A month-long delay to a promised pay rise at Tesco has been condemned by some staff because it leaves them on less than the minimum wage, while saving the supermarket more than £17m.
Tesco, one of the UK’s biggest employers with more than 330,000 staff, has pledged to increase the minimum pay for its shop workers from £11.02 an hour to £12.02 next month, but the rise will not be implemented until 28 April, almost a month after the legal minimum wage for those aged 21 and over increases to £11.44 on 1 April.
One member of staff told the Guardian: “We are all extremely angry at this especially as this was approved by our union.”
The delay is allowed under HMRC rules, which say minimum pay rates can be applied from the start of the “pay reference period” starting on or after 1 April – which for Tesco begins on 28 April.
Based on the 220,000 workers affected by the pay rise missing out on £1 an hour compared with the promised new rate, Tesco saves more than £17m by introducing the pay rise at the end of April. It saves 42p an hour compared with if it paid the new legal minimum wage for those 21 and over, equivalent to more than £7m over the period in question.
Daniel Adams, the national officer for the Usdaw union, which agreed the new pay deal, said: “Whilst we would have preferred that the company implemented this increase earlier, as Usdaw had originally requested, the regulations do allow them to make that decision.
“Usdaw has negotiated a significant pay rise that makes Tesco workers amongst the highest paid in the sector. While the union will always seek implementation on the pay anniversary date, which was 2 April last year, the outcome of these negotiations meant that the date was delayed until later in April to allow for the highest investment in pay possible.”
The union said the 9% rise in pay next month would benefit 220,000 people and represented one of the largest investments in pay by Tesco in a single year amid heavy competition for workers.
Asda recently announced it was increasing minimum hourly pay to £12.04 an hour while Sainsbury’s, Aldi and Lidl have upped pay to £12 an hour.
A Tesco spokesperson said: “We are investing over £300m in colleague pay, bringing our hourly rate to £12.02, which is significantly ahead of the national living wage, in a deal that has the full support of Usdaw.
“Our new rate is effective from our April pay period as set out in the HMRC guidelines, and we are fully compliant with all NLW requirements. We have a strong track record of making substantial investments in colleague pay and, since 2022, we have increased hourly pay by 26%, investing more than £750m in our colleagues.
The company said it had also enhanced other benefits including an increase in paternity leave to six weeks, and an extension of our colleague discount allowance to £2,000 per year.
The row comes after the supermarket in January upgraded its profits expectations for the year by £50m to £2.75bn as it reported “a stronger trading performance than anticipated” over the festive period.
He partly credited the success to “more colleagues on the shop floor, helping to deliver market-leading availability”.
