Sainsbury’s pressed to join real living wage scheme

Pressure is mounting for Sainsbury’s to ensure all its workers are paid the real living wage.

Sainsbury’s already pays its direct employees more than the real living wage set by the Living Wage Foundation, which is higher than the mandatory National Living Wage.

But if it joins the scheme, the higher rate would be extended to subcontractors like cleaners.

Some investors are supporting a resolution urging them to take the step.

The statutory minimum wage for workers over the age of 23, set by the government and officially known as the National Living Wage, is £9.50 an hour.

The real living wage is £9.90 an hour. The rate is calculated by the Living Wage Foundation based on what people need to live and is recalculated every fall.

If Sainsbury’s were to be formally accredited with the Living Wage Foundation, it would mean the grocery chain committing to increasing wages in line with the Foundation’s rates for years to come.

ShareAction, the group behind the campaign for a new supermarket wage policy, said there were “compelling moral reasons” to offer all employees, including contract workers, the higher rate. There is also a “clear business case for employers,” ShareAction said, at a time when companies are competing to hire and retain staff.

Shareholders will vote on the resolution at Sainsbury’s annual general meeting to be held on July 7th.

Investors already supporting the decision, including Legal & General Investment Management and the National Employment Savings Trust (Nest), have joined the Coal Pensions Board and wealth management firm Coutts and Co.

Leslie Gent, head of responsible investing at Coutts, said that while Sainsbury’s has made “positive progress” in aligning real living wage rates for its direct employees, moving to full accreditation with the Living Wage Foundation would help ” to set a standard for all UK supermarkets”.

In March, Sainsbury’s raised its basic wage rate for staff in its supermarkets and Argos stores to £10 an hour, with higher rates in London.

This makes it one of the best-paid companies in the industry. Budget supermarkets Aldi and Lidl pay more per hour and Morrisons also pays £10 per hour. Tesco has said it will pay £10.10 an hour from the end of July.

A spokesman for Sainsbury’s said the “vast majority” of its subcontractors are already paid at real living wage levels, but the difficulty lies in making a longer-term commitment to pay the rates set by the foundation.

“We fundamentally believe that we must retain the right to make independent business decisions, not made by a separate body, to effectively balance the needs of our customers, colleagues, suppliers and shareholders,” she said.

“As we balance the needs of all our stakeholders, particularly with the current cost of living challenges many people in the UK are facing, it is vital that we not only pay our colleagues fairly, but also in the are able to invest significantly and offer customers great added value.”

Other major shareholders of the company have said they support the company and will vote against the resolution.

Schroders’ Kimberley Lewis said Sainsbury’s has already met its expectations in terms of paying a fair living and other welfare benefits. The wealth management company, one of Sainsbury’s largest investors, is itself accredited with the Living Wage Foundation.

But Ms Lewis said Schroders believes passing the resolution would hurt the supermarket’s prospects.

“We strongly believe that, particularly in this environment, this could impact Sainsbury’s ability to remain competitive e.g. B. by making it harder to keep prices down on essentials,” Ms Lewis wrote in a blog.