Retail organisation Argos is to provide back pay to 37,000 current and former store employees after they were found to have been paid below the statutory national living wage rate prior to December 2016.
The 37,000 affected employees will receive a back-dated payment on 28 February 2017 to cover the unpaid wages. The back pay amounts to approximately £64 per employee, totalling almost £2.4 million.
The back payments were announced by John Rogers, chief executive officer at Sainsbury’s Argos, in a letter to staff yesterday (Thursday 16 February 2017).
The underpayment was discovered during a routine HM Revenue and Customs (HMRC) investigation following Sainsbury’s acquisition of Argos last year. The cause of the underpayment was found to be related to the timings of colleague briefings, which often occurred before an employee’s shift started, and due to security searches, which could happen after an employee’s shift had finished.
Argos has since introduced new processes to avoid a repeat of the issue. In addition, Argos has proposed to give most Argos store staff a 2% pay increase, and increase the basic rate of pay for some staff aged over 25-years-old from £7.20 an hour to £7.66 an hour.
The organisation has also extended discounts on products at Sainsbury’s to Argos staff.
The national living wage is currently set at £7.20 and is due to increase to £7.50 an hour from April 2017. It is the mandatory rate for employees aged 25 or over.
In his letter to staff, Rogers said: “Without doubt, colleagues make the difference to Argos and we are looking at pay and benefits across the business. We are pleased that we have already been able to make a number of positive changes.
“Sainsbury’s prides itself on open communications with colleagues and this includes when things don’t go as we would like, as well as when we are able to celebrate success.”
Dave Gill, national officer at trade union Usdaw, said: “We have been in talks with the [organisation] to get this situation resolved as a matter of urgency. Our members in Argos are clearly disappointed to have been underpaid and we are seeking safeguards to ensure that this cannot occur again.”