· 2 min read · News

Pandemic's low pay to have long-lasting effect on retail

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UK supermarket workers have been most effected by low earnings since the outbreak of the pandemic, according to The Living Wage Foundation.

The foundation’s analysis of Office for National Statistics data found 45% of non-specialised retail workers, such as supermarket employees, have earned below the living wage- £9.50 outside London and £10.85 in London. 

As more equal pay tribunals are beginning to be brought against large retail chains like Asda and Co-op, there may be long-term repercussions if retail workers continue to be underpaid. 

 

Equal pay

On Friday (26) the Supreme Court ruled Asda’s retail staff, who are mostly women, can compare their work to those in warehouse distribution centres.

Over 44,000 shop workers argued they should be paid the same as the predominantly male staff who work in the chain’s depots. They earn on average £1.50 to £3 an hour more than the shop workers.

The victory for Asda workers could see the supermarket chain face a £500 million compensation claim.

Jane Amphlett, partner at law firm Howard Kennedy, said the impact of the Supreme Court’s decision goes beyond the claimants. 

She told HR magazine: “The result means that large employers can't avoid equal pay obligations if male and female-dominated roles are based at different locations.  

“Equal pay cases have historically been seen as a public sector issue, but private sector businesses cannot assume they're immune, particularly as social media is now used to recruit claimants for mass claims and crowdfunding can be used to fund them.” 

Amphlett said Asda's staffing model is far from unique and other large retailers are likely to face claims.

“Cases against Tesco, Sainsbury's and Morrisons are already afoot," she said.

 

Impact of COVID-19

Suzanne Horne, partner and head of the international employment practice at Paul Hastings, said the retail sector has been decimated by a perfect storm, both in the acceleration in changes to shopping habits and the closure of retail outlets from the lockdowns.

She told HR magazine: “Even John Lewis has recently announced some stores will simply not re-open.

The judgment against Asda means that we are likely to see more claims of this kind, with greater prospects of success, potentially giving rise to truly material liabilities in this sector.”

Horne said this may be the death knell for some retailers.

She said: “As employers navigate new paths to growth coming out of the pandemic, it is likely that the increasing use of automation and tech, will mean Amazon Go’s cashier-less supermarkets are the future of the sector.”

Laura Gardiner, director, Living Wage Foundation, said retail workers who have been the backbone of our businesses and society during successive lockdowns must be safeguarded.

Speaking to HR magazine, Gardiner added: "Paying the real Living Wage is not only the right thing for employers to do, but also increases staff motivation and productivity, and reduces staff turnover.

"The experience of this pandemic should prompt British firms to rethink how they value essential workers, with a first step being employers in key worker sectors signing up to pay the Living Wage to all staff.”