Tesco set to face legal dispute over pay cuts
But employment lawyer warns more businesses could slash wages for ‘anti-social hours’ in response to NLW and ‘24/7 culture’
Tesco is facing legal action from employees after cutting pay for ‘anti-social’ hours, but an employment lawyer is warning this could be the beginning of wage cuts for employees working weekends, bank holidays and night shifts.
The supermarket giant announced the pay changes in February, with wages reduced for Sunday and bank holiday shifts from July onwards. But a group of 17 workers are currently going through the statutory ACAS pre-claim conciliation process. If a resolution is not achieved via this process, the clients will then take their claims to an employment tribunal.
Paula Lee, from the employment and discrimination department at Leigh Day – which is acting for the group of Tesco employees – said its clients were “extremely unhappy that they have had their wages reduced in this way”.
But Abigail Trencher, a partner at Birketts LLP, said Tesco’s proposals were “unsurprising” and reflected “our changing society, particularly lifestyle and legislative changes that have impacted retail employers, particularly large supermarkets”.
The introduction of the national living wage (NLW) in April, coupled with the increasingly ‘24/7’ nature of British society, meant it was inevitable that Tesco would need to reconsider what it deems to be unsociable hours, said Trencher.
Add to that rising inflation and food costs, and “it is unsurprising employers will seek to reduce overall staff costs by other means”, she said.
“We are therefore likely to see more employers seeking to change their pay arrangements and, in most cases, providing a fair procedure is followed, employees should find it difficult to challenge those changes.”
Tesco also announced earlier this year that the hourly rate for its lowest-paid staff would increase by 3.1 per cent, with more than half of these costs funded by “reinvestment from existing payroll”. A spokesperson said: “The minority of colleagues who were negatively impacted by this change were supported with an agreed lump sum transition payment.”
Leigh Day estimated that up to 37,500 hourly paid workers could be affected by Tesco’s decision – most of whom are over 40 years old.
All staff employed before 5 July 1999 have seen their previous benefits reduced, with the legal firm arguing that the imposed pay cut discriminates against certain groups of staff. It expects more employees to come forward to take action against the supermarket.
Lee said there seemed to be a growing trend among retailers to cut staff wages and use those savings in other areas of the business.
“It is the longer-serving staff in these retail organisations who usually suffer. Understandably our clients feel their loyalty is being taken advantage of; that the employer knows they are unlikely to leave their jobs and, in turn, that makes them feel vulnerable to further ‘no choice’ pay cuts,” she said.
In November last year Tesco chief executive Dave Lewis warned delegates at a CBI conference that the NLW, the introduction of an apprenticeship levy and increased business rates would amount to a “potentially lethal cocktail” for an already struggling retail industry.
Other employers that have come under fire for cutting holiday pay include Marks & Spencer andB&Q, but these organisations have denied that these changes are linked to the NLW.
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