Tesco CEO admits “mistake” with redundancy payouts

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Tesco forecast
// Tesco apologises for hundreds of staff underpaid and overpaid
// Staff overpaid up to £2000
// CEO Dave Lewis admits “there was a mistake”

Tesco chief executive Dave Lewis has apologised to hundreds of former Tesco workers who were either underpaid and overpaid after recently being made redundant.

The employees affected are part of a redundancy programme announced by Tesco earlier this year, as the retailer aims to make £1.5 billion in cost savings by 2020.

The wave of redundancies is expected to impact around 9,000 full time (or equivalent) positions, although a total number has not yet been announced.

Between 200 and 300 former workers were affected, with some overpaid by as much as £2,000.

“There was a mistake. Anybody that was underpaid was rectified within 24-36 hours and we’re now in consultation with those people who were overpaid,” said chief executive Dave Lewis in light of the news.

“It was regrettable – I didn’t want it to happen,” he added.

Tesco is now looking to receive back the overpayments and pay the correct amounts to those who received too little. 

The grocer said anyone who was overpaid by more than £500 will be able to keep £100. But anyone overpaid by less than £500 will be allowed to keep the full amount.

That means anyone overpaid by £499 will be able to keep the full amount, but anyone overpaid by £500 will have to return £400, keeping £100.

A Tesco spokesman said: “A small number of colleagues were impacted by an administrative error which resulted in an incorrect redundancy payment being made to them.

“Colleagues who were underpaid were paid the correct amount within one to two working days and this issue is now resolved.

“We have been in touch with colleagues who were overpaid to apologise, and we will be fair to colleagues affected, taking account of individual circumstances.”

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5 COMMENTS

  1. What a joke by a company that you would hope had some decent accountants.
    “The grocer said anyone who was overpaid by more than £500 will be able to keep £100. But anyone overpaid by less than £500 will be allowed to keep the full amount.”
    Stupid!

    What they should do is find out the max overpayment then pay everyone that got paid redundancy that amount.

    The incompetence of some people does amaze me sometimes, but that fact that some people got over and some got under means this is not a single blunder. It’s multiple….

    • Having worked within a business this size, you’ll find that accountants wouldn’t have been involved with the payments at all. The entire process would have been administrated by the HR team. And in my experience most HR teams are totally inept when it comes to financial tasks. What’s probably clear here is that the “administrative error” would have literally been someone from a HR team who have placed something incorrectly in an excel spreadsheet, messed up a sum or just cut and pasted in to a sheet whilst not thinking about the consequences.

      However, given that this process happened to 9000 people it’s likely a mistake like this would have happened.

  2. The same company who discriminate against people using earned discounts (clubcard points or colleague discount) and only offer an embarrassing pin badge for 10 years service, even at head office level.

    • People who are proud to work for Tesco are very grateful for the 10 year pin and very proud to wear it. It sounds like you’re disengaged and probably not that much fun to be around. Maybe it’s time to find a new challenge/business to work in.

  3. It’s an error. We all make errors. Some people whine about people making errors (are these people the few perfect people in the world? – I doubt it very much), but most people simply understand that errors can be made by everyone.

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