Asda’s problem: Changing terms and conditions for employees

As retailers face continued pressures, more employers may feel they need to change their terms and conditions of employment in the near future to help combat overheads.

It has been announced that Asda’s staff will stage protests on the 14th August 2019 after they were told to accept changes to their contracts or face losing their jobs.

It is alleged that originally, ASDA had sought the staff’s agreement to the changes. However, members of the GMB union now claim that workers are being forced into signing the new deal at the risk of being dismissed.

Under the new terms, it is understood that it will be compulsory for staff to work on bank holidays; while paid breaks will be scrapped in exchange for a new £9 an hour basic rate. The new contract cuts holiday entitlement, slashes bank holiday and night shift pay, and introduces policies and changes that could have a damaging impact on the predominately part-time, low-paid, female workforce.

It has been reported that staff have been given a leaflet that outlines the plans to ‘let go of’ staff who refuse to consent to the new terms. The leaflet explains that if they do not agree, ASDA will have no alternative but to terminate the employment on their existing terms and conditions and offer to re-engage the employees on the new terms. If they then choose not to accept the new terms, they would leave employment. 

GMB have described the move as punitive and claim that this is a unilateral attempt to change generous contractual terms. They reject the claim that this is a fair ‘fire and hire’ situation.  

Readers will be aware that British supermarket chains have come under increasing pressure in recent years and months. For example, Tesco announced on the 5th August 2019 that it is to axe 4,500 jobs across 153 of its stores; while in July Sainsbury’s posted a 1.2% fall in total sales, despite cutting prices on more than 1,000 products since February.

Unfortunately, therefore, we predict that there is a strong chance of similar instances over the coming months, as UK supermarkets (and other sectors) face further economic strain. Although the concept of ‘fire and hire’ may seem harsh, this may well be the first of many employers (particularly ones smaller than ASDA) seeking to change terms and conditions over the next few months in an attempt to survive.

Although many retailers have attempted to avoid passing increasing prices onto the consumer, more are finding that they have to. As retailers are forced by the public to keep the cost of a weekly shop down, they need to look at other overheads such as employment costs if the cost of goods and importing them continues to increase.

Ultimately, this process is fair as long as the organisation adopts the correct practices. Generally, provided a fair process is adopted, which can be complex, it is likely that any dismissal arising from this type of process would be deemed to be for a potentially fair reason, as it is a commercial requirement to make the changes.

For any employer, there is the risk of adverse publicity but many employees in the UK are already working on terms such as those which ASDA are now proposing, and they may not have much sympathy. For example, there are also of course many who already have to work bank holidays.

The union have invited ASDA back to the negotiating table, but we will have to wait and see if the protest has any impact on their future employment. 

This article was written and researched by Albert Bargery, Solicitor at our Isle of Wight Office. Albert advises employers and employees on the Isle of Wight and throughout the UK. You can contact Albert by email: [email protected]

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The information contained in this blog post is provided for guidance and is a snapshot of the law at the time it is written. It is provided for your information only and should not be used as a substitute for obtaining legal advice that it specific to your particular circumstances.

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