Sainsbury’s under shareholder pressure to pay Living Wage

Sainsbury’s has come under pressure to pay living wage for all workers as The Queen’s bank, Coutts & Co and the Coal Pensions Board join a group of investors backing a resolution for higher pay.

The Big 4 grocer’s annual shareholder meeting on 7 July, will be the first on a resolution committing a UK company board to pay living wage.

Investors who were previously committed to the resolution included HSBC, Legal & General Investment Management and Fidelity International as well as retirement fund Nest and the Brunel Pension Partnership.

READ MORE: Ex-Sainsbury’s CEO warns of double digit food inflation

With new members and increasing pressures, investment campaign group ShareAction has deemed the resolution a “litmus test for investors’ social commitments amid the cost-of-living crisis”.

The move comes after Sainsbury’s has raised pay for 171,000 direct employees across 1,400 stores to living wage – £9.90 an hour, or £11.05 an hour in London.

However, the move didn’t extend to contractors and outsourcing companies such as Mitie, which provides essential services like cleaning and security.

“We recognise the positive progress made by Sainsbury’s to match the living wage for its directly employed staff,” Coutts & Co head of responsible investing at Leslie Gent said.

“As a living wage employer ourselves we believe that this accreditation would set a standard for all UK supermarkets, and would provide the certainty and transparency that helps attract a high-quality workforce, today and in the future.”

Despite pressure, Sainsbury’s chairman Martin Scicluna has written to shareholders asking them to vote against the resolution claiming the firm’s rates were already higher than competitors.

“Accrediting as a living wage employer would mean that a third party – the Living Wage Foundation – would decide our colleague pay changes each year,” Scicluna said.

“We believe it is right for the company and our stakeholders to make independent decisions regarding pay and benefits, rather than have them determined by a separate external body.”

Tesco’s chairman John Allan employed the same argument stating they were “concerned about making a commitment to a living wage and putting our wage structure at the mercy of a decision by a third party.”

Rising concerns over decent pay come amid a 40 year high of inflation, with ex-Sainsbury’s boss Justin King warning of double digit food inflation.

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