Asda accused of ‘fire and rehire’ in row over pay cut plans for 7,000

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Asda’s bosses ploughed ahead with a transition onto a new payroll even though they were warned that doing so could risk thousands of workers being paid incorrectly, a report has claimed.

Asda and a union representing 7,000 workers have entered into a furious row, after the supermarket giant was accused of “inexcusable” pay cut plans.

The chain rejected claims it is going to cut the pay of 7,000 low-paid retail workers, insisting it is in the middle of a consultation to remove an “anomaly” in the market.

The GMB union accused Asda of threatening workers with losing 60p per hour, having their night supplement reduced and being dismissed if they refused.

It claimed Asda was making an “inexcusable” move during a cost of living crisis and that it was being done ahead of a potential merger. It called on the government to step in and stop the pay cuts.

In April, GMB warned Asda its reported merger plans would risk jobs and food supplies.

Grocery inflation has remained high during the cost of living crisis, dipping by just 0.2 per cent in April.

The GMB accused Asda of an illegal practice called fire and rehire, when staff are sacked and then rehired with less favourable contracts.

An Asda spokesperson said:“We are holding a collective consultation in a small number of stores outside the M25 where colleagues are currently paid a legacy location supplement of 60p per hour on top of their existing rate of £11.00 per hour.

“This supplement is out of line with the wider retail market and has created an anomaly where some Asda colleagues in stores that are close together are paid different rates.

“As part of this consultation, we are discussing a compensatory payment for colleagues in return for the removal of this location supplement, if the proposal goes ahead.

“These discussions are ongoing and no final decision has been taken.” 

GMB said cuts were a part of the owners’, the Issa Brothers, attempts to prepare for a merger with the EG group and to write off debts, thought to be around £11bn.

Nadine Houghton, GMB organiser, said: “Cutting the pay of 7,000 low-paid, retail workers during a cost of living crisis is inexcusable. 

“The billionaire Issa Brothers and their business partners the multi-millionaire elite private equity fund managers in TDR Capital are restructuring ASDA in preparation for the debt laden merger they are trying to push through with EG Group. 

“If the business secretary allows this merger to go ahead, she will be responsible for allowing a deal that is bad for workers, bad for consumers and bad for the high street. 

“These slash and burn tactics, along with food and fuel price increases, will only ramp up if the merger goes ahead.

“TDR and the Issa Brothers will be using ASDA’s revenues to pay off their debt mountain – this is money that should be invested in stores, colleagues and ensuring proper competition in pricing. 

“ASDA’s workers and consumers should not bear the brunt of financial engineering from private equity.” 

The Department for Business and Trade has been approached for comment.