Thousands of workers could lose their job at Marks & Spencer if they do not agree to changes to their pay and pensions, according to an MP.
Siobhain McDonagh, the Labour MP for Mitcham and Morden, said a leaked document from M&S showed the clothing and food retailer was prepared to cut in-store jobs if employees did not accept new terms.
The internal document, headlined “pay and pension changes”, refers to a “collective consultation for dissenters if required”. A timetable shows the consultation beginning on 14 November and the notice period for staff starting on 19 December, just days before Christmas.
However, the retailer insisted that it did not want any employees to leave and the consultation was just one option being considered. Under this plan, staff who have reject the new conditions would have their existing contracts terminated and then be offered a new contract with the new terms.
A spokesperson for M&S said: “The company has no intention that anyone would leave as a result of these changes. The changes, which will take effect from April, 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. Nobody need be worse off and the vast majority will receive higher total pay.”
Long-serving shop staff fear they could face pay cuts that could potentially cost thousands of pounds after M&S removed premiums for working Sundays and antisocial hours, trimmed bank holiday payments and changed pension payments. McDonagh said 2,700 staff would lose more than £1,000 a year and 700 would lose more than £2,000.
The retailer claims 90% of its 69,000 staff will be better off from the pay changes. Approximately 11,000 workers will be affected by the pension overhaul, under which those in the defined benefit scheme will no longer earn new benefits.
The retailer said it was making the changes to help pay for a 15% increase in basic pay for its 69,000 workers from April to £8.50 an hour.
In response to criticism of the move, M&S has improved its offer to staff so everyone will either receive higher pay or have the opportunity to maintain their current pay level through top-up payments and working more hours.
M&S has pledged to top-up the pay of those affected to 2015-16 levels for two years. Any employee whose pay in 2019-20 is still lower under the new regime will receive an additional top-up payment representing 50% of that shortfall in total pay and be offered guaranteed extra hours to make up the remaining 50%.
However, McDonagh has criticised this offer, claiming that utility bills, rent and travel costs are likely to be higher by 2019 and 2020.