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Lloydspharmacy rejects ex-Sainsbury’s staff enhanced redundancy claims

Lloydspharmacy has formally rejected a claim for enhanced redundancy benefits in the latest stage of its dispute with former Sainsbury’s staff.

In a move the Pharmacists’ Defence Association (PDA) branded “disappointing, but not entirely unexpected” given Lloydspharmacy’s position on the matter to date, the multiple decided not to uphold a grievance from ex-Sainsbury’s employees that claimed they were entitled to enhanced redundancy pay.

It follows the multiple's takeover of the pharmacies in Sainsbury’s stores in 2015 and its decision earlier this year (January 19) to withdraw pharmacy services from the supermarket over the course of 2023.

Read more: Lloydspharmacy defends position amid Sainsbury’s redundancy row

In a letter dated May 10, seen by C+D, Lloydspharmacy told affected staff that an HR document from 2015 setting out redundancy entitlements was “not a contractual document and does not give a contractual right to enhanced redundancy payments for ex-Sainsbury’s colleagues”.

The letter also revealed that most ex-Sainsbury’s staff who transferred to Lloydspharmacy under TUPE legislation in 2016 would only be eligible for statutory redundancy pay under their contractual terms.

Read more: Lloydspharmacy quits Sainsbury’s: What we do (and don't) know so far

The HR policy “does not give an unequivocal right to enhanced redundancy pay” and only says that affected staff will receive statutory redundancy pay “as a minimum”, Lloydspharmacy claimed. The policy therefore “envisages that colleagues will receive statutory redundancy pay”, it added.

However, it acknowledged that “a few ex-Sainsbury’s contracts of employment contain an express right to enhanced redundancy pay”. In these cases, Lloydspharmacy conceded that this right had transferred under TUPE legislation.

The decision follows a grievance meeting between Lloydspharmacy and the PDA Union, which took place on April 17.


Next steps


Last week (May 12), the PDA said that its legal team would “assess the outcome and consider the next steps”, which it warned could take the form of an appeal.

“An appeal would be the last stage of the process available within the company and further action would need to be via the courts, such as an employment tribunal,” it noted.

The union said that it would “provide further advice about this in due course”.

Read more: Lloydspharmacy: PDA considering ‘legal action’ over redundancy dispute

Lloydspharmacy told C+D that it “has been committed to a fair process throughout and equitable treatment for all colleagues, including those who transferred to Lloydspharmacy from Sainsbury’s”.

It reiterated its view, also set out in the letter, that during the transfer it was “clearly communicated that any entitlement to the legacy Sainsbury’s redundancy policy would be for a period of 12 months following the transfer”.

“It was also explained that the policy was non-contractual, meaning it did not form part of their terms and conditions of employment,” the multiple claimed.

Read more: DH 'assessing potential impact' of Lloydspharmacy Sainsbury's exit

Lloydpharmacy said its former owner McKesson UK introduced a new redundancy policy for all UK-based staff in 2020, which the multiple told C+D it has “adhered to” since.

It continued: “With this as its clear basis, Lloydspharmacy is providing all colleagues affected by the Sainsbury’s withdrawal a statutory redundancy process. In doing so, Lloydspharmacy has ensured that it is acting responsibly and equitably towards all colleagues impacted by the change.”

In January, Lloydspharmacy told C+D that “how colleagues are potentially affected” by its withdrawal from Sainsbury’s stores would vary branch to branch.

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