18/10: Sainsbury’s is axing 2 000 store and back office roles as the supermarket chain looks to slash costs by £500m. This is amid an intensifying price war with Aldi and Lidl. The retailer is restructuring its HR departments, serving Notice and Severance to 1 400 store-based clerks and another 600 staff based in the back offices that serve the chain
All the big supermarket chains have announced recent job cuts as they seek to compete. Tesco is shedding 2,300 staff as part of a cost-cutting programme, while thousands of Asda workers are also receiving either Notice and Severance or a dramatic cut in their working hours as Britain’s third-largest supermarket chain looks to cut costs.
Sainsbury’s, which employs about 119,000 full-time staff, is moving towards a centralised HR model as it overhauls to save hundreds of millions of pounds.
The big four supermarkets –Tesco, Sainsbury’s, Asda and Morrisons – are losing market share to Aldi and Lidl, which added £390m to their sales over the past three months.
What is Notice and Severance?
Sec. 86 of the ERA establishes minimum notice periods according to the length of service, as follows:
-one week, if the employee has been continuously employed for at least 1 month but less than two years;
-one week for each year of continuous employment if the period of continuous employment is between two and 12 years and
-12 weeks if the period of continuous employment is 12 years or more.
No notice needs to be given if the employee has been employed for less than 1 month. There is no statutory right to pay in lieu of notice. However, a pay in lieu of notice clause can be inserted in the employment contract or it may be paid to cover any potential damages for breach of contract.
The Employment Right Act 1996 only provides for statutory termination pay in the event of redundancies. Employees are entitled to redundancy pay provided that they have been continuously employed for at least two years with the same employer. The number of weeks’ pay due depends on the age of employee, the length of service, and is to be calculated, as follows:
-0.5 week's pay for each year of service where the employee was below the age of 22;
-1 week's pay for each year of service where the employee was between 22 to 40 of age;
-1.5 week's pay for each year of employment where the employee was 41 and over.