M&S retail boss wrote to former chancellor George Osborne to defend benefit cuts for staff

Helen Cahill
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Marks & Spencer Christmas Sales Expected To Be Disappointing
Staff have now signed new contracts which incorporate the pay changes (Source: Getty)

M&S management wrote to former chancellor George Osborne this summer as the business was under siege for cutting staff benefits.

In an internal memo seen by City A.M., the retail director of M&S, Sacha Berendji, told staff he wrote to Osborne responding to criticism about cutting premium pay rates for staff.

Read more: M&S shells out £100m for pension changes and payments to ease pay cut pain

M&S announced earlier this year that it would no longer pay employees extra to work on Sundays and bank holidays. Berendji has been responsible for communicating the changes to staff.

In a factsheet sent to staff, M&S said: "Sunday trading has become such a normal part of the working week we don't believe it is something we need to pay a premium for going forward.

"Any savings from the proposed removal of Sunday premiums would be reinvested in the new hourly rate along with significant additional money from the business."

However, MPs have argued this action is a way of cutting benefits and using this to fund the pay rises imposed by the national living wage legislation. Other retailers, such as Morrisons, have slashed premium pay, and it has emerged that John Lewis is considering a similar move.

Osborne has described the behaviour as going against the "spirit of the law". But in a heated parliamentary debate on the issue yesterday, business minister Margot James said 90 per cent of M&S employees will get a higher pay as a result of the changes.

"I make no apology for trying to set the record straight when I feel that a company, or perhaps an individual, in the outside world has been maligned unfairly," she said.

Read more: M&S workers seek unionisation after pay changes and job cuts

Conservative MP James Berry cautioned against introducing any more legislation on wages, saying he worried businesses would become "wrapped up" in layers of regulation.

"I hope this government will continue to criticise employers who do not follow the spirit of the rule, so that we as customers can also take direct action by not shopping at M&S this Christmas if we are not happy about how they treat their staff," Berry said.

Seventy MPs have written to M&S boss Steve Rowe asking him to talk with them about abolishing premiums, but he has declined the invitation.

A spokesperson for Marks & Spencer said: “Over 99 per cent of colleagues have agreed to pay and pension changes which will reward our people in a fair and consistent way, simplify and modernise our business and make our colleagues amongst the highest paid in UK retail. The vast majority will receive higher total pay as a result of the pay changes and nobody need be worse off.”

The company has told employees that any staff who did not sign the new contract by 21 October would not receive the compensation payments given to those affected.

Meanwhile, the business has been considering a move away from clothing.