Union secures above-norm pay deal at Tesco

The global supermarket giant Tesco has concluded a significant collective pay agreement with the Mandate trade union. The agreement, which is outside the terms of Ireland’s national social partnership agreement, provides for an overall pay increase of 12% over 24 months. It also encompasses non-pay elements, including new work patterns and pension arrangements. Some 10,000 workers are set to be covered by the Tesco-Mandate agreement.

A recent wage settlement with the supermarket chain Tesco has been negotiated by Mandate – the union of retail, bar and administrative workers in Ireland. The agreement, which covers 10,000 workers in the supermarket chain, secures a total pay increase of 12% over 24 months. This is higher than the nationally agreed wage rise of 10% over 27 months, as stipulated in the current 10-year national social partnership agreement, [Towards 2016 (2.86Mb PDF)](http://www.taoiseach.gov.ie/attached_files/Pdf files/Towards2016PartnershipAgreement.pdf).

The agreement is the most recent addition to Tesco’s new cooperative employment relations strategy. It follows an agreement on new management structures, along with a landmark information and consultation agreement in 2005.

In addition to the aforementioned pay increase, the Tesco-Mandate agreement also aims to facilitate the business plans and continued growth of the company, while addressing staff needs. The agreement extends beyond pay elements alone and incorporates new contracts and work patterns. In addition, changes to pensions are also envisaged, most notably a unique career average defined benefit (DB) pension scheme for new employees.

Last year, Mandate pulled out of social partnership agreements at national level. At that time, Mandate’s General Secretary, John Douglas, explained that the decision to forego talks on a successor to the previous agreement, Sustaining Progress 2003–2005 (513Kb PDF), was taken because: the union ‘does not believe that the major stakeholders in the process are prioritising the need to close the ever-widening gap between those on higher pay and those on lower and middle incomes’.

Mandate pay claims

Many of Mandate’s retail and bar staff members are poorly paid relative to average earning levels. This has resulted in grievances within the union’s ranks that members have been left behind in the midst of Ireland’s economic boom. After deciding to walk away from social partnership in favour of free collective bargaining, Mandate made a decision to lodge pay claims with retail employers. The trade union has 42,000 members in the retail and bar trades.

Mandate has a number of local pay claims in process, but the vast majority of these have been rejected by the employers involved. A spokesperson for the Irish Business and Employers’ Confederation (IBEC), who was asked to comment on the claims, outlined: ‘We expect all unions to adhere to the terms of national agreements, including those affiliated to the Irish Congress of Trade Unions (ICTU)’.

While it is affiliated to ICTU, Mandate not only opted out of last year’s national-level talks on the social partnership agreement, but also decided to forego voting on the terms of the agreement that ICTU subsequently concluded with IBEC and the government. ICTU has no power to force Mandate, or any other trade union, to adhere to national wage deals due to Ireland’s voluntarist system of industrial relations.

Main provisions of agreement

The Tesco pay deal is worth 6% annually. In contrast, the national social partnership agreement allows for annual increases of 4.6%. Trade union leaders have recently expressed concerns about rising inflation levels, which averaged at about 4% in 2006, rising to over 5% in April 2007.

The agreement provides for a new pay scale for Mandate members with fewer points, along with a higher starting rate and a lower top rate. For all new staff, there will be 18 months’ progression between each of the above three points. Long service increments will not apply to these new staff.

Tesco has agreed, in principle, on the need for stability and consistency with respect to working patterns. Both management and Mandate regard this as making an essential contribution to the quality of work–life balance, while also recognising the needs of the company. The two parties confirmed their commitment to entering into discussions to address this matter from February 2007.

Other key issues covered in the agreement include: improved annual leave; a share bonus scheme; and a new career average DB pension scheme for all new staff employed before 1 April 2007, provided that they have completed three years’ continuous service.

It should be noted, however, that the Services, Industrial, Professional and Technical Union (SIPTU) represents a relatively small number of staff at Tesco; therefore, because it has signed up to the Towards 2016 agreement, different arrangements apply.

Brian Sheehan, Industrial Relations News (IRN)