Tesco lifts pay for store staff but cuts overtime and Sunday rates

Supermarket Tesco announced a pay rise of up to 3.1% for staff at its UK stores, bringing the hourly rate to £7.62 per hour, by cutting overtime and pay for working on Sundays and Bank Holidays.

Tesco said the two-year deal, which kicks in on 3 July across all age groups, includes an increase in the base rate of pay for all store workers.

Staff will continue to benefit from a benefits package that includes a pension, colleague discount and a 5% turnaround bonus.

As part of the deal agreed with the Union of Shop, Distributive and Allied Workers (Usdaw), Tesco has also introduced what is called a "simpler and fairer" approach to premium payments, meaning all staff will receive time and a half for Sunday and bank holiday shifts from July.

Pay for Sundays and Bank Holidays, late nights and overtime hours will be trimmed heavily to help pay for the increases elsewhere, such that staff who used to receive double time for Sundays and Bank Holidays but will now be paid time-and-a-half from July.

Any staff negatively impacted by the changes will be given a lump sum transition payment worth 18 months of the difference in pay.

Matt Davies, chief executive of Tesco in the 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 and fairer pay structure, including one approach to premium payments.”