When a pay rise becomes a Pay Cut
B&Q is driving down costs – by cutting staff pay
B&Q has written to its shopfloor staff saying it intends to raise basic pay to £7.66 per hour from 1 April 2016. At present, some staff earn the minimum wage of £6.70. The new pay rate is 46p an hour more than the “national living wage” being introduced by George Osborne. The “national living wage” only applies to over 25s. It is well below the £8.25 living wage calculated by independent campaigners.
In the run-up to the introduction of the Living Wage B&Q has announced how it tends to pay for it – by cutting staff pay! The company has announced that Sunday pay will be cut. It also plans to reduce bank holiday pay rates for some workers. The company has also announced that it will remove a long service reward which, in some cases, is equivalent to one month’s pay per year for staff. Staff who currently receive double time for working Sundays will now only receive time and a half.
B&Q is one of a number of large retailers who announced plans to cut back on extra remuneration for people working unsocial hours, in order to fund the living wage increase. Tesco and Wilkinson’s have announced similar changes. Morrisons was one of the first companies to cut staff terms and conditions of employment. Morrison’s has cut Sunday pay and paid breaks.
B&Q is trying to introduce the change without consulting trade unions. It has bypassed the trade unions by trying to consult directly with its employees via staff members elected to its National Peoples’ Forum.
The company has said that it believes that 90% of its shop-floor workers would see an increase in their basic pay. The company has not however disclosed how many staff will see that pay reduced.
One person who will escape the pay cut is Veronique Laury, chief executive of B&Q’s parent company Kingfisher. While her pay will not rise with the introduction of the “national living wage”, she will earn a basic salary of £700,000 (without overtime pay). She could have a total pay package of £3.6m which may go some way to compensate for the lack of overtime pay.