Tesco says it cannot afford to pay bonuses

Tesco says it cannot afford to pay bonuses

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Tesco refuses to pay its Irish staff their 2015 bonus citing the excuse that its sales levels are in the struggling stages. The biggest English supermarket chain has told the Labour Court that it cannot ‘afford’ to pay the bonus. But the Labour Court has asked the supermarket to pay the bonus to staff which can range from €400 to €1,000 per employee. The supermarket titan, struggling due to the price war pressure from the German discounter supermarkets Aldi and Lidl said that the Court recommendation is under consideration.

Union representatives Mandate and Siptu were demanding a 3 percent pay hike for staff along with the withheld bonus payment. Tesco told the court that it continues to experience a year-on-year decrease in its sales position “and therefore an increase in rates of pay is not feasible at this time”. The company said that with the exception of certain employees who had a guaranteed bonus payment — believed to be around one third of employees — “it is not in a financial position to award a bonus to all staff”.

The Labour Court recommended the payment of the bonus — 1.5% of an employee’s annual earnings — and the 2% pay rise. The court has also recommended a 2% pay increase backdated to last April for the company’s 14,000-plus employees. Welcoming the recommendation, Mandate’s Brendan O’Hanlon said: “Given that they are the second biggest retailer in the country with around a 25% market share, I believe that they are extremely profitable and that they are in a position to pay and that it is a case of ‘wont pay’ rather than ‘can’t pay’.”

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