HR · 14 March 2017

Asda employees offered a pay rise for new “flexible” contract

All Asda’s staff will be offered £8.50 per hour for more flexible working

Supermarket chain Asda has offered all its UK staff a pay rise in return for a new, “flexible” employment contract.

Asda employees will be offered £8.50 per hour, an hourly rate the supermarket claims is one of the highest in the sector and is £1 per hour above the National Living Wage (NLW), for signing the new contract.

If they choose to sign the optional new contract, Asda employees will forego the right to any statutory paid leave, and may be forced to work on bank holidays.

All breaks during work will be unpaid under the terms of the new contract, and Asda has said it will reduce the night shift window – the number of hours during the night during which staff receive premium pay for being on shift.

Currently, Asda workers receive an extra £2.04 per hour when they work between midnight and 6am. Under the new rules, these hours will be cut to between midnight and 5am, but the premium for working during this time will go up to £2.54.

The supermarket has promised that its other non-pay benefits, which include colleague discounts, pensions, share saves and bonus structures, remain unchanged.

Asda has insisted the so-called ‘Your Choice’ contract is not zero hours, with employees retaining a certain number of hours of guaranteed work each week.

The supermarket estimated that 95 per cent of its workforce would be better off under the terms of the new deal, some by as much as £1,000 a year or more.

Commenting on the new measures, senior vice president of people at Asda, Hayley Tatum, said that the new contract would provide more freedom to workers to switch roles and improve their knowledge of the business.

“Colleagues can gain a broader level of experience across their store, which will in turn give them better opportunities to progress and develop their career in retail,” added Tatum.

Asda’s Your Choice contract will be offered to all new employees, as well as its 135,000 existing UK staff, ahead of the planned rise in the NLW in April. The increased rate of pay to workers under the contract will come into force on 8 October this year.

The new contract model has been approved by the GMB worker’s union. It’s general secretary, Tim Roache, said in a statement: “The new contract offer involves quite a few changes, but as it’s voluntary, this allows colleagues to choose whatever suits their circumstances best.

“These new flexible contracts will help ensure job security, ensure those accepting them are on the same terms and – best of all – ensure people will earn more money as a result.”

However, according to the Living Wage Foundation, Asda hasn’t gone far enough to support its staff. In a statement, the foundation’s director, Katherine Chapman, said: “Large national retailers like Ikea, Lush and Majestic Wine are already paying all their staff – including third party contractors – the real Living Wage or above, at £8.45 in the UK and £9.75 in London, for every hour worked.

“By signing up with the Living Wage Foundation they are ensuring that all their staff will have a pay rise that meets the rising cost of living year on year.”

Almost a million UK workers are now on zero-hour contracts

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Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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