Social Governance

Pressure Mounts on Sainsbury's to Pay Living Wage for All Workers

Published on: 27 June 2022 06:05 PM
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The Queen's bank, Coutts & Co, and the Coal Pensions Board have joined a group of investors supporting a resolution urging Sainsbury's to pay all staff and contracted workers the independently set living wage.

The vote at the annual shareholder meeting of the UK's second-largest supermarket on July 7 will be the first time a UK firm board has committed to paying the living wage.

ShareAction, a campaign organisation for responsible investment, stated that the resolution would be a "litmus test for investors' social commitments amid the cost-of-living crisis."

Leading city investors, such as 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 supporting this resolution, which comes at a time when rising inflation is squeezing family budgets.

Sainsbury's has increased pay for its 171,000 direct employees across more than 1,400 locations in the United Kingdom to the independently estimated living wage of £9.90 per hour outside of London and £11.05 per hour in the city. However, the same pledge has not been made to contractors. The retailer outsources vital services such as cleaning and security to companies like Mitie.

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 help attract a high-quality workforce, today and in the future.”

More than fifty per cent of the FTSE 100 are among the more than ten thousand certified living wage firms. However, none of the big supermarkets are among them.

The national living wage, which establishes legal minimum rates, pays £9.50 to individuals over the age of 23, £6.83 to those between the ages of 18 and 20, and £4.80 to apprentices.

Rachel Hargreaves, campaigns manager at ShareAction, stated:

“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.”

As energy and food prices rise, the lowest-paid workers in the United Kingdom are under increasing strain.

According to the Institute for Fiscal Studies, the inflation rate for the year ending in April was 10.9% for the poorest households, three percentage points higher than for those with the highest earnings.

However, the Office for National Statistics in the United Kingdom recently released data indicating that salaries for retail workers climbed by only 3.7% in the year leading up to April.

Sainsbury’s chairman, Martin Scicluna, 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, said:

"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."

Source: The Guardian

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