John Lewis Partnership chairman Sir Charlie Mayfield admits pay changes in retail aren’t a “genuine move forward”
The chairman of the John Lewis Partnership, Sir Charlie Mayfield, has admitted that the response to the national living wage from retailers has not been a "genuine move forward" for their employees.
Following the introduction of the new national living wage, several retailers have cut staff benefits while increasing basic pay rates. Minutes from a John Lewis Partnership meeting seen by City PM show Mayfield cautioned staff that "competitors would continue to seek the most favourable press coverage for pay increases that are often more of a shift in benefits than a genuine move forward."
Read more: M&S shells out £100m for pension changes and payments to ease pay cut pain
One member of the the John Lewis' management team used Morrisons as an example of a company that had cut staff benefits, such as paid breaks, and put the money towards funding wage increases imposed by the national living wage legislation.
Marks and Spencer has also increased basic pay rates for its staff, while removing some staff benefits, such as extra pay – also called premium pay – for working on Sundays.
Following these changes from other retailers, Mayfield told John Lewis staff in July that some of the company's premium pay arrangements were "increasingly out of line with the market". Waitrose will cut paid breaks for its new staff from January 2017, and other benefits at the department store are under review.
Read more: John Lewis Partnership considers further reforms to staff benefits
Earlier this year, Waitrose cut overtime and Sunday pay for new employees. The business expects the move will save £3-4m this year, and £60-70m over the next five years.
MPs have criticised the strategy from retailers in a recent parliamentary debate. Conservative MP James Berry said that removing staff benefits in response to the national living wage was not in "the spirit of the rule".
The John Lewis Partnership declined to comment.