• New M&S boss Steve Rowe could shake-up staff pay as part of his turnaround plan
  • Rowe says he is facing “tough decisions” as chief executive and plans to cut premium pay of 7,000 staff
  • A further 11,000 workers could be impacted by cuts to pension contributions

New Marks & Spencer boss Steve Rowe has warned that pay for 7,000 workers could be cut as he grapples with “tough decisions” at the helm.

Rowe, who succeeded Marc Bolland as boss of the high street bellwether in April, said he was making changes to the retailer’s premium-pay policy and its pension scheme in a bid to make the business more sustainable “in the long term.”

It comes as Rowe battles to turn M&S around after it posted an 8.9% slump in like-for-like clothing and home sales during its first quarter, which Rowe dubbed “unacceptable.”

Speaking at the retailer’s AGM yesterday, Rowe reaffirmed M&S’s plans to cut premium pay for Sundays, bank holidays and anti-social hours in a move that will effect close to 7,000 staff, who are currently being consulted over the changes.

Around 11,000 workers will be hit by cuts to pension contributions.

However, basic pay will increase 15% from next April to £8.50 per hour, handing hourly pay rises to around 62,000 shop-floor employees.

Addressing shareholders during the meeting at Wembley Stadium, Rowe said the changes in pay would deliver “some of the highest wages in retail” and insisted the pension scheme would continue to be “generous” despite the cut to contributions.

He added: “We will have further complex decisions to make as we go forward but they will always be taken to give M&S a long-term approach.”

On his turnaround plan, Rowe said: “I know that it is a big ask for me to stand here today with a new set of ideas for you trust me that things will be different this time.

“We will have to take some tough decisions along the way.”

Union reaction

However, unions have hit out at the proposed changes in pay.

David Gill, national officer for shopworkers’ union Usdaw, claimed M&S was threatening to sack any workers who did not accept the changes to their contracts.

He said: “We have been contacted by many of our members in Marks and Spencer who are very concerned about the proposed big changes in their pay and pension, along with the threat of Autumn store closures, particularly as the company are threatening to sack any staff who do not accept the contractual changes.”

Referring to M&S’s planned 15% hourly pay rise and the scrapping of premium pay, fellow union GMB described the move as “giving with one hand and taking away with the other.”

A spokesman for Marks & Spencer said: “We believe our proposed new approach to pay and pensions would reward our people in a fair and consistent way, simplify and modernise our business and help us attract and retain the best talent so we can continue to provide great service for our customers.”