London, 2017-May-11 — /EPR Retail News/ — In its Annual Report and Accounts published today (9 May 2017), the John Lewis Partnership announces it has made a provision of £36m to cover the potential costs of complying with the National Minimum Wage (NMW) Regulations.
While the Partnership’s contractual hourly rates of pay have never been below the NMW, it intends to work with HMRC to understand if all its arrangements meet the specific criteria of what are some quite complex Regulations. The Partnership is specifically looking at its practice of Pay Averaging which aims to smooth out a Partner’s pay over a year to ensure a consistent amount is paid to them each month in respect of their basic pay. This arrangement was implemented to support Partners with a steady and reliable monthly income, but we now believe this arrangement may not meet the strict timing requirements for calculating compliance with the NMW regulations.
Once we have completed our detailed review, we will make any retrospective payments required to current and former Partners affected. There is a wide range of potential outcomes and so we have made a provision of £36m as an exceptional charge for the year ended 28 January 2017. The total provision is to cover any payments that might become due, along with employer’s National Insurance, pension costs and other associated costs.
Sir Charlie Mayfield, Chairman of the John Lewis Partnership said: ‘In our Annual Report and Accounts we have made a provision for any payment we may be required to make to comply with the National Minimum Wage Regulations. In the Annual Report we have said that arrangements have already been made to make these payments and contact former Partners. HMRC are aware and we intend to work with them in order to resolve some of the key points regarding the way the NMW Regulations apply to our pay arrangements and practices. We expect to do this as quickly as possible. However, it is likely these discussions will take some time to be completed.’
Notes to editors
The John Lewis Partnership – operates 48 John Lewis shops across the UK, johnlewis.com, 354 Waitrose shops, waitrose.com and business to business contracts in the UK and abroad. The business has annual gross sales of over £11bn. It is the UK’s largest example of an employee-owned business where all 86,700 staff are Partners in the business.
For further information please contact:
Simon Rigby/Jos Bieneman
Telephone: 020 7638 9571
John Lewis Partnership
Director of Communications
Mobile: 07710 398460
Source: John Lewis Partnership