John Lewis partners have been dealt a blow by the news that some of them will lose their partnership status – and thousands of pounds each year.
Maintenance staff across both John Lewis & Partners and Waitrose & Partners will no longer be employed directly by the partnership. Instead, they will be employees of CBRE, the American-owned real estate company.
Of the 375 staff in the partnership’s maintenance department, 278 will have their contracts TUPE transferred over to CBRE. A total of 44 staff retired and the remainder either chose to leave the partnership or were redeployed to another area within JLP. TUPE transfer rules meant the partnership did not offer voluntary redundancy.
The work that the nearly 300 staff do on a daily basis will not change. But the hallmark benefits of the partnership – the most significant of which are the bonus and being able to vote on matters pertaining to the way in which the business is run – are gone.
“Most shopfloor staff do not work at a retailer that trades, literally, on its reputation as a stellar employer”
CBRE will not honour those commitments and why should it? It’s a different business, run in a different way and staffed by employees who would not be in line for the same partnership-style treatment were it given to former John Lewis partners.
There will be those who think John Lewis’ decision is no big deal. And yes, axing 375 staff from its partnership is small fry compared to the 70,000 jobs that were lost across retail last year through administrations, CVAs and redundancy rounds at the grocers that affected thousands of staff. But it should be noted that this move from the partnership came just a month after the news that it was ending its defined benefits pension scheme.
The partnership is replacing the scheme linked to workers’ final salaries with a defined contribution scheme, through which it will match staff payments. The changes, which come into effect from April 2020, will affect the partnership’s nearly 84,000 workers and save the business £80m a year in pension costs.
A cynical move
Of course, it’s important to say that the partnership had been one of the few UK companies still offering staff a link to final salaries in its pension scheme. It has made the move in a bid to reduce costs in an increasingly turbulent retail market and its partners still get a relatively good pension.
But then there’s the bonus – which is currently at 3% – the level it was in 1953, a year before wartime rationing ended. Again, I hear you say, not many shopfloor staff get a bonus; 3% is better than the nothing that the vast majority receive.
But most shopfloor staff do not work at a retailer that trades, literally, on its reputation as a stellar employer. The partnership rebranded last year, becoming John Lewis & Partners and Waitrose & Partners, the better to emphasise its excellent credentials. And this, or more specifically the timing of this, is what rankles.
“John Lewis risks diminishing its USP and becoming another bland player in an overcrowded market”
While managing directors Paula Nickolds and Rob Collins both said this rebrand was about “more than just a change of logo”, completing it less than a year before beginning to axe benefits and trimming the partnership smacks of cynicism.
The partnership’s decisions on benefits do not come as such as shock at a time when retail is suffering so visibly. They cannot be easy decisions to make. But that doesn’t make the optics any more edifying and is of scant comfort to staff who may feel the partnership they were once sold looks on decidedly shakier ground.
John Lewis’ USP has always been its ethics. If the retailer continues to chip away at the policies that have always made it such an attractive employer, and prospect for shoppers, it risks diminishing this USP and becoming another bland player in an overcrowded market.
The partnership needs to be very careful it does not prioritise the fiscal prudence of which it is so proud over its values.
If it continues to trim the fat from its model in this way, it may still stand while others fall around it – but what will it be standing for?