Morrisons will pay its supermarket staff at least £10 an hour, becoming the first major UK supermarket to reach that milestone.
The new deal will start in April and represents a significant pay increase for nearly 96,000 colleagues, the majority of which will see a nine per cent rise.
Staff had pushed for an increase in the hourly rate over the grocer’s annual discretionary bonus.
The Bradford-based supermarket giant’s current minimum hourly pay is £9.20 per hour, sbut has risen 46 per cent increase since 2015.
In addition to the hourly pay increase, Morrisons will pay a London weighting.
Rates for inner London will be 85p per hour and for outer London 60p per hour, an increase on the previous 75p and 50p respectively.
Three quarters of the cost of the increase will be met by direct payroll investment and a quarter through altering the discretionary annual colleague bonus scheme.
Colleagues had voiced their preference to have a guaranteed hourly rate amount and receive it more regularly, so the annual budget for the bonus scheme is now being rolled into staff’s wages, which is paid every four weeks.
The pay deal is subject to a ballot opening on 27 January and closing on 7 February, with the final results announced on 12 February.
David Potts, Morrisons CEO, said: “It’s a symbolic and important milestone that represents another step in rewarding the incredibly important work that our colleagues do up and down the country.
“Over the last year we have seen renewed and widespread appreciation in the UK for our colleagues who have had an incredibly tough 2020, working tirelessly so Britain could eat well and shop safely throughout the pandemic.
“Morrisons colleagues have earned their status as key workers, and this pay increase, many times over.”
Joanne McGuinness, Usdaw National Officer, said: “The new consolidated hourly rate is now the leading rate of the major supermarkets, which is paid every hour and removes the uncertainty of a bonus payment.
“It is a big step forward and shows that Morrisons is prepared to invest in its staff to help grow the business and I hope that the deal is supported by our members in the ballot.
“It has been a tough time for food retail staff who have worked throughout the pandemic in difficult circumstances.
“They provide the essential service of keeping the nation fed and deserve our support, respect and appreciation.”