In a bid to meet the new rates set by the Living Wage Foundation, BP is overhauling the pay structure for its retail workforce, a move that has sparked significant internal friction. The energy company is an accredited member of the Foundation and has committed to paying the real living wage, which is based on actual living costs. To reach the new target of £13.45 per hour, BP has decided to cut funding for paid breaks and bank holiday premiums.
The Living Wage Foundation’s scheme is voluntary, and employers join it to demonstrate a commitment to fair pay. However, the costs associated with the significant rise in the living wage this year (a 6.7% jump) have led BP to look for savings elsewhere in the payroll. By eliminating paid rest breaks, the company can afford the higher hourly rate without drastically increasing the total amount paid out per employee per shift.
Critics argue that this approach undermines the spirit of the Living Wage accreditation. The purpose of the scheme is to ensure workers have enough to live on, but if the total take-home pay remains stagnant due to benefit cuts, the objective is arguably not met. One worker noted that the changes would reduce take-home pay by roughly 6.25% in terms of lost benefits, essentially wiping out the value of the hourly raise.
The situation at BP highlights a complex challenge for the “fair pay” movement. As the recommended living wage rises to combat inflation, employers are increasingly stripping back “gold-plated” benefits like paid lunches and double-time overtime to balance the books. This results in a higher headline wage that looks good on recruitment posters, but a tougher working environment for existing staff.
Despite the controversy, BP insists the changes are about modernizing their pay structure. The company plans to implement the new rates and the associated benefit cuts in February. While the hourly rate will look attractive compared to competitors, the loss of paid breaks marks the end of an era for BP’s forecourt staff, who previously enjoyed perks that were rare in the sector.