Asda has offered all of its 135,000 store staff a pay increase to £8.50 per hour as it ushers in more “flexible” contracts.
The supermarket giant will allow its workers to choose whether or not to accept the new contract or stick to their existing terms, in what it claims to be a first for the retail sector.
Retailers such as Marks & Spencer and B&Q have previously come under fire from staff and politicians for bringing in compulsory new payment terms that have left some of their employees worse off.
Asda has estimated that 95% of its staff will be better off under the new contracts, which will come into force from October 8.
The grocer said the new terms will be “better for colleagues, better for customers” by allowing “greater levels of flexibility” in the working patterns of staff.
Asda’s senior vice president of people Hayley Tatum told Retail Week that the introduction of the new terms was designed to make sure staff contracts were “fit for purpose, fit for our customers in the way they choose to shop and are fair for colleagues”.
Under the new contracts, staff will have the flexibility to work in various areas of the store, rather than only being contracted to work in a specific department or on checkouts, for example.
“This contract allows us to have much more fluidity around providing that service,” Tatum said.
“If we are busy somewhere and have queues in the café, for instance, it means colleagues can jump off and help during that busy spell and then go back to what they were doing before.”
Tatum said Asda would be investing in additional training to make sure its staff were skilled across different areas of the shop floor, although she did not reveal how much additional money would be ploughed into employee development.
To help fund the new £8.50 pay rate – £1 per hour more than the government’s National Living Wage of £7.50 – Asda has made other changes within the new “Your Choice” contract offer.
Staff will be required to work all bank holidays if required by their store, or take them as annual leave.
Asda workers who opt into the new contracts will also move to unpaid breaks, while staff working night shifts will only be paid a premium for anti-social hours between midnight and 5am, rather than the current window of 10pm until 6am.
However, the premium will increase from £2.04 per hour to £2.54 per hour.
Tatum said half of the investment required to fund the changes would be “new money”, with all other staff benefits including staff discount, pension, bonuses and its sharesave scheme remaining unchanged.
Staff who choose not to move to the new contract will stay on their current terms, with all shop-floor staff moving to the increased National Living Wage of £7.50 per hour from April 1 regardless of their decision on the “Your Choice” contract.
Tatum added: “Our current employment contracts have evolved over decades. They mean we have different colleagues on different terms and they don’t give our colleagues the level of flexibility our customers need to meet their changing needs.
“Our customers shop in different ways at different times and they expect us to deliver them the same great level of service whenever they visit us.
“This new contract will also mean that 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.”
GMB general secretary Tim Roache added: “These new flexible contracts will help to ensure job security, ensure those accepting them are on the same terms and – best of all – ensure that people will earn more money as a result.
“The new contract offer involves quite a few changes, but as it’s voluntary, this allows colleagues to choose whatever suits their circumstances best.”