Morrisons has become the first supermarket to guarantee pay of at least £10 an hour.
It said the move would mean a “significant” pay increase for nearly 96,000 Morrisons staff.
The increase, which is due in April, works out at around 9% for the vast majority of Morrisons workers, with its minimum hourly pay currently £9.20 an hour.
However, the move has signalled the end of the retailer’s previous discretionary bonus scheme, which is being rolled into the higher basic pay instead.
Morrisons said the announcement meant since 2015 its pay has increased by over 46% and three-quarters of the costs of the increase would be met by direct payroll investment and a quarter by changing the bonus scheme.
“Having listened hard to colleagues, they said they would prefer to have a guaranteed amount in their hourly rate and receive it more regularly,” said Morrisons CEO David Potts.
“It’s great to be able to say that in the UK from April this year, if you work at Morrisons supermarkets, you will earn at least £10 an hour.
“It’s a symbolic and important milestone that represents another step in rewarding the incredibly important work that our colleagues do up and down the country.
“Over the past year we have seen renewed and widespread appreciation in the UK for our colleagues who have had an incredibly tough 2020, working tirelessly so Britain could eat well and shop safely throughout the pandemic. Morrisons colleagues have earned their status as key workers, and this pay increase, many times over.”
Usdaw national officer Joanne McGuinness said: “The new consolidated hourly rate is now the leading rate of the major supermarkets, which is paid every hour and removes the uncertainty of a bonus payment. It is a big step forward, shows that Morrisons is prepared to invest in the staff to help grow the business and I hope that the deal is supported by our members in the ballot.
“It’s been a tough time for food retail staff who have worked throughout the pandemic in difficult circumstances. They provide the essential service of keeping the nation fed and deserve our support, respect and appreciation. Most of all they deserve decent pay and this offer is a welcome boost.”
The pay deal announced today is subject to a ballot opening on 27 January.
In addition to the hourly pay increase, Morrisons will pay a London weighting. Rates for inner London will be 85p per hour higher and 60p more for outer London.