Nestle commits to work with contractors to cover their staff with living wage

Nestle commits to work with contractors to cover their staff with living wage

The food industry often takes a battering on a range of issues and, sometimes, that criticism is justified.

And as the biggest beast in the jungle, Nestle has often found itself the subject of opprobrium on subjects from the link between palm oil and deforestation to the marketing of infant formula.

But today (30 June) the world's largest food maker deserves praise for making a move to tackle low pay in the UK.

The Nescafe and Kit Kat maker has received accreditation to be a "Living Wage" employer in the UK. The living wage, first proposed by campaigners in London in 2001, is a level of pay above the UK minimum wage, itself established in 1997 and set currently at GBP6.31 an hour.

In London, the living wage is calculated at GBP8.80 an hour; outside the UK capital, it is GBP7.65.

Nestle already pays its 8,000 employees in the UK the living wage, which could lead some to question the importance of the move. However, the company has pledged to work with contractors - said to have around 800 staff on the food giant's sites - to ensure their employees are paid the wage.

Fiona Kendrick, chairman and CEO and Nestle's business in the UK and Ireland, said the company was "proud" to be the "first mainstream manufacturer" in the UK to earn the accreditation. "We know that this is the right thing to do. Not only does it benefit our employees but also the communities they live and work in."

However, of more interest was the reaction of campaigners and employee representatives.

Rhys Moore, director of campaign group Living Wage Foundation, said Nestle's accreditation was a "significant milestone in the campaign to tackle in-work poverty".

Dr John Sentamu, the Archbishop of York and one of the senior figures behind The Living Wage Commission, which last week published a report calling on the UK government to work harder on low pay, praised Nestle's "voluntary commitment".

And Len McCluskey, general secretary of the Unite union and hardly an automatic friend of big business, said employers should "take note" of Nestle's "positive stance" on the issue.

"It was secured in the spirit of co-operation and a willingness to start to tackle poverty pay in a traditionally low paying sector," McCluskey.

Of course, Nestle's move will not solve the problem of low pay overnight. According to data on the Living Wage Foundation's website, 750 employers are accredited. The Living Wage Commission has estimated that around 45,500 staff have therefore been brought up to the living wage; the same body says around 5.2m people are paid below the living wage.

There is, of course, some concern in business, particularly among SMEs, about the impact implementing a living wage will have on costs. And it would be wrong to call for all businesses to simply introduce the policy without thinking carefully about its affordability.

However, in its report published last week, the Living Wage Commission sought to emphasise the benefits it saw to business of paying a living wage. "Several studies have been carried out into the business case for the living wage, with a general conclusion that there are clear benefits on productivity, staff turnover, absenteeism, stability, motivation and commitment, and business reputation," it wrote.

FMCG and retail have been seen as sectors were pay is lower than in other industries. The fact the Living Wage Foundation press release hails Nestle as the "first FMCG business" to which it has awarded the accreditation speaks to that.

Perhaps cynics will scoff that a company the size of Nestle can easily afford such an initiative. And perhaps there would be an element of truth in that. But the fact Nestle is willing to invest in its staff should be applauded - and the hope is some of its closest competitors - companies with vast resources of their own - will follow.

"We are aware that Nestle is going above and beyond the basic requirements of becoming an accredited employer, and is extending their commitment to graduate, internship and school leaver programmes," Moore said. "We hope that the leadership they have shown will encourage others in this industry to follow suit and improve conditions for those at the lowest end of the pay scale and sub-contracted staff."