However, the supermarket giant— under pressure from German discount retailers Aldi and Lidl — has not convinced the Labour Court, which has recommended that it pay the bonus to staff which can range from €400 to €1,000 per employee.
The court has also recommended a 2% pay increase backdated to last April for the company’s 14,000-plus employees.
Union representatives Mandate and Siptu were seeking a 3% pay rise for staff and the payment of the withheld bonus.
Tesco told the court that it continues to experience a year-on-year decrease in its sales position “and therefore an increase in rates of pay is not feasible at this time”.
The company said that with the exception of certain employees who had a guaranteed bonus payment — believed to be around one third of employees — “it is not in a financial position to award a bonus to all staff”.
The Labour Court recommended the payment of the bonus — 1.5% of an employee’s annual earnings — and the 2% pay rise.
Tesco said the recommendation is under consideration.
Welcoming the recommendation, Mandate’s Brendan O’Hanlon said: “Given that they are the second biggest retailer in the country with around a 25% market share, I believe that they are extremely profitable and that they are in a position to pay and that it is a case of ‘wont pay’ rather than ‘can’t pay’.”