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Asda workers up and down the country have had to choose between signing a new contract or losing their job. Workers that refused to sign the contract were given a 12-weeks’ notice period, which was due to expire on 2nd November. Asda extended this deadline by one week. The deadline has now passed, and the threat of dismissal remains.

What is the new contract and why are workers refusing to sign it?

The contract has been dubbed Contract 6, and it was introduced by Asda in a bid to remain ‘competitive’ and to ‘adapt to the demands of the market’. Asda aim to improve overall efficiency and financial performance by demanding greater flexibility from its workforce, at the cost of its staff morale.  Contract 6 was introduced in 2017 as a voluntary contract, and became mandatory this year.

The contract offsets increasing the basic rate of pay by slashing other terms and conditions. The hourly rate of pay is increased from £8.21 to £9, and Asda have recently pledged to increase the pay by a further 18p from 1st April 2020 following demands from workers. However, whilst the contract implements a higher basic rate of pay, it involves workers sacrificing paid breaks, public holiday entitlements and night-shift premiums. The contract also implements flexible working hours meaning workers will no longer have set days/hours/departments, and can be expected to work variable shifts from anywhere between 08:00 AM to 10:00 PM. Asda have said that every store will publish rota’s at least four-weeks in advance (it was previously only three-weeks’!), but will this always be adhered to? Insecurity over working hours will have a disproportionate impact on a predominantly female, part-time workforce. Workers will have to balance work and family commitments, causing workers added stress. Will flexibility work both ways to accommodate workers, particularly those who are single parents or carers?

Whilst an increase in the basic rate of pay is welcomed, pay is not the most important factor to all workers. They want a contract that provides flexibility and security, not one that simply slashes the terms and conditions they rightfully have.

Can ASDA change its contract of employment in this manner?

Changes can be made to a contract of employment if:

(1)    The employee or their representative (this is usually a trade union representative) agree to the change, or
(2)    There is a clause in the employment contract that allows the employer to vary specific terms (usually a flexibility/variation clause).  Such a clause must be specific and written in clear language.

If the changes cannot be agreed, then an employer can force the changes on workers by first dismissing them and then offering re-engagement on the new terms. This is what Asda have said it will do.

If workers still refuse, then they will be out of a job.

Workers may have grounds to claim for unfair dismissal, providing that they have a minimum of two years’ service (the majority of Asda workers on the current contract will meet this hurdle). Workers may also have grounds to argue that the changes are discriminatory – either directly or indirectly.

In any event, it is up to the employer to show that the changes are justified. The employment tribunal will then look at the changes, and determine whether or not the dismissal was in fact fair. In doing so, the tribunal will consider whether or not there was a sound business reason for the change. It will then consider whether or not the change was done following fair process. Fair process involves adequate consultation with workers and their trade union. When making changes such as those in Contract 6, employers should engage in an open consultation with workers, and there should be room for compromise.

Asda is set to face consumer backlash, as many customers are equally outraged by the actions of the supermarket, and rightly so. Asda’s Christmas advert ends with “Let’s Make Christmas Extra Special”, but how is the supermarket making Christmas “extra special” for its workers? For the last 12-weeks, workers have had a difficult choice to make – accept punitive changes or be out of a job.  

Asda’s profits rose by 13% to £803m last year, with directors’ pay-outs increasing from £9.5m to £12m. Asda can afford to increase the hourly rate of pay, maintain or improve terms and conditions for all workers AND still make a profit. Asda reports that an “overwhelming majority” have signed the new contract, but this is not surprising given the threat of dismissal. Workers have simply been bullied into accepting the new terms. It is an egregious use of power to threaten staff with unemployment in the run up to Christmas, and a shocking way to treat workers who have given many years of service to the company #ASDARespectYourWorkers.

Blog by Jodie Robertson

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