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Union to protest over Next's pay offer after £695m profits
Updated 11:32am Thursday 10th April 2014 in Latest News
The GMB union is planning protests over the pay rise offered by Next - which has branches in Chippenham, Trowbridge, Swindon and Bath - to staff after achieving profits of £695 million.
And the union for retail staff says a special payout of £300m to shareholders should be invested in staff instead.
Next reported a 12 per cent increase in annual profits to £695m in March and it expects profits in 2014 to rise by up to £770m.
The company said in January that it is generating more cash than can be invested in the business so it will make a special payout of £300m to shareholders.
Now the GMB says there will be protests to say this £300m should be spent by Next to offer jobs above the 12.5 hour maximum per week which can be worked in some stores and to pay staff a living wage of £7.65 per hour, which rises to £8.80 per hour in London.
Next - which nearly 50,000 employees at over 500 stores, call centres and warehouses in the UK and Ireland - is currently paying £6.31 per hour to those 21 and over, £5.03 to those aged 18 to 20, £3.72 to those under 18 and £2.68 per hour to retail apprentices.
Mick Rix, GMB national officer for retail staff, said: "This pay rise while welcome will place Next staff 0.18p above the national minimum rate of £6.50 from October 1.
"This is well below a living wage of £7.65 per hour and £8.80 per hour in London - 30,000 of the 50,000 employees will get no share of the £4m bonus."
In May and June the union will ask consumers to support its call that the special £300m payout to shareholders goes to staff instead.
Mr Rix said: "There has to be a stepping up of public pressure on Next to invest this £300m in better pay and longer hours for staff who now need their meagre wages topped up with family tax credits and housing benefits to make ends meet."
Simon Wolfson, chief executive of Next, wrote to staff: "At this time last year, I wrote to let you know that the Company would pay a special bonus to qualifying staff. I am very glad to be able to write to you with the same good news this year.
"In 2011 the Board awarded me an incentive scheme called a Share Matching Plan (SMP). The value of this bonus was closely linked to the value of the Company’s shares. In the last three years, thanks to everybody’s hard work, NEXT has grown its profits per share by 65% and the Company’s shares have trebled.
"As a result of these exceptional gains, my SMP bonus has become more valuable than I could possibly have hoped. I am also in the very fortunate position to have significantly benefited as a shareholder. In these circumstances, instead of accepting the award, I have asked the Board if they will share it amongst all those who have worked for the Company during the three year SMP qualifying period (28 April 2011 to 28 April 2014).
"The sum in question is just under £4m, and will be shared in proportion to your annual contracted salary. This works out to around 1.5% of your salary. It will be paid as a one off bonus in your May pay. I hope you will accept this bonus as a personal gesture of thanks and appreciation for all your hard work and dedication to NEXT through testing economic times.
"In addition, I am pleased to let you know that we are significantly improving the rate of pay for Retail Sales Consultants and Stock Room Assistants.
"This year we are going to bring the annual staff pay review forward from October to June. From 1st June your hourly rate will increase by 37p an hour.
"Over the last few months I hope you will have seen many positive changes to the way we are managing our stores. We have introduced a new bonus scheme, new recruitment processes, more hours available to work on shift market place, and a new appraisal system.
"We will also be looking at making better use of people’s time by re-allocating hours from quieter to busier times of day as and when vacancies arise.
"All these changes have two simple objectives to improve the level of service we offer our customers whilst making NEXT a more rewarding place to work.
"This pay rise should be seen alongside all the other measures we are taking to improve customer service and we hope that, over coming months, you will help to take NEXT’s service from good to outstanding."
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