Asda Job Losses: Why Are Workers Refusing To Sign ‘Contract 6’?

By Josie Laidman, Volunteer Writer 31 Oct 2019

Thousands of Asda staff face being sacked in the run up to Christmas if they do not sign a new “flexi-contract” before Saturday (2 November). The supermarket giant has promised employees an 18p pay rise, but this has been dismissed as a “smokescreen” by unions. Why is the contract causing such as stir, and what does it mean for workers’ rights? 

Why Are Workers Facing The Sack?

In 2017, Asda brought in a voluntary employment contract – dubbed “contract 6” – which is now becoming mandatory for all employees.

It is reported that, as late as last week, there were up to 12,000 workers that have not yet signed the contracts, and would therefore face being sacked in the run up to Christmas. Although Asda say an “overwhelming majority” have signed on so far.

Hundreds of Asda workers gathered in Leeds earlier this month to protest the supermarkets new employment contract. GMB Union, which represents Asda staff, also wrote to company bosses urging them to sit down and resolve disputes.The supermarket has allegedly told those who are yet to sign contract 6 that they will not be paid for any sick leave until they do.

What’s The Controversy With The Contract?

Image credit: Pixabay

Contract 6 has unofficially been nicknamed the “Martini contract” after the drinks’ 1970s advertising slogan: “Any time, any place, anywhere.”

The contract originally proposed to increases the base rate of hour pay for shop workers from £8.21 to £9, excluding location or skill-based premiums. Asda announced a further 18p increase to £9.18 on Tuesday.

It removes employees paid breaks and means they will need to work bank holidays, or take the leave out of their annual leave allowance.

Working festive bank holidays – Christmas Day, Boxing Day and New Year’s Day – will continue to be voluntary, Asda has said, and double pay will be offered.

Night shifts, which are better paid per hour, are being reduced from eight to five hours (12am to 5am).

Those working day shifts will need to make themselves available to do any shifts between the hours of 8am and 10pm.

Asda said every work rota will be published at least four weeks in advance, giving workers time to make any necessary personal arrangements.

How Will It Affect Workers?

Earlier this year Gary Carter, GMB’s national officer, said: “The new contract cuts holiday entitlement, slashes bank holiday and night shift pay, and introduces an any time, any place, anywhere culture which risks a hugely damaging impact on the predominately part time, low paid, female workforce, who need flexibility that works for them.”

Single mum Laura Leighton, who works 16 hours a week at Asda to juggle her childcare commitments, has reluctantly signed the new contract.

She told Sky News: “I felt pressured, I felt like I had no choice but to do it. It’s been really difficult, the worry of having two children as a single parent and potentially not having a job, and this contract potentially making me substantially poorer.”

When she is working, her mum looks after her children. Losing the flexibility of working hours puts pressure on their family to cope with the demands of childcare.

Making Laura’s breaks unpaid also means that her 16-hour week turns into a 15-and-a-half-hour week, dropping her below the threshold for receiving working tax credit for single parents.

With Universal Credit as Laura’s only other option, she calculates that she would be left £400 a month worse off.

Siobhan McDonagh, Labour MP for Mitcham and Morden, has claimed that almost 3,000 employees will lose up to £500 a year, although this may be reduced after the April 2020 pay rise.

She also raises significant concerns over the flexibility employees will now have to show. While some might welcome the change, others may find it extremely difficult.

She was able to negotiate with her store to make sure she works and is paid for a 16-hour week.

What Does Asda Say?

Image Credit: Geograph

In response to looming sackings, an Asda spokesperson told RetailGazette: “The overwhelming majority of our colleagues from across all our stores have signed onto the new contracts and while we appreciate that some of our colleagues find the changes more unsettling, we do not want any of them to leave.

“We understand colleagues have commitments outside of work and will not be asking them to constantly move the time they work, their days or departments.”

Anthony Hemmerdinger, Asda’s senior vice-president for operations, said in April that the change in contact is necessary to meet customers’ changing needs.

He told the Press Association: “As our customers continue to change the way they shop with us, we also have to be prepared to change to meet their needs, and a key part of delivering great service is having the right colleagues in the right place at the right time, which is what this contract aims to achieve.”

Asda said that around 50,000 of their employees are already on this contract. It says that it in the interest of fairness, and to achieve the levels of flexibility necessary within the business that they suggest they need all employees to be on the same terms.

The supermarket says the new contracts represent an investment of more than £80million in over 100,000 employees, and that they are not a cost cutting measure.

Asda believes 95 per cent of its hourly-paid employees will be financially better off under the new contract. For those that are losing out, it has agreed to top up their wages until mid-2021.

UPDATE: 6 November 2019 – Asda has extended the deadline for workers to sign the new contract to 10 November. 

Featured image credit: Flickr.

About The Author

Josie Laidman Volunteer Writer

Josie has a BA Hons and LLM in Public International Law from the University of Nottingham. She has been working in the criminal justice system since graduating and also completes ad hoc research assignments on human rights and international humanitarian matters.

Josie has a BA Hons and LLM in Public International Law from the University of Nottingham. She has been working in the criminal justice system since graduating and also completes ad hoc research assignments on human rights and international humanitarian matters.