Tesco to increase staff pay by up to 3%

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Tesco is to increase the pay of its UK store-based staff by up to 3% as part of a two-year pay deal.

The retailer will pay its established store workers a base pay rate of up to £7.62 an hour from 3 July 2016.

The increase from the current hourly rate of £7.39 will apply to staff of all ages.

The new rate is 42p higher than the national living wage rate of £7.20 an hour due to come into force for workers aged 25 and over from April.

New store-based employees at Tesco will see their pay increase from £7.02 an hour to £7.20 an hour from March, and then to £7.24 from July.

The organisation has also implemented a new approach to premium payments, which means all staff will receive time and a half for Sunday and bank holiday shifts from July this year. Any employees who are negatively impacted by the changes will be supported with a lump sum transition payment worth 18 months of the difference in their pay.

Tesco established the deal alongside trade union Usdaw and staff representatives.

Matt Davies, chief executive officer at Tesco UK and Ireland, said: “We’ve spent a lot of time working with Usdaw and colleague representatives to understand what’s important to colleagues. Together, we’ve agreed one of the highest pay and benefits packages in retail for store colleagues, and introduced a simpler pay structure, including one approach to premium payments.

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“As well as an increase in pay which puts our hourly rate well above the government’s national living wage, we remain absolutely committed to rewarding our colleagues with a pay and benefits package they really value, including a pension, colleague discount and 5% turnaround bonus.

“I’d like to thank colleagues for their customer focus, passion and hard work in serving our customers a little better every day.”