John Lewis pays £40m to staff after pay error

 
Kasmira Jefford
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AROUND 69,000 John Lewis staff will share a £40m windfall this month after the retailer discovered an error in the way it calculated pay for Sundays and bank holidays.

The firm said yesterday it had discovered that employees who were entitled to premiums for working on Sunday or bank holidays “had not been paid correctly under the Working Time Regulations legislation”.

Over half of the partners will receive less than £120 but some could be awarded “several thousands” from years of underpayment dating back to 2006.

A spokesperson for the department store said that it had uncovered the blunder after an employee, who recently joined from another company, had raised the issue.

“We periodically review our holiday pay policies but it also was raised by one of our partners at a similar time,” he told City A.M.

John Lewis said the £40m figure, which includes the repayments plus national insurance and other associated costs, will not impact the annual bonus pool but will add an extra £7m to the partnership’s pension deficit.

It will also be recognised as a one-off item in the retailer’s half-year results published next month.

John Lewis is Britain’s largest example of co-ownership where all 85,500 staff are partners in the business.

Paula Whelan, an employment law partner at law firm Shakespeares, called for working time regulations to be reviewed.

“Calculating holiday pay is already a difficult process, which has become more complicated in the last couple of years because case law is no longer consistent with the literal wording of the regulations,” Whelan said.