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Lloyds addresses Sainsbury's pay cut concerns

Lloydspharmacy says existing Sainsbury's contracts will be legally protected when it takes over the pharmacy business in March


Lloydspharmacy has reassured Sainsbury's staff their existing contractual terms will be protected when it takes over the pharmacy business in March, in the wake of fears over pay cuts.

C+D readers voiced concerns over the multiple's buyout of the supermarket’s 281 pharmacies last week for £125 million. Current and former Sainsbury’s employees posting on the C+D website expressed worries that the deal would see pharmacists’ pay fall and signal an end to benefits, such as in-store discounts and long-term employment bonuses.

But Lloydspharmacy and Sainsbury’s stressed that the approximately 2,500 supermarket employees affected would have their contractual obligations protected under employment law (see below). Lloydspharmacy also said it would work “closely” with the supermarket chain on a consultation “on all areas that are important to colleagues, including their benefits”.

It was “very early days” in the deal, and there would be “many details” to work through before it took control of the branches next March, Lloydspharmacy said. The multiple was "committed to taking the time to consider how we welcome colleagues to our business", it said, and creating the "best transition possible".

But superintendent pharmacist Max Falconer, a former manager of a Sainsbury's pharmacy, branded the deal a “disaster” for staff, who could look forward to pay rates of “£15 per hour and going down”. Sainsbury’s dispenser Louise Smith said she was “waiting for the shock to wear off” after learning she would lose her “discount [and] bonus" after "20 years [of] service”.

Locum rates and communication

Kent-based locum Alisdair Jones also told C+D he was worried that pay rates would drop, while pharmacy student Zohib Sheikh predicted Lloydspharmacy would “undoubtedly run down” locum pay.

In response, Lloydspharmacy told C+D that its locum rates vary “by location and nature of the requirement”. “We always aim to provide patients with continuity of service and we will take that approach when we operate the pharmacies within Sainsbury’s,” it said.

C+D readers also lamented that Sainsbury’s staff only heard about the deal on the day it was announced. Sainsbury’s technician Zoe Spivey said she felt “totally cheated”, and pharmacist Raluca Chisu said the lack of notice was “unfair”.

Sainsbury’s told C+D that the deal was “market sensitive”, but it had wanted staff “to hear about it from us first”. “We began briefings with our pharmacy colleagues ahead of any announcements,” it said.

Neither Sainsbury’s nor Lloydspharmacy would say whether other companies had bid for the pharmacies, consisting of 277 located in Sainsbury’s stores and four in hospitals. Sainsbury’s said the sale had been subject to a “fair tender process”, while Lloydspharmacy told C+D it had been “looking for opportunities” to expand.


How will employee benefits be protected?

Andrew Davidson
Partner, Hempsons law firm


Sainsbury’s employees’ salaries will initially be protected under transfer of undertakings (TUPE) regulations, Mr Davidson told C+D. This makes it “very tricky” for Lloydspharmacy to change the terms of employment that staff received while at Sainsbury's. However, if any Sainsbury's staff receive a higher salary than their Lloydspharmacy equivalents, they were unlikely to get any pay increases until the salaries matched, he said.

Mr Davidson reassured readers that Sainsbury’s staff will retain any pay benefits they received for long-term employment because they will continue to deliver the same service. But they may lose their Sainsbury’s staff discount, as the terms of this scheme probably means it only applies to staff directly employed by the supermarket, he added.


How will the sale of Sainsbury's pharmacies to Lloydspharmacy affect the sector?

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