John Lewis staff receive holiday pay windfall

John Lewis and Waitrose staff are set to share a 22 million pound extra bonus this year after a change in UK legislation following the outcome of an employment tribunal which will affect the way British businesses calculate holiday pay.

The employment appeal tribunal in November 2014, which was unrelated to John Lewis, ruled that overtime must be taken into account in payments, which means that the John Lewis Partnership, along with other UK businesses, will now have to take the ruling into account when calculating holiday pay for its employees.

The partnership is one of the first to publicly announce the costs to its business as a result of adopting the legislation from next month. The retailer estimates that it will cost around 12 million pounds per year, including pensions, bonuses and employer’s National Insurance, which represents less than 1 percent of its total annual payroll costs.

In addition to this annual figure, John Lewis has also committed to a one-off payment of around 10 million pounds, which is made up of a 3 million pounds back payment to November 1, 2014, and around 7 million pounds to recognise the increase in pension liabilities.

Tracey Killen, the Partnership's director of personnel, said: “The John Lewis Partnership has acted promptly to change its pay practices in response to the Employment Appeal Tribunal ruling. We believe our approach is a fair and practical outcome for our Partners in light of this decision.”