Tesco members of Mandate Trade Union lodged a claim for improvements to pay and conditions of work for all Tesco workers on Wednesday, 3rd April 2019.
The claim would dramatically improve living standards for Tesco workers, including pay increases, fairer scheduling, full time jobs and a voice at work.
Pay Increases & The Living Wage
All new employees in Tesco start on an hourly rate of €10.56, but where an employer can afford it, like Tesco, workers should be paid the Living Wage of €11.90 per hour.
The Living Wage is determined by an independent technical group comprising of researchers, academics and economists and it seeks to “provide an adequate income to enable individuals to afford a socially acceptable minimum standard of living.”
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, most Tesco workers’ wages have only grown by 8%.
The Living Wage has already been paid by some of Tesco’s competitors including Lidl, Aldi and IKEA. Tesco can easily afford to pay it too.
Two separate surveys of thousands of Mandate members in Tesco indicated that “pay equality” is at the top on their agenda, with more than 90% supporting it. In order to achieve pay equality, we need to move workers towards one pay scale, as proposed by Mandate below.
While Tesco management would prefer to harmonise workers’ pay downwards, which is already on their agenda (see pre-1996 dispute), the 2019 Pay & Benefits Claim would move all workers up to the highest point on the pre-2006 pay scale of €15.49 per hour. When you factor in a pay increase for 2019, that figure becomes €16 per hour.
What does this mean for you? Here are a few examples.
- If you were employed after 2006 and you work 30 hours per week, it will mean an extra:
- + €3.05 per hour
- + €91.50 per week
- + €4,758 per year.
- If you were employed before 2006 and you work 35 hours per week, it mean an extra:
- + €0.51 per hour
- + €17.85 per week
- + €928.20 per year
Here’s a chart that should help any post 2006 workers to calculate what increase you would be entitled to should the claim be successful.
|Hourly benefit||20 hours||25 hours||30 hours||35 hours||40 hours||Potential annual benefit|
Is the Claim affordable for Tesco Ireland?
Tesco do not disclose their profits in Ireland. Instead they hide them within their UK figures. However, we can estimated profits using data from the Central Statistics Office and Eurostat, while also taking into account how they are doing across the UK and Ireland combined.
One indicator of how the company is doing is contained in a newspaper headline on 11th April 2019:
“Tesco’s £2.2bn profit beats expectations on turnaround.”
The article continued:
“Releasing full-year results, Tesco said that its sales rose 11.3% to £56.9bn (€66.1bn) in the 12 months to February on a constant currency basis, while its operating profit surged 33.5% to £2.2bn (€2.5bn).”
In Ireland, its retail revenue, came to €2.68bn for 2018, compared to €2.57bn in the previous year, an extra €110 million.
The Irish chief executive, Kari Daniels, said the company had “increased volumes, transactions and basket sizes.”
So who is benefiting from these improvements? It seems senior executives are taking more than their fair share of the profits.
Earlier this month it was annouced that Tesco’s CEO Dave Lewis earned €5.21 million in 2018. For context, it would take a Tesco Ireland worker more than 200 years to earn what the CEO earned in just one year. That’s obscene.
As for shareholders, they’re also getting their cut. Another article published in April stated: “Tesco doubles annual dividend as profits surge by a third.”
It is estimated that the company is generating between €250m and €370m in profit from its Irish operations. The full cost of implementing the Pay and Benefits Claim would come to approximately €37m, meaning the company would be required to share only 10-15% of its profits with its workers.
It is clear that Tesco is a highly profitable employer, generating enormous profits, dividends and generous pay packets for its executives, so it can certainly share some of those profits with its workers if it wished to. It won’t succumb without pressure from union members though.
Tesco’s strategy to date has been to divide workers and play one group against the other. They pitted pre-1996 workers against post-1996 workers where they are refusing to pay some workers an 8% pay increase.
Once Tesco have finished with this group of workers, they will go after the next cohort, the pre-2006 group who now earn €1.18 per hour more than the pre-1996 workers. After that, it’s the post-2006 group.
The Pay & Benefits Claim for 2019 is fair and achievable provided all workers stay united in their Union. Of course management will tell you that it is not possible. Obviously it’s in their interests to keep workers’ pay low. They will probably offer a 2% or a 3% pay increase which is entirely insufficient for a company making the enormous profits that Tesco are.
If you believe Tesco workers are entitled to better pay and conditions of employment, and you support the Pay & Benefits Claim for 2019, you can click here to express your support.
Together we are stronger.