The John Lewis Partnership has reportedly incurred the wrath of staff after paying bonuses to just 4,000 of its 79,000 employees – around five per cent of its total workforce.
According to The Times, the retail giant which comprises John Lewis and Waitrose, made 4,000 “special contribution awards”, including to 16 managers, last year – at a time when the firm axed its annual staff bonuses for the first time since the 1950s as a result of the coronavirus pandemic.
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An anonymous employee told The Times that the decision was an “absolute disgrace”, while another told the Financial Times, which first reported the news: “[John] Spedan Lewis would be rolling in his grave at the way partners are being treated.”
The Partnership was founded by Spedan Lewis, who introduced a profit-sharing scheme in 1920 with the principle that the company’s “ultimate purpose is the happiness of all its members, through their worthwhile and satisfying employment in a successful business”.
But staff have been left disheartened by the current situation, with many complaining that the decision goes against the company’s ethos of “ensuring the happiness” of all its members.
John Lewis said it had stopped the bonus because of the effects of the pandemic and its financial difficulties, which had led to the closure of department stores and the loss of thousands of jobs. It said the bonus would return once profits were above £150 million.
A Spokesperson for the company told The Times: “Special contribution awards have been used for more than a decade and we’re proud to recognise partners across the business who have gone above and beyond supporting customers and feeding the nation during the pandemic. Nearly 4,000 awards were made last year — the vast majority to frontline partners.”
‘Cuts will be a blow’
When the bonus axe was announced by John Lewis Partnership last September, the firm’s Chairwoman told staff that it ‘will come as a blow’. The news came after John Lewis posted a £635million pre-tax loss for the six months to July 25, 2020, after higher costs saw a mere one per cent rise in sales.
Even before the coronavirus crisis hit, the retailer had warned that it might not be able to pay staff the expected bonus as competition ate into profits.
The group’s first-half loss was £635million once exceptional items were taken into account, including a £470million write-down in the value of it stores. Excluding those one-off costs, the group’s loss in those six months equated to £55million.
This decision to scrap bonuses marks the first time since it made the decision after World War Two.
“We came through then to be even stronger and we will do so again,” said Dame Sharon White, Chairwoman at John Lewis.
“I know this will come as a blow to partners who have worked so hard this year. The decision in no way detracts from the commitment and dedication that you have shown,” she added at the time.