Retail organisation Sainsbury’s has proposed to increase its base rate of pay for 130,000 store employees, from £8.00 an hour to £9.20 an hour for UK employees or £9.80 an hour for staff based in zones one and two in London.
To fund the pay increases, which total £100 million, Sainsbury’s plans to implement numerous cost-saving measures to simplify business practices. This includes offering new contracts to all store employees that will remove employee bonuses, which are currently awarded on a non-contractual, performance-related basis, as well as remove paid breaks.
The proposed contractual changes will also change premium payments, amend productivity, flexibility and attendance standards, and streamline job roles to reduce 22 specific roles down to five.
Sainsbury’s intends to provide top-up payments over an 18-month period once the proposals are implemented to ensure that employees are not adversely impacted by the pay changes.
If the proposed changes are accepted, they will come into effect from September 2018.
Sainsbury’s has increased pay for eligible store employees by 4% over three consecutive years. The organisation has also increased its base rate of pay by 30% over the last four years.
Simon Roberts, retail and operations director at Sainsbury’s, said: “The retail sector has never been more competitive and we know that customers really value our [employees] and the excellent service they provide in our shops.
“[This] is why we think it is so important to invest further in our [employees] so they feel rewarded and motivated to do the best possible job for our customers every day. We expect the best from our teams and that’s why we’re committing to a leading rate of pay. Great pay for great work.
“Together with our recent proposals to change our management structure in stores, we believe the proposed changes will set us up to run the best shops in the industry, delivering the best possible service for our customers.”
Bev Clarkson, acting national officer for food and drink at trade union Unite, added: “We are in a classic ‘robbing Peter to pay Paul’ situation, which we don’t think will benefit our members in the long run.
“Sainsbury’s has announced its intention of increasing the basic rate of pay to £9.20 per hour from September 2018. This would take [its] rate to the highest in the industry, which Unite welcomes as a positive move for our members. However, there will be no further increase in salary until 2020 and given what our members have been asked to give up in return for this headline rate, the overall package doesn’t look that attractive.
“Our members will have to make a number of sacrifices to secure this rate of pay, which includes the removal of paid breaks and Sunday premium pay, as well as a number of changes to the attendance policy. Unite believes these ‘strings’ will offset any rise in basic pay. We will be holding a consultative ballot of our members at the end of the month.
“We are recommending rejection and will decide on the next steps after our members have expressed their views in the consultative ballot, which should be known by the end of April.”