Penneys among big retailers giving pay rises to staff

Large retailers have agreed a raft of pay deals with unions in the sector as the domestic economy continues to improve and retail sales grow.

The trade union Mandate has agreed deals with Penneys, Arnotts and Brown Thomas, and a ballot result on a pay deal with Marks & Spencer is expected on Friday. The unions says it is also in the final stages of agreeing a deal with Debenhams.

Gerry Light, the union's assistant general secretary, says the pay deals range between 2 per cent and 4 per cent.

Mandate has concluded a 4 per cent pay deal for its staff at Penneys, which operates as Primark outside of Ireland. The pay increase will be paid in two phases over 22 months, according to Mr Light.

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“They’re one of the better employers, and we have a good relationship with them. They have banded-hours contracts, which guarantee their staff levels of work.”

Breege O’Donoghue, a veteran director of Primark until her retirement a year ago, often spoke out against zero-hour employment contracts that have become controversial within the retail industry.

Permanent contracts

Mr Light said the M&S deal was for a 3 per cent rise, with additional provisions to move some staff onto permanent contracts. He said Mandate was also “about to agree” a deal with Debenhams which he expected to be about 3 per cent.

“What is most interesting is that we are getting these pay deals across the board without concessions.About 3 per cent is the average. Retail is tangibly improving, and there is a recognition that staff need to be rewarded,” he said.

Retail Ireland, a sectoral division within the employers group Ibec, said it was “understandable” that staff in retail were seeking new pay deals as the sector recovered.

"We think the average deal is about 2 per cent, which is sensible and modest," said Thomas Burke, the director of Retail Ireland.

Disparity

However, he said retailers were still “being squeezed” by other cost increases such as insurance and rates. He also highlighted the disparity between the rise in retail sales volumes and the lower rises in value of retail sales, which he said were “anaemic”.

The latest figures from the Central Statistics Office show that retails sales rose 4 per cent by value in May, but volumes rose by almost double the rate, at 7.8 per cent. Retail Ireland says this is down to deep discounting within the sector.