“Starbucks is cutting paid lunch breaks, sick leave and maternity benefits for thousands of British workers, sparking fresh anger over its business practices.
On the day the House of Commons’ public accounts committee branded the US coffee chain’s tax avoidance practices “immoral”, baristas arriving for work were told to sign revised employment terms, which include the removal of paid 30-minute lunch breaks and paid sick leave for the first day of illness. Some will also see pay increases frozen.
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.
via Starbucks to slash paid lunch breaks and sick leave | Business | guardian.co.uk.
Over the last month, I’ve been intrigued at how public opinion was having an impact on our corporate tax regime. Imagine, in abstract, a well-informed, financially-literate customer base deciding how much tax a company should pay! Sounds like fun and a lot cheaper to operate than our current shambles. Might be hard for HMRC to enforce but would certainly connect profitability, customer service, employee well-being and value to society in an efficient, market-driven framework for how much tax you owe. I like that.
So while I’m getting all excited about social forces playing their part on tax policy, I read from the Guardian that Starbucks are looking to make some cost savings by trimming employee perks.
Either their timing is really bad or there is some relationship between the issue of paying more tax and this employee benefits squeeze. Ouch. I get the need to remain profitable in a low margin environment. But £2.75 for a Cappucino is not a low margin business.
I now believe Starbuck’s financial management to be a lot sharper than their HR and PR department. Costa and Nero: you’re missing an opportunity here.