A piece of cake, a pay rise and extra days off for staff attending Smiths City's 100th birthday celebrations at its Christchurch headquarters. Shirley Brown, the grand daughter of Smiths City founder HC Smith does the honours with chief executive Roy Campbell.

Smiths City will pay the living wage and is giving staff two extra days off, but says its 100th birthday sweetener is unrelated to a recent negative Employment Court ruling.

Chief executive Roy Campbell said the living wage decision was made well before the recent court finding against the national retailer for running unpaid pre-work meetings, a practice that resulted in a $1.5 million backpay bill.

"It's totally divorced from that, these moves have nothing to do with the decision handed down by the court."

SUPPLIED First Union has welcomed Smith City's decision to pay its staff the living wage from the beginning of October, and more than 250 workers will get a pay rise.

Tuesday's announcement to the NZX that Smiths City will pay the living wage of $20.55 an hour means a pay rise for about half the company's 541 staff.

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A package of new terms and employment conditions released as part of the furniture and appliance retailer's 100th birthday celebrations included an extra day's leave this year, and an annual "well-being" day to be taken from accrued sick leave.

Campbell said the payment of the living wage would start on October 1 but declined to say how much it would cost the company.

"When we were planning our budgets back in February this year we anticipated this move so we're very comfortable with what we're doing."

However, the company was not committing itself to automatically raise pay rates in line with future increases to the living wage.

"We do not want to place ourselves in a position where we don't have the freedom and flexibility to look at what's appropriate remuneration of our team members relative to the environment we find ourselves in.

"What we are doing is committing to look after our staff, and make sure our team can live better, and that they are rewarded and remunerated for the work they do."

First Union retail, finance and commerce secretary Tali Williams has welcomed shift to a living wage and said it would make a substantial difference to staff.

One worker, a full time supervisor at the company for 18 years currently on $17 an hour, would earn an extra $142 a week before tax.

Smiths City's unpaid pre-work meetings, which went on for many years, resulted in some staff not receiving the minimum wage once the extra 15 minutes was taken into account.

Campbell said the company was still tracking down affected staff who had left the company, and in early August the company would launch a communication programme to find former workers entitled to backpay as a result of the court decision.