John Lewis hit by £40m holiday pay foul-up

A FAILURE to correctly calculate holiday pay will see John Lewis make a £40m repayment to its staff.

Some 69,000 staff (partners) will receive an additional one-off payment this month to reflect the amounts due to them, back-dated to 2006.

The payroll bungle was discovered during a review that found the partnership had failed to correctly make holiday payments relating to premiums for partners working on Sundays or bank holidays.

More than half of the recipients will receive under £120. Future pensions liabilities will increase by approximately £7m as a result. Its pay systems have been updated to ensure future holiday payments are correct – the change is expected to 0.5% to its annual pay costs.

Tracey Killen, director of personnel, said: “As soon as we established that we were not implementing the Working Time Regulations correctly, we worked quickly to make the repayments to our partners in a way that is both fair and responsible.”

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