Sainsbury's ups staff pay in £100m investment but some workers will be worse off

The changes announced on Tuesday will take the basic rate of pay well above the current national living wage of £7.50 for over 25s and £7.05 for 21 to 24 year olds. Staff working in zones 1 and 2 in London will see an increase to £9.80 an hour, which is below the London living wage of £10.20.

The move follows three consecutive years of 4% pay increases, bringing the total rise in the base rate to 30% over the past four years.

Sainsbury's said that 130,000 of its staff will be put on new contracts, "ensuring consistency and fairness across all stores, regardless of age or length of service".

The company also announced plans to streamline operations by moving 22 specific roles to five: trading assistant, food services assistant, online assistant, GM and clothing assistant and services assistant. It will also be axing bonuses and paid breaks and said the changes will mean that "a small proportion of colleagues may be adversely impacted".

Retail and operations director Simon Roberts said: "The retail sector has never been more competitive and we know that our customers really value our colleagues and the excellent service they provide in our shops.

"Which is why we think it is so important to invest further in our colleagues so they feel rewarded and motivated to do the best possible job for our customers every day. We expect the best from our teams and that’s why we’re committing to a leading rate of pay. Great pay for great work.

"Together with our recent proposals to change our management structure in stores, we believe the proposed changes will set us up to run the best shops in the industry, delivering the best possible service for our customers."

Joanne McGuinness, the national officer for shop workers' union Usdaw, said: "While this is welcome news for Usdaw members working in Sainsbury’s we will be looking closely at the whole deal, as we understand the company are proposing some contractual changes.

"Consolidating pay can benefit staff, but we want to check the effects on all individual workers. We will now enter into talks with the company."

Meanwhile, union Unite warned that many workers at the supermarket giant would be worse off.

It pointed out that the company's proposal to lift pay to £9.20 an hour for workers at its 1,400 stores from September would be eroded by things such as the removal of premium pay for Sunday working.

Unite acting national officer for food and drink Bev Clarkson said: "We are in a classic ‘robbing Peter to pay Paul’ situation, which we don’t think will benefit our members in the long-run.

"Sainsbury’s has announced its intention of increasing the basic rate of pay to £9.20 per hour from September 2018. This would take their rate to the highest in the industry which Unite welcomes as a positive move for our members.

"However, there will be no further increase in salary until 2020 and given what our members have been asked to give up in return for this headline rate, the overall package doesn’t look that attractive.

"Our members will have to make a number of 'sacrifices' to secure this rate of pay which includes the removal of paid breaks and Sunday premium pay, as well as a number of changes to the attendance policy."

Unite, which will be holding a consultative ballot for its members at the end of the month, said these "strings" will offset any rise in basic pay.

"We are recommending rejection and will decide on the next steps after our members have expressed their views in the consultative ballot, which should be known by the end of April."