Covid 19 coronavirus: Farmers plans to cut staff pay by up to 40%

Retail store Farmers has told staff it will continue to reduce wages as long as the store cannot open its doors.

Farmers stores are not physically open under Alert Level 3 but, like many other retailers, the company is offering deliveries.

Staff were being paid 80 per cent of normal wages, but that was likely to drop down to 70 per cent in May and 60 per cent in June if stores were still not open then, according to a letter sent to staff by James Pascoe Ltd Group directors Anne and David Norman.

Farmers will continue to reduce wages as long as the store cannot open its doors. Photo / File

"Hence it is felt that as our turnover will be lower than we have experienced in recent years we have no choice but to 'right size' our organisation which sadly means saying goodbye to a number of team members."

It is not known how many staff have been let go at Farmers.

In the letter, the Normans said Farmers staff needed to "share some of the pain".

"... by that we need you to accept that the company, with virtually no income cannot afford to keep anyone on full salary."

Salaried staff would receive 80 per cent of their normal pay or $585 per week - the Government wage subsidy - depending on which was higher.

James Pascoe Ltd received a wage subsidy payment of $2,724,249.60 for 429 workers on Wednesday last week.

As well as Farmers, the company owns a range of jewellery stores and Whitcoulls.

In May if the stores were not open staff would receive 70 per cent of their usual pay or $585 per week, depending on which was higher, the Normans said.

"... and perish the thought that our stores are closed that long, at a rate of 60 per cent for June," they said in the letter.

"Once the stores have reopened your rate will return to 80 per cent until close to normal levels of business have been achieved."

The letters were sent on April 18 and staff had four days to agree to the new conditions, one worker said.

Staff were told the company's senior executives were taking a pay cut and that the Normans themselves had reduced their salaries to the "Government minimum".

In a response to emailed questions, Norman said "Farmers, Whitcoulls, Stevens, Pascoes, Stewart Dawsons and Gold Mark" stores had zero income while were closed.

"Farmers and Whitcoulls were allowed to open their 'E stores' in Level 4 but only for essential items. Any income from the E store is a drop in the bucket compared to our wage bill!"

He said about 2 per cent of the company's workforce had been let go but it would take a "wait and see" approach to future business levels.

The company had chosen to close nearly 500 stores in Australia because even though they could trade, they had no customers.

Norman said the Australian JobKeeper scheme, which paid companies A$1500 ($1511) per fortnight to keep staff in their jobs, was more generous than the New Zealand wage subsidy.

"... so we were better off closing them and relying on the Australian JobKeeper allowance!"

He reiterated that all JPL workers had been asked to take a pay cut, including himself and members of his family.