Tesco workers in Ireland to miss out on annual bonus

Tesco Ireland has decided not to pay its staff an annual bonus following the poor performance of its business here.

Last month, the British retailer reported a 6.3 per cent fall in Irish sales for the 12 months to the end of February, with full-year turnover dropping to €2.6 billion, its lowest level in nearly a decade.

The company, which is embroiled in a major accounting scandal related to the overstatement of half-year profits, blamed the decision on wider market conditions and the overall performance of its Irish business.

It is understood the decision will affect all 15,000 Irish staff except for a minority covered by historic collective agreements, which provide for a guaranteed bonus of 5 per cent.

Decline

The decision comes in the wake of news the group made a termination payment of £1.22 million (€1.7 million) to former chief executive

Philip Clarke

, who was sacked in September following several years of falling sales and declining market share.

According to its annual report, it paid new boss Dave Lewis £4.1 million (€5.7 million) in the six months since luring him from Unilever to revive the group's fortunes.

In a statement to The Irish Times, Tesco said: "Due to competitive market conditions and the performance of the Irish business, Tesco Ireland has made the decision to declare a 0 per cent share bonus to colleagues this year.

“The Tesco Ireland share bonus scheme provides colleagues with the opportunity to become a Tesco shareholder through a revenue approved scheme which allows colleagues to take their annual award in cash, shares or a mixture of both.”

It is unclear if staff in other jurisdictions, where sales have been falling, will also be denied bonuses.

“Tesco doesn’t have a uniform remuneration policy across its 12 markets. Tesco Ireland sets its remuneration policy for our Irish colleagues based on what’s right for the Irish market,” a spokeswoman said. Irish staff received an average of €250 via the share bonus scheme in 2014.

Last year, Tesco issued four profit warnings and admitted overstating profits by £263 million. The irregularity is being investigated by two regulatory authorities and the serious fraud office in Britain.