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Asda consider pay cut for 7,000 staff

View profile for Stephen Woodhouse
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Asda under fire for contract changes

Reports that Asda are considering cutting wages for 7,000 staff in south east England is obviously concerning news for employees, particularly in the context of the current cost of living crisis. Pay is often seen as the most fundamental term in an employment contract and Asda would need to consult fully with staff and ultimately obtain their agreement.

If staff do not agree then any pay cut which was imposed unilaterally would give rise to claims of unlawful deduction of wages and constructive dismissal.

To encourage employees to agree, it is likely that the company will have to offer some form of additional compensation. This may be a one off compensation payment or a tapering of their current salary over a number of years.

As a last resort, the company may decide to “fire and re-hire” those staff who do not agree. However this approach has faced high profile criticism in recent times with the government announcing in January 2023 that it plans to crack down on such practices.