The (extended) Countdown to Sign Asda's New Employee Contracts

8th November 2019 Employment

Saturday 2 November was intended to mark the final day on which all remaining Asda workers who had not signed up to the new “contract 6”, could sign up and retain their job with the ‘big four’ supermarket giant. All those who had not signed up were at risk of losing their job when the new contracts came into force on 3 November.

Since then, Asda extended the deadline for those wanting to return on the new terms. Workers now have until midnight on Saturday 9 November to sign the new contract. The number of workers left to sign the contract appears to be somewhat distorted with reports ranging from 350 to 12,000.

The contracts are in fact not quite that ‘new’ and were actually introduced 2 years ago. Staff were encouraged to sign up on a voluntary basis. The contract has been dubbed “contract 6” as it streamlines six contracts into one, with the intention of creating more equal terms for its workers. In summer 2019, the company announced its intention to transfer the remaining 60,000 staff who had not voluntarily signed on to the new contract.

So, what’s different about the new contract?

  • Staff will receive a rate of pay fixed at £9.18 per hour. This represents an annual pay rise of 11% from the national minimum wage (£8.21 per hour). Asda originally offered staff a rate of £9 per hour, which has been increased in the midst of the press hype around the issue. London-based staff will receive a rate of pay fixed at £10.11 (a rise from the national minimum wage set at £8.80 per hour). This will rise to £10.31 next year.
  • Paid breaks, extra rates for working certain bank holidays and some night shift hours will be sacrificed under the new terms.
  • There is no legal requirement for workers to be paid for breaks. The Working Time Regulations 1998 stipulate that workers are entitled to an uninterrupted break of 20 minutes if their daily work time is more than 6 hours.
  • Workers will be expected to accept variable shifts and switch between departments as required, with reasonable notice.

The potential legal backlash for Asda will remain to be seen, with the possibility of unfair dismissal and indirect discrimination claims looming. Whilst workers who have not yet signed the contracts are perhaps understandably unhappy and disgruntled, Asda’s reasoning for the contractual changes is based on commercial requirement. This is likely form part of their justification against any claims that follow. It will ultimately come down to whether Asda followed a fair and proper process in carrying out these measures.

Asda follows in the footsteps of two other supermarket giants Tesco and Sainsbury’s, who conducted similar processes with their staff in the past few years. With the growing pressure on the ‘big four’ to keep up with ever-successful discount stores Aldi and Lidl, it is hoped that the restructure will allow Asda to be more efficient with their use of staff.

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Ruth Pearson is a Trainee Solicitor located in Manchesterin our Trainee Solicitors department

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