John Lewis Admits £40m Salary Blunder

The John Lewis Partnership says an error in calculating pay to staff who work Sundays and bank holidays could cost it £40m to fix.

The retailer, which runs department stores and the upmarket Waitrose supermarket chain, said 69,000 of its 85,500 workers - known as partners - will this month receive additional one-off payments reflecting the amounts due to them back dated to 2006.

It said individual payments will vary according to pay and shift patterns, with more than half of the recipients receiving under £120.

John Lewis said the payment error came to light following a recent review of its holiday pay policy.

Its statement said: "It became clear that partners who receive certain additions to pay, such as premiums for working on Sunday or bank holidays, have not been paid correctly under the Working Time Regulations legislation."

John Lewis will account for the £40m, which includes repayments plus associated administration costs, in its half year results due to be published on September 12, but will not deduct the sum from this year's partnership bonus.

It expects future pension liabilities to increase by about £7m as a result of the mistake, while annual pay costs will rise by about 0.5%.

John Lewis said its pay systems had been updated to ensure that all future holiday payments are correct.

Tracey Killen, Director of Personnel, added: "As soon as we established that we were not implementing the Working Time Regulations correctly, we worked quickly to make the repayments to our Partners in a way that is both fair and responsible."

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