Tesco say they won't pay London Living Wage at new Streatham store

At last night's public meeting at the Hideaway regarding the progress on the Tesco Hub development, the representative from the supermarket talked about the new jobs it hoped would come to the area as a result of the 24 hour mega-store.

What the net effect will be on employment remains to be seen (there are major concerns that small business on the High Road will suffer further as a result of the competition, as well as employment at other local supermarkets). Certainly, research by the NEF suggests that big chain stores take money out of the local economy.

I got the opportunity to ask about the quality of the new jobs, and specifically whether employees and contractors would be paid the London Living Wage. This is the minimum income considered necessary for a worker to meet basic needs (for an extended period of time or for a lifetime). It is set by the Greater London Authority, and currently stands at £8.55 an hour.

This is of particular interest as we got Lambeth Council to commit to pay the Living Wage to its employees (and finally this year contractors too). But we also discovered that Lambeth had failed to get any reassurances from Tesco in Streatham. This is of particular concern given Tesco's track employment track record of low pay for its workers.

When I asked Tesco last night whether it would commit to paying the London Living Wage it said it would not. What it said however was that the benefits and perks that employees received were "equivalent" to the London Living Wage - in particular its "bonus" scheme for employees.

I have asked Matthew Magee, (@TescoLondon) Regional Corporate Affairs Manager for Tesco, for details about how they calculate this and reach this conclusion. I will update this blog when I receive a response.

However some investigation reveals that the typical bonuses that are given to the lowest paid employees are in the region of £100 a year. For a cleaner on the minimum wage working full time, this equates to around an extra 5p an hour. But that is not the end of the story. The bonus is not earned until an employee has worked there for a year, and even then, the money cannot be accessed for five years. This is in no way equivalent to a London Living Wage. (As an aside, Staff annual turnover at Tesco tends to be around 30%).

Pension contributions can't be considered either as making up an "equivalent" to the Living Wage, as these are a statutory responsibility paid to those on the Living Wage, and are considered in addition to the way the Living Wage is calculated.

So it is very hard to see how this claim by Tesco can be substantiated. When I receive their figures, I will reproduce them below.