Retail organisation Asda has offered 135,000 UK-based store employees a pay increase as part of a new contract.
The Your Choice contract, which is voluntary, will enable staff to earn a minimum of £8.50 an hour from October 2017.
Current staff can decide whether or not to move to the new contract, which involves an agreement to flexible working. This will include asking employees to work different hours, days or in different departments, depending on customer demand.
The contract also includes an agreement to work bank holidays where required, or to take these days as annual leave.
Under the new contract, all breaks will be unpaid. The night shift window will also be re-defined as 12am to 5am, rather than 10pm to 6am. The night shift premium will increase from £2.04 to £2.54.
The new contract entitles staff to 28 days of annual leave including bank holidays. Non-pay benefits, such as the employee discount, pension, share save scheme, and bonus, will not be affected by the contract offer.
Geographic and role premiums will remain in place.
Asda estimates that 95% of its workforce would be financially better off by accepting the new contract, and that some staff would be able to earn an additional £1,000 a year.
Asda has guaranteed minimum hours for its staff and that fair and reasonable notice will be provided for any rota changes, with consideration given to those who have care requirements outside of work. The organisation has also reconfirmed its commitment not to use zero-hour contracts.
All new colleagues will be automatically offered the new contract, however staff who do not wish to move to the ‘Your Choice’ contract will be able to remain on their current terms and conditions.
All employees will move to the increased national living wage rate of £7.50 from April 2017, regardless of their contract decision.
The national living wage, which is the statutory rate for employees aged 25 and over, will increase from £7.20 an hour to £7.50 an hour from April 2017.
Hayley Tatum, senior vice president of people, said: “Our [employees] have always made Asda special. We want to be the best we can for our customers, which means not only investing in our products and prices but critically, we also need to invest in our people.
“Our [employees] help our customers every day and we want to offer them a rate of pay that recognises the amazing job they do. This new contract will mean that [employees] 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.
“This new contract offer is the right thing for us to do for customers and our [employees] and we hope that as many [employees] as possible choose to accept it.”
Tim Roache, general secretary at trade union GMB, 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 [employees] to choose whatever suits their circumstances best.”
