Following the Christmas trading period, John Lewis staff were delighted to receive a bonus to thank them for all their hard work which saw the department store chain achieving several consecutive weeks of record sales. Now, it seems that the good news for the brand’s employees is set to continue, with executives announcing a further pay top up to come into effect within the next few weeks.
According to a press release, John Lewis has allocated £40 million of “compensation funds” in order to correct mistakes in the payroll over the past seven years – thought to have affected around 69,000 employees. This is because the partnership inadvertently underpaid many staff members for working on Bank Holidays and Sundays.
Head of personnel for the John Lewis Partnership, Tracey Killen, admitted that pay calculations failed to comply with present employment laws, and that this matter is now being addressed as a matter of urgency.
She continued; “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.”
While the amount individual staff members will receive is based upon pay grade and shift pattern, the total repayment amount including National Insurance is thought to amount to around £40 million. Furthermore, although around 50 per cent of the workers in question will receive less than £120, there are many which will enjoy a £1000-plus bonus in their pay cheques later this month.
John Lewis was also keen to emphasise that the redressing of this error will not affect the annual bonus scheme which is shared equally amongst all partners in the company. As staff members become partners upon joining the firm, this will come as a welcome relief to all – especially as the pool last year totalled £210 million shared amongst 84,700 workers.
Employment law partner at Shakespeares, Paula Whelan, claims that John Lewis is not the only employer to make mistakes in pay calculations by far. She believes that legislation such as the Working Times Regulations requires simplification in order to benefit both employees and employers.
She says; “Calculating holiday pay is already a difficult process, which has become more complicated in the past couple of years because case law is no longer consistent with the literal wording of the regulations.
“To aid employers and employees, the time has come to reconsider, amend and potentially simplify the regulations.”
Of course, with John Lewis going from strength to strength, oversights such as in this case are relatively affordable to correct. However, should a small business come up against similar issues, there is no guarantee that a conflict between employers and their workers would have a similar happy ending.
Do you think small businesses would benefit from an alteration in employment law which makes the issue of holiday pay more straightforward?
