Your pay and benefits claim explained

Last April 2019, Mandate Trade Union lodged your claim for improvements to pay and conditions for all Tesco Ireland workers.

Despite more than 7,000 Tesco members backing the claim , management have completely ignored it.

Since then the company has instead made changes to pay without consulting you or your Union.

Last October Tesco decided you should only receive a 2% pay increase, and again this year they’ve decided you only deserve 2% while removing the 10% risk payment you were receiving for being an “essential worker” during COVID-19.

The question now needs to be asked, is the risk completely eradicated, or are you just not an “essential worker” anymore?

Your pay and benefits claim, if delivered, would significantly improve living standards for all Tesco workers, including pay increases, better & fairer scheduling, full time jobs and a voice at work.

Pay increases & The Living Wage

Currently there are three pay scales in Tesco Ireland depending on the year you were employed:

Year of employment Pre-1996 1997-2006 2006-present
Est. Number of workers 178 3,300 6,000
Top rate of pay €14.89 €16.12 €13.47

All new employees in Tesco start on a rate of €10.99 per hour, but it is Mandate’s belief that where an employer can afford it, workers should be paid the Living Wage of €12.30 per hour.

This figure is determined by an independent technical group comprising of researchers, academics and economists which seeks to “provide an adequate income to enable individuals to afford a socially acceptable minimum standard of living.”

The Living Wage has already been paid by some of Tesco’s competitors including Lidl, Aldi and IKEA. And the fact is, Tesco can certainly afford to pay it too (see below).

As we all know, the cost of living in Ireland is extremely high, with housing costs rising by more than 80% since their lowest point in 2013. Meanwhile, Tesco workers’ wages have only grown by 12%.

Two separate surveys of thousands of Mandate members in Tesco indicated that “pay equality” is very high on the agenda of workers with more than 90% saying they support it . The 2019 pay & benefits claim includes one new equal payscale which rewards workers for their loyalty and their experience.

While Tesco management would prefer to harmonise worker’s pay downwards, the 2019 Pay & Benefits Claim would give all workers the opportunity to move to the highest point on the pay scale. When you factor in a pay increase for 2020, that figure becomes €16.30 per hour.

What does this mean for you? Here are a few examples.

  • For example if you were employed in 2012 and you work 30 hours per week, it will mean an extra:
    • €2.83 per hour
    • €84.90 per week
    • €4,414 per year.

Here’s a chart that should help any post 2006 workers calculate what increase you would be entitled to should the claim be successful, including the annual benefit based on the hours they work.

Screenshot 2020-06-22 at 10.33.53

Scheduling & hours

Pay rates are only one part of your weekly wage. Having secure hours and fair rostering is just as valuable. Your claim, based on feedback from Tesco members, is to seek fairer scheduling for a better work/life balance including greater certainty over working patterns and 4-week advance notice of rosters.

Is the claim affordable for Tesco Ireland?

Tesco do not disclose their profits in Ireland. The profits are, however, lumped in with the profits obtained in the UK. This gives us some information on how the business is doing across the two islands, but all indicators show Ireland is a far more profitable jurisdiction than the UK, so these figures are conservative estimates on how the business is doing.

Revenue & Sales

Tesco’s revenue across the UK & ROI has increased by 23% since 2016 – from £43bn to £53bn. Sales have also increased by 23% from £37bn to £45.7bn with an extra £8.5bn rolling through the cash registers.

Revenue

Sales

Profits

The profits for the UK & ROI is where we see a real indication of how the company is doing. Between 2016 and 2020 the company has increased its operating profit by a staggering 226% – from £597m in 2016 to £1,944m (€2.15bn) in 2020.

Operating Profit

When you factor in Tesco has an extra 225 stores now compared to 2016, yet those stores operate with 14,610 less full-time equivalent workers, it means workers are doing more work and generating more revenue for the company than ever before.

No of stores

With the reduction in staff and the increase in profits combined, we see that the company went from a profit per employee in 2016 of £2,648 to £9,223 (€10,235 per employee). That’s an increase of almost 250%.

Profit PFTE

Dividends

The company’s success has led to rewards. Unfortunately those rewards are not being shared adequately among workers, but are instead being distributed to shareholders and to senior management.

While there was no dividend issued in 2016 or 2017, since then, shareholders have had a massive increase in their rewards. Dividends increased from £3 per share in 2018, to £5.77 in 2019 and now £9.15 for 2020 (a 205% increase in three years).Dividend

To give you an idea of the impact this has, it means almost £900m in dividends is being paid out this year. That’s almost one billion euros.

Screenshot 2020-06-22 at 11.15.48

From Tesco Annual Report

Executive pay

While workers received small pay increases in recent years, they simply do not compare with executive pay, either in percentage terms of in real terms.

Tesco CEO Dave Lewis received a 17.5% pay increase in 2017, moving his remuneration up to £4.9m (€5.4m).

Only a number of weeks ago, it was announced that Mr Lewis received a further 39% increase in pay bringing his salary up to £6.42m (€7.1m). That’s an overall pay increase of 59% in three short years.

The Tesco CEO now earns 355 times the wage of his lowest paid employee in the UK and 327 times the wage of the lowest paid employee in the Republic of Ireland.

COVID19

While the full impact of COVID is yet to be seen, what we do know is that “overall grocery sales increased by a whopping 25.4% over the 12 weeks leading up to May 17, the fastest rate of growth recorded in more than 15 years.” The same figures show that alcohol sales are up 93%.

An earlier analysis showed that Tesco’s sales increased by 16.7% up to the 19th April, compared to the same period last year.

Kantar’s most recent analysis states: “Tesco also recorded formidable sales growth this month.  Its typically larger stores allowed it to capitalise on the increase in trolley shops and the grocer grew by 23.7% to hold 21.8% of the market.”

So it seems Tesco has weathered the COVID19 financial storm quite well.

Mandate Pay Claim

Mandate estimates that Tesco is generating between €250m and €370m in profit from its Irish operations. The full cost of implementing the pay and benefits claim, including increases in Employers’ PRSI, would come to approximately €27m, meaning the company would lose approximately 10% of its profits while its workers, the people who generate those profits, would experience drastic improvements to their living standards.

Remember, Tesco is paying a dividend to shareholders this year worth €1bn, or 27 times the amount this pay claim would cost.

We believe this is a fair and realistically achievable claim, should all workers stay united in their union and be prepared to take action if necessary. Of course, management will tell you that it is not possible. It’s in their interests to keep your pay low because the lower you’re paid, the more that’s in the pot for management.

Next steps

If you believe you and your colleagues are entitled to better pay and benefits at Tesco Ireland, and you support pay equality, better scheduling, the implementation of full time contracts and respect for your right to trade union representation, please take Mandate’s feedback survey by clicking here and reaffirm your belief that together we should pursue this pay claim.

Together we are stronger.

www.joinmandate.ie

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