Starbucks to cut paid lunch breaks and sick leave — low paid staff to fund tax bill?
Starbucks still under pressure over its tax affairs has sparked fresh controversy with news that it is to cut paid lunch breaks, sick leave and maternity benefits for thousands of low paid British staff. The move suggests that staff at Starbucks could find themselves funding the US coffee giant’s new UK tax bill once agreed with HM Revenue & Customs.
At the weekend Starbucks said it was reassessing the amount of tax it pays in the UK, following major public backlash. It said it understood that it needed “to do more to maintain and further build public trust”.
It reportedly paid £8.6m in corporation tax in the 14 years it has been trading in the UK. Starbucks has said it is in talks with HM Revenue and Customs and the Treasury over how much tax it pays.
Today the Guardian reports that Starbucks, whose tax policies have been branded immoral by the House of Commons’ public accounts committee, baristas arriving for work were told to sign revised employment terms.
These include the removal of paid 30-minute lunch break and paid sick leave for the first day of illness.
The timing could not be worse. Announcing the changes in the same week it is in the public eye over tax mean a double dose of negative press for the chain, which does not recognise trade unions.
— UK Uncut (@UKuncut) December 4, 2012
not a great time for starbuck pr-wise guardian.co.uk/business/2012/… . slashing employee lunch breaks and sick pay won’t help to repair reputation
— Matt Gill (@mattjwgill) December 4, 2012
The changes affecting about 7,000 coffee shop staff emerged as the company tried to quell public and political outrage at its use of secretive company structures that has seen it pay just £8.6m in UK tax over the past 13 years on sales of £3.1bn.
On Saturday Starbucks announced it would open talks with the UK government that could lead to it paying more tax in future and on Monday it was reported that such an announcement could come on Wednesday. But at the same time it was telling workers it was removing benefits and changing employment arrangements.
The new contractual terms being circulated to staff across 750 stores include the removal of cash incentives for becoming manager or partner of the year in favour of the award of a plaque and the removal of a bonus scheme for women returning after they have had a baby because “it is not considered a valued benefit”, the Guardian reports.
The news comes as some wonder if Starbucks has left it too late to settle its tax affairs and that the delay and bad publicity has badly damaged the brand.