J Sainsbury PLC’s (LON:SBRY), which is planning to merge with Asda, has come under fire for changes to staff pay from MPs who claim workers will lose £3,000 a year.
More than 100 MPs have signed a letter to Theresa May asking the prime minister to take action against the supermarket chain's "unscrupulous contract changes".
The letter, which was written by Labour MP Siobhain McDonagh, claimed the changes will see 10%, or 13,000, of the company’s staff lose up to £3,000 per year.
Under the changes, staff will receive a 15% basic pay rise but they will no longer receive 15 and 30-minute paid breaks, annual bonuses and higher pay for Sundays.
Sainsbury’s said the affected employees would receive "top-up payments" for 18 months to "ensure that no colleague earns less than they do today during this time".
The letter to the prime minister said: "We are completely dismayed that a company of Sainsbury’s' reputation would use an increase in basic pay as a smokescreen for a whole array of deplorable decisions that will hit hardest their most dedicated, loyal and long-term staff."
Sainsbury's defends contract changes
Simon Roberts, retail and operations director for Sainsbury’s, defended the contract changes, saying he does not believe the letter “accurately reflects how the vast majority of our colleagues are feeling".
“We have conducted meaningful consultation with around 100 colleague representatives and have made a number of changes to our original proposals based on their feedback."
READ: Sainsbury's and Asda may have to sell at least 73 supermarkets, research shows
But a pension on change.org, which was started by Sainsbury's worker Michelle Cooper and gathered 104,000 signatures at the time of writing, has called on Sainsbury’s to reconsider the changes. Cooper said she could lose more than £1,000 per year on the new contract.
However, Roberts insisted the changes were about having “one fair and consistent contract for all colleagues”.
“This isn’t the case currently and we have many examples of colleagues working side by side in store, doing the same job and being paid differently, depending on when they joined,” he said.
Sainsbury-Asda merger faces fresh scrutiny
Sainsbury’s is now facing another hurdle over its £12bn merger with Walmart Inc’s (NYSE:WMT) Asda.
The deal is already facing a parliamentary inquiry after business secretary Greg Clark warned about the “possible impact on the supply chain”.
READ: CMA issues 'invitation to comment' on proposed merger of Sainsbury's and Asda
The Competition and Markets Authority last Friday said it had started gathering information into the proposed ahead of a formal investigation.