Sainsbury’s under new pressure to pay living wage for all workers

Queen’s bank Coutts plus Coal Pensions Board join others such as LGIM and HSBC backing resolution for £9.90 an hour

The Queen’s bank, Coutts & Co, and the Coal Pensions Board have joined a group of investors backing a resolution calling for Sainsbury’s to pay the independently set living wage for all staff and contracted workers.

The vote at the UK’s second-largest supermarket’s annual shareholder meeting on 7 July will be the first on a resolution committing a UK company board to pay the living wage.

ShareAction, the responsible investment campaign group, said the resolution would be a “litmus test for investors’ social commitments amid the cost-of-living crisis”.

Leading City investors including HSBC, Legal & General Investment Management and Fidelity International as well as retirement fund Nest and the Brunel Pension Partnership are already part of the coalition behind the resolution that comes as family budgets are squeezed by surging inflation.

Sainsbury’s has raised pay for its 171,000 direct employees across more than 1,400 stores in the UK to the living wage, which is independently calculated for the Living Wage Foundation charity, of at least £9.90 an hour outside London or £11.05 in the capital. However, it has not made the same commitment to contractors. Outsourcing companies such as Mitie provide essential services such as cleaning and security to the supermarket.

Leslie Gent, the head of responsible investing at Coutts & Co, said: “We recognise the positive progress made by Sainsbury’s to match the living wage for its directly employed staff. As a living wage employer ourselves we believe that this accreditation would set a standard for all UK supermarkets, and would provide the certainty and transparency that helps attract a high-quality workforce, today and in the future.”

More than half of the FTSE 100 are among the more than 10,000 accredited living wage employers. However, none of the big supermarkets are among them.

The government’s national living wage, which sets legal minimum rates, pays £9.50 to those aged 23 and over, dropping to £6.83 for those aged between 18 and 20, and £4.81 for apprentices.

Rachel Hargreaves, a campaigns manager at ShareAction, said: “There is no excuse for a highly profitable company with multimillion-pound executive salaries refusing to guarantee all its staff, including subcontracted workers, a basic standard of living.”

With energy and food costs on the rise, the UK’s lowest-paid workers are under particular pressure.

The Institute for Fiscal Studies has reported that the poorest households faced inflation in the year to April of 10.9%, three percentage points higher than top earners.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

However, the Office for National Statistics in the UK recently shared data showing wages for retail workers increased just 3.7% in the year to April.

Sainsbury’s chairman, Martin Scicluna, a former boss of the accountants Deloitte, has written to all shareholders, asking them to vote against the resolution. He argued that the firm’s pay rates were already higher than many of its competitors, and said: “Accrediting as a living wage employer would mean that a third party – the Living Wage Foundation – would decide our colleague pay changes each year ... We believe it is right for the company and our stakeholders to make independent decisions regarding pay and benefits, rather than have them determined by a separate external body.”

Tesco’s chairman, John Allan, employed a similar argument when asked about the UK’s largest supermarket chain accrediting to the living wage at its annual shareholder meeting on 17 June. He said Tesco tried to set wages via negotiations with trade unions. “We are very concerned about making a commitment to a living wage and putting our wage structure at the mercy of a decision by a third party,” he told shareholders at the meeting.

Contributor

Sarah Butler

The GuardianTramp

Related Content

Article image
Investors call for Sainsbury’s to pay workers ‘real living wage’
Campaign launched to make company first supermarket group to pay milestone figure of £9.90 an hour

Rupert Jones

27, Mar, 2022 @11:01 PM

Article image
Living wage campaigners claim progress after vote at Sainsbury’s AGM
One in six shareholders back resolution to extend living wage to indirectly employed cleaners and security guards

Sarah Butler

07, Jul, 2022 @4:29 PM

Article image
Sainsbury’s to pay at least £11 an hour for 127,000 lowest-paid workers
Third pay increase in year gives staff 7.3% rise amid fierce competition to retain and recruit employees

Sarah Butler

04, Jan, 2023 @12:34 PM

Article image
Singling out Sainsbury’s over the living wage may not be that pragmatic | Nils Pratley
A shareholder resolution at one retailer is an imperfect weapon for a scrap over pay that really relates to sector-wide issues

Nils Pratley

05, Jul, 2022 @6:13 PM

Article image
Argos to pay £2.4m to 37,000 workers paid less than minimum wage
Retailer has been fined £1.5m by HMRC after asking staff to undergo briefings and security checks outside paid working hours

Sarah Butler

16, Feb, 2017 @5:47 PM

Article image
Asda under pressure after pay rise lags behind Tesco and Sainsbury’s
UK’s third largest supermarket only big chain to pay shop floor workers less than independently verified living wage

Sarah Butler

08, Apr, 2022 @3:28 PM

Article image
Living wage campaigners ask tough questions of Britain's big retailers
Next shareholders pressed at annual meeting on how company will ensure staff earn enough to have a good standard of living as fair pay drive begins

Sarah Butler

14, May, 2015 @5:50 PM

Article image
Sainsbury’s CEO’s pay triples to £3.8m as firm rejects living wage calls
Supermarket faces vote from investors to pay a living wage to all workers, including contractors

Jasper Jolly

06, Jun, 2022 @4:59 PM

Article image
Aldi to become UK's 'best-paying supermarket' with wage rise
German discounter to raise hourly rate to £9.40 and to £10.90 for staff within M25

Joanna Partridge

21, Jan, 2020 @6:19 PM

Article image
Real living wage rise puts pressure on UK government to raise minimum wage
Living Wage Foundation’s minimum rate rises by 40p to £9.90 an hour, largely due to higher fuel costs and rents

Joanna Partridge

15, Nov, 2021 @12:01 AM