Up to 12,000 Asda workers could lose jobs amid contract row

Up to 12,000 Asda workers could lose their jobs next week, according to union officials, if they refuse to sign up to a new contract that will hit pay and benefits for thousands of workers.

The deal increases basic hourly pay but ends paid breaks, cuts premium pay on most bank holidays and reduces the number of hours rated as better-paid night shifts.

The contracts, which will apply to more than 100,000 of hourly-paid staff, also forces workers to accept variable shifts between 8am and 10pm and to switch between departments as required.

In August, the company told staff if they did not sign up to the new deal they would leave the business on 2 November.

The deal has been nicknamed the “Martini contract” after the drink’s 1970s advertising slogan “any time, any place, anywhere”.

The pay changes come after Asda group’s profits rose by 13% to £805m last year, while payouts to directors increased to £12m from £9.5m the year before.

Neil Derrick, the regional secretary of the GMB union, said: “Workers can be asked to work wherever, whenever including bank holidays. The flexibility and lack of certainty about when they are working, that’s the killer.

“Asda has recruited a workforce saying ‘come to us we are family-friendly business’ and this contract has driven a coach and horses through that.”

Related: Asda workers stage protests against 'punitive' new contract

Siobhain McDonagh, the Labour MP for Mitcham and Morden, has claimed in a letter to Asda’s chief executive, Roger Burnley, that approximately 2,700 staff would lose up to £500 per year as a result of the changes, with a further 300 hit even harder.

But the GMB believes at least 6,000 staff could be financially worse off out of 118,000 Asda store staff it says are on hourly pay.

Gary Carter, the GMB national officer, has written to Asda asking it to postpone the contract change and ensure there were no dismissals through negotiations with the union.

“On 2 November, we understand up to 12,000 of your loyal Asda workers will be given the sack – just before Christmas. That cannot be right,” he wrote.

McDonagh described the move by Asda as “shameful”. The MP said: “Of course I welcome any increase in basic pay, but I am completely appalled that such a major high street retailer would use this as a smokescreen to slash the terms and conditions for thousands of their most loyal staff, triggering the redundancy of even more.”

She added: “What an utterly shameful way to treat so many longstanding employees who have given decades of dedication and hard work.”

Asda says 95% of its hourly paid staff will be financially better off under the new contract. It has agreed to top up wages until mid-2021 for those losing out under the new deal.

The new contract increases the base pay rate for shop workers from £8.21 to £9 an hour, excluding premiums based on location or for special skills such as bakery.

It also maintains existing benefits including an annual bonus, share save scheme and staff discount. Asda says festive bank holidays of Christmas Day, Boxing Day and New Year’s Day will continue to be “voluntary” with pay at double time.

The company says the new contracts represent an investment of more than £80m and are not about cost cuts.

An Asda spokesperson said: “We have been clear that we don’t want any of our colleagues to leave us and while the vast majority of colleagues have chosen to sign the new contract, we continue to have conversations with those who have chosen not to, to try to understand their concerns.

“It is vital that we make sure we are prepared to adapt to the demands of our market. Change is never easy but we are determined that Asda remains a sustainable business for its customers and colleagues – now and in the future.”

Asda’s contract change reflects similar alterations at rival supermarkets, which have offset increases in basic wages – partly driven by the annual increase in the legal minimum wage – by removing other perks.

Competition for workers, amid high-profile efforts by the fast-growing grocery discounters Aldi and Lidl to pay more than the legal minimum, have prompted traditional supermarkets to increase their basic pay.

Sainsbury’s eliminated paid breaks but increased the base level of pay last year. Tesco ditched its annual bonus but pledged to increase hourly pay over the next two years to £9.30, up from £8.40.