Retail

Sainsbury’s under new pressure to pay living wage for all workers


The Queen’s bank, Coutts & Co, and the Coal Pensions Board have joined a group of investors backing a resolution calling for Sainsbury’s to pay the independently set living wage for all staff and contracted workers.

The vote at the UK’s second-largest supermarket’s annual shareholder meeting on 7 July will be the first resolution committing a UK company board to pay the living wage.

ShareAction, the responsible investment campaign group, said the resolution would be a “litmus test for investors’ social commitments amid the cost-of-living crisis”.

Leading City investors including HSBC, Legal & General Investment Management and Fidelity International as well as retirement fund Nest and the Brunel Pension Partnership are already part of the coalition behind the resolution which comes as family budgets are squeezed by surging inflation.

Sainsbury’s has raised pay for its 171,000 direct employees across more than 1,400 stores in the UK to the living wage, which is independently calculated for the Living Wage Foundation charity, of at least £9.90 an hour outside London or £11.05 in the capital. However, it has not made the same commitment to contractors. Outsourcing companies such as Mitie provide essential services such as cleaning and security to the supermarket.

Leslie Gent, the head of responsible investing at Coutts & Co, said: “We recognise the positive progress made by Sainsbury’s to match the living wage for its directly employed staff. As a living wage employer ourselves we believe that this accreditation would set a standard for all UK supermarkets, and would provide the certainty and transparency that helps attract a high-quality workforce, today and in the future.”

More than half of the FTSE 100 are among the more than 10,000 accredited living wage employers. However, none of the big supermarkets are among them.

The government’s national living wage, which sets legal minimum rates, pays £9.50 to those aged 23 and over, before dropping to £6.83 for those aged 18 and over, and £4.81 for apprentices.

Rachel Hargreaves, campaigns manager at ShareAction said: “There is no excuse for a highly profitable company with multimillion-pound executive salaries refusing to guarantee all its staff, including subcontracted workers, a basic standard of living.”

With energy and food costs on the rise, the UK’s lowest paid workers are under particular pressure.

The Institute for Fiscal Studies has reported that the poorest households faced inflation in the year to April of 10.9%, three percentage points higher than top earners.

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However, the Office for National Statistics in the UK recently shared data showing wages for retail workers have increased just 3.7% in the year to April.

Sainsbury’s chairman Martin Scicluna, a former boss of the accountants Deloitte, has written to all shareholders, asking them to vote against the resolution. He argued that the firm’s pay rates were already higher than many of its competitors and that, “Accrediting as a living wage employer would mean that a third party – the Living Wage Foundation – would decide our colleague pay changes each year … We believe it is right for the company and our stakeholders to make independent decisions regarding pay and benefits, rather than have them determined by a separate external body.”

Tesco’s chairman John Allan employed a similar argument when asked about the UK’s largest supermarket chain accrediting to the living wage at its annual shareholder meeting on 17 June. He said Tesco tried to set wages via negotiations with trade unions adding: “We are very concerned about making a commitment to a living wage and putting our wage structure at the mercy of a decision by a third party,” he told shareholders at the meeting.



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