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British supermarket giant Sainsbury's is boosting its rate of basic pay to well above the national minimum wage, while also offering all its 130,000 staff new, 'fairer', contracts.
Sainsbury's says its basic pay rate will jump by £1.20 an hour to £9.20 - £9.80 for staff in London - which will be funded by cost savings within the business. The chain says it plans to invest £100 million in its employees this year.
Sainsbury's 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."
According to the Manchester Evening News, the new contracts introduced by Sainsbury's will ensure 'consistency and fairness' for staff across all its stores, no matter their age or how long they've worked there.
One major change the company is making will cut the current list of 22 staff roles to just five: trading assistant, food services assistant, online assistant, general merchandise and clothing assistant, and services assistant.
Controversially, the pay rise will mean the end of annual bonuses to staff, as well as paid breaks, which Sainsbury's has admitted may negatively affect a 'small' number of staff.
Sainsbury's has confirmed it will counter-balance this by paying those affected with top-up payments for 18 months. The supermarket's currently consulting with its staff and plans to introduce the new pay rate in September.
Unite, the largest trade union in the UK, has welcomed the proposed pay boost but has urged its 12,000 members to reject the deal, saying there are too many strings attached.
Bev Clarkson, Unite's acting national officer for food and drink, said: "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 believes these strings will offset any rise in basic pay."
The shopworkers' union Usdaw, also called the pay rise 'welcome news for Usdaw members' but said the union will be 'looking closely at the whole deal'.
Another concern about Sainsbury's proposed pay rise is that while it will pay well above the National Living Wage - the government's national minimum wage - it will remain below the 'real' living wage in London, which is determined by the Living Wage Foundation.
Currently, the 'real' living wage - which is updated each year and based on the true cost of living in the UK - is currently £8.75 across the UK and £10.20 in London. That means while Sainsbury's staff across the country will get a boost, it won't be enough for staff in the capital.
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