The John Lewis Partnership has made a provision of £36m to cover potential costs of national minimum wage regulations.

John Lewis

John Lewis

The underpayments relate to John Lewis Partnership’s pay averaging

The group revealed the figure as part of its annual report, which was published this week.

The Partnership, which owns Waitrose and the John Lewis department store business, insisted that its rates of pay have never been below the national minimum wage (NMW), but said its pay averaging arrangements “do not meet the strict timing requirements of the NMW regulations”.

The retailer said that staff will “usually” have received the correct pay, but admitted that “in some months where greater than average hours are worked they will have been paid less than the hourly rate stipulated in the NMW regulations”.

The Partnership said the £36m exceptional charge booked for the year ending January 28 was its “best estimate” for payments that are owed to past and present workers over the past six years.

However, it said that the “ultimate resolution of the liability may result in an amount that is different” from that.


John Lewis Partnership said the payments would be made once it has conducted a “detailed review”.

Chairman Sir Charlie Mayfield, who has waived his £66,000 bonus for the 2016/17 financial year, 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.”