M&S agrees 'improved' pay deal after row over planned changes

Marks & Spencer today struck a deal with employees over pay and pensions changes after offering “significantly improved” terms in response to a lengthy campaign by staff and MPs.

The agreement, which has been signed off by the retailer’s employee representatives, includes a number of amendments to the proposals first tabled by M&S in May following criticism that long-serving staff were being unfairly punished.

A petition over the issue has attracted over 98,000 signatures, which a group of MPs, led by Labour’s Siobhain McDonagh who raised the issue in parliament in July, handed over to the company at its Marble Arch flagship yesterday.

The new deal still offers the original pay rise to £8.50 an hour for store staff, or £9.65 in Greater London, the removal of Sunday premiums and “standardised” Bank holiday pay of time-and-a-half.

However, there were concessions for the 10% of M&S’s 69,000 retail staff who were set to be worse off under the new terms.

As well as a “transition payment” to compensate staff along with another potential one-off payment to maintain existing remuneration until March 2019, M&S said from that same year, any worker set to see pay fall from current levels would get another additional payment of 50% of their reduction in total pay.

They will be offered guaranteed extra hours to make up the remaining 50% that will amount to no more than three hours a week.

A pensions overhaul to move staff on its “not sustainable” final salary pension scheme to a defined contribution plan is also going ahead, but M&S will extend the cash supplement support from the two years it originally offered to three years.

M&S, which introduced the overhaul in response to the National Living Wage, said the “significantly improved support means that all colleagues will either receive higher pay or the opportunity to maintain current pay level”.

Retail Director Sacha Berendji added: “We’ve listened to our colleagues, acted on their feedback and are pleased that we’ve reached an outcome that gives enhanced support for our colleagues as well as making necessary changes to our business.”

But an M&S employee who has worked at the chain for nearly 20 years, told the Standard the updated deal constituted only a “slight movement” and was “not enough”. He also expressed concern that failure to agree could result in his contract being terminated.

“I love my job and my customers and M&S are better than some. I just feel that we should be the company that benchmarks good practices for others and unfortunately we are not.”

McDonagh added: “What M&S is telling them is that even if they work longer hours to make up the difference, they will earn no more money in three years’ time than they do today. How is that fair?

“It would be a betrayal to loyal staff, many with more than two or three decades professional experience, to say that this is a very good offer for them.”