gold Standard for Well-Being by Barnsley Council

  INVESTMENT IN WORKING CONDITIONS

• We have invested £81 million in the site since 2011 - including a £3 million cooling system to improve conditions in hot weather and automation to decrease the physical nature of work at the site and £750,000 in environmentally friendly LEDlighting

• We have £23 million planned investment forthis year - including furtherupgrades to the restaurant, lockerroom, relaxation spaces, and we are creating awell-being centre on site for everyone who works there

• 567 new jobs have been created in the past two years

  SECURITY AND SEARCHES

  We recognise this is ahighly emotive issue and if handled insensitively, is invasive and offensive. Nonetheless, in awarehouse with more than £150 million worth of stock, including many high value items, we also have to take precautions.

• A very small percentage of peopleon site - whethermanagement, stafforvisitors - are searched each day. That is approximately 2% or 80 out of 4,000 people. This compares to many businesses that search 100% of theirworkforce every day

• The searches are done with a wand that does not touch the person's body, and take approximately 90 seconds, with aboot search taking no more than 3 minutes

• Searches should not be conducted during employees' lunch orbreak time - this has happened and we apologized to the employees and emphasised to the security team that it should not happen again

• We do occasionally search shoes and vehicles - approximately2 cars pershift

• Following consultation with staff, we have decided not to move forward with the proposal of installing security cameras at each packing station

  ANNUALISEDHOURS SYSTEM

• Flex weeks are published in February forthe following 12 months starting in April - when an employeeis on a flex week they can be asked to flex up or down, depending on demand

• Employees are on flex weeks 50% of the year

• Employees with medical conditions are exempt from the annualised hours system

• Maximum flex up time perday is 2 hours

• As a resultof consultation with the Employee Forum, we have ended same-day flexing, as our terms are evolving constantly. Moving forward, employees will be given at least 24- hours notice on flex time

• Hours are reconciled annually