Tesco to give workers big payrise and boost maternity leave

Tesco said that 97 per cent of staff will be better off under the new terms

The changes mean that the average store employee will get an hourly rate equivalent to £9.52 by November 2018 (Reuters)

Tesco has announced one of its biggest increase in workers’ pay in 10 years and said that it is expanding its maternity benefits over the next two years.

The supermarket, the UK's biggest, said that it will increase hourly rates for store workers by 10.5 per cent between now and the end of 2018, from the current rate of £7.62 to £8.42. Coupled with its benefits package, which includes a colleague bonus plan and a pension package, that will take the average store employee to an hourly rate equivalent to £9.52 by November 2018.

“This reward package sees our biggest investment in store pay for a decade, and gives colleagues a sustainable pay deal that rewards them for everything they do, while allowing us to also attract new talent,” Tesco CEO Matt Davies said.

The company also said that it was enhancing its maternity package from October this year, offering an additional 14 weeks’ half pay for all colleagues. Staff are currently eligible for this if they’ve been at the company for two years. As of July they’ll be eligible after just one year.

Tesco also said that it will continue to offer premium payments for Sunday and bank holiday shifts and said that 97 per cent of staff will be better off under the new terms.

It said that any colleagues negatively impacted by the changes will be supported with a lump sum transition payment worth 18 months of the difference in pay, paid in July 2018.

Earlier this week Tesco announced that it is cutting up to 1,100 jobs in Cardiff amid what it called “unprecedented challenges” for the retail sector.

It said that it would create 250 jobs in Dundee in an attempt to consolidate all of its call centre operations in one location.

Last week, the group reported its strongest quarterly UK sales performance in seven years, despite the increasingly inflationary trading environment.