Tesco (LON:TSCO) will pay nearly £10 million to current and former employees, the blue-chip grocer has said. The move comes after staff was left underpaid due to a payroll error.
Tesco’s share price has fallen deep into the red in today’s session, having lost 1.83 percent to 185.05p as of 12:31 GMT. The stock is slightly underperforming the broader London market, with the benchmark FTSE 100 index having dipped 0.81 percent to 7,275.16 points. The group’s shares have lost nearly six percent of their value over the past year, and are down by some 10 percent in the year-to-date.
Tesco (LON:TSCO) announced in a statement today that it will reimburse 140,000 current and former colleagues following an internal review of its reward systems. The company said that the reimbursement for the majority of staff was expected to be up to £40, with the total reimbursement costs likely to reach £9.7 million. The supermarket explained that the review, which was conducted during the implementation of a new payroll system, revealed that the employees were paid less than the National Living Wage after contributing part of their salary to pensions, childcare and cycle to work schemes.
“As soon as our own review identified this issue we took immediate action to resolve it and establish which colleagues are affected,” Matt Davies, chief executive of Tesco UK and Ireland, said in the statement, adding that the company had apologised to staff and its priority now was “to talk to them about how this affects them individually, and make any necessary payments”.
In analyst news, Macquarie reiterated its ‘outperform’ stance on the blue-chip supermarket today, without specifying a valuation on the shares. According to MarketBeat, Tesco currently has a consensus ‘hold’ rating and an average price target of 198.78p.