May 21, 2018

John Lewis holiday pay fiasco to cost firm £40 million

Employees at John Lewis are set to benefit from an added bonus in their forthcoming pay packets, after the firm realised it had been miscalculating its levels of holiday pay for at least seven years.

The situation is believed to have arisen as the retailer had been basing its holiday pay on the contracted weekly hours for staff, which became an issue when premium rates for working on Sundays and Bank Holidays were not taken into account. The mistake is believed to affect around 69,000 members of staff from both John Lewis and Waitrose, all of which will receive one-off payments of between £120 and £5,000 – totalling around £40 million.

This is an issue sure to be watched closely by those working in human resource management, acting as a great example of how inadequate planning can result in costing companies millions of pounds.

It is thought that the calamity will also affect the firm’s pensions services, with the John Lewis group said to be increasing its future pensions liabilities by as much as £7 million.

Image Credit: joncandy (Flickr.com)

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