John Lewis are to spend £40m to compensate staff who were accidentally underpaid for working Sundays and Bank Holidays during the past seven years.They will make a one-off payment to staff reflecting the amount due dated back to 2006.
Following a review of their Partnership's holiday pay policy it became clear that Partners who receive certain additions to pay, such as premiums for working on Sunday or bank holidays, had not been paid correctly under the Working Time Regulations legislation. The Partnership Board therefore decided to make one-off additional payments to those affected.
About 69,000 employees from its department stores and Waitrose supermarkets are set to receive individual payments ranging from a few pounds to about £4,000, accounting for more than 80 per cent of its 85,000 workforce.The cost to the Partnership of these repayments and associated expenses will be around £40 million. This one-off cost will be reported in their half-year results in September. However, it will not be deducted from this year's Partnership Bonus pool. They expect future pensions liabilities to increase by approximately £7m as a result.
Tracey Killen, Director of Personnel, had this to say:
“As soon as we established that we were not implementing the Working Time Regulations correctly, we worked quickly to make the repayments to our Partners in a way that is both fair and responsible.”
The John Lewis Partnership operates 39 John Lewis stores across the UK as well as 295 Waitrose shops and has annual gross sales of more than £9.5 billion.
I think this story reflects just how challenging implementing working time regulations and ensuring compliance can be even for some of the most respected and admired large organisations.
It also highlights just how high the costs can be - in this case a whopping £40 million. Not great PR either. We are still amazed, when we come across companies using manual systems to track this type of critical information. With automated Time and Attendance solutions, monitoring WTD compliance couldn’t be easier. We work with all sorts of companies some using our “Honour Based Attendance Tracking”, designed specifically for organisations where the culture is not to clock, and others our simple “Web Based In & Out clocks”.
You can get more about the working time directive and our automated solutions here