ASDA insists suppliers pay temporary, permanent staff equally

Thousands of temporary workers in the food industry will win pay equal to that of permanent staff under a deal struck between Asda and Unite, the union.

Asda, Britain s second-largest supermarket, heaped pressure on other grocers to follow suit by insisting that suppliers pay agency workers the same rate as permanent employees, before a European directive that takes effect late next year.

Unite said that 6,000 workers, mostly migrants, would win improved pay under the agreement, which covers 29 leading suppliers.

The union said that Asda would liaise with the suppliers, agencies that provide migrant workers and unions to plug the 2.4 million needed to ensure that temporary workers were on the same rates as their permanent colleagues.

Tesco s treatment of temporary workers was attacked by unions and shareholders last year at its annual meeting. Unite has blamed food retailers for fostering a two-tier labour system that discriminates against migrants. Agency workers, typically from Eastern Europe, are paid between 30p and 1 an hour less than permanent staff for doing the same job, the union said.

Unite, Britain s biggest union, claimed that the pay gap had led to unrest in communities as permanent staff accused migrants of bringing down wages, while temporary workers felt aggrieved that they were underpaid for doing the same job as colleagues with contracts.

The move comes ahead of a report from the Equality and Human Rights Commission inquiry into discrimination in the meat and poultry market.

The food industry has in principle accepted the European directive stipulating equal pay between temporary workers and permanent staff.

A spokesman for the Food and Drink Federation, the industry s trade body, said: We applaud any initiative that attempts to tackle discrimination and unfair treatment of workers. Our members fully support equal pay for agency workers and have accepted the Temporary Workers Directive s principles. Our chief concern is the additional administrative burden this legislation will have on employers.

An Asda spokesman said: Following our own investigation into working conditions in the meat sector, we agreed with Unite that agency workers who do the same work as permanent workers should receive equal pay, and that agency work should not be used as a means of preventing them from accessing the same rights as permanent workers.

As a result, we brought all our suppliers together as a group and presented both Unite s findings and the results of our own investigation.

Jack Dromey, deputy general secretary of Unite, said of the announcement: It sends a clear message that one of Britain s biggest supermarkets is determined to put ethical principles into practice. For years, tens of thousands of workers have paid the price of discriminatory and unfair practices and poorer conditions of employment.

A Tesco spokesman said: We have co-operated closely with the Equality and Human Rights Commission inquiry into the meat processing industry and look forward to hearing its recommendations on March 16. We work closely with our suppliers to ensure that agency workers are treated decently and share good practice.

Employers will be looking at today s announcement by Unite and Asda with a sense of foreboding.

The agreement has ramifications that extend beyond the supply chain of Britain s second-largest supermarket not least because it shares suppliers with the other multiple retailers.

Asda s pre-emptive strike may be the first of many by companies hoping to earn CSR Brownie points by beating the deadline.

Unite insists that the amount of cash needed to make good the pay gap will not break the bank indeed, the 2.4 million mooted across 29 leading suppliers will hardly be felt in an industry that typically enjoys fatter profit margins than the supermarkets.

But the Government recently estimated that there were 1.3 million agency workers in Britain, about 5 per cent of the working population. That figure is likely to rise as companies take tentative steps out of recession without wanting to take on extra staff that may prove costly to get rid of in the event of a double-dip recession.

The British Chamber of Commerce has estimated the cost of the Agency Workers Directive to be 1.5 billion per year.

Food producers are also worried about the administrative burden of ensuring they are compliant. The conduct of agencies that recruit foreign workers for Britain s food factories has long been an issue and keeping an eye on rogue agencies will become imperative.

The political potency of this will not be lost on anyone, not least Jack Dromey, Unite s deputy general secretary, a former Labour Party treasurer and the prospective parliamentary candidate for Birmingham Erdington.

Images of last year s strikes at the Lindsey oil refinery over the use of Italian workers and calls for British jobs for British workers are reminders of how quickly popular sentiment can turn.

Unite s claim that equal pay will assuage community tensions by absolving foreign workers from the accusation that they put a downward pressure on wages is only half the story. If employers use pay hikes to agency workers to justify job losses and unemployment historically peaks after recessions the spectre of Lindsey will be raised again.

And, as ever, those agency workers are likely to bear the brunt.

Measures to give temporary workers the same rights as permanent staff were agreed in at an EU meeting in Luxembourg in 2008

The Agency Workers Directive affects temporary staff who are employed by a hiring company, rather than the company they directly work for

Temporary staff can be full-time or part-time. Under the directive, they will accrue holiday and sick pay rights after being employed for more than 12 weeks and enjoy the same rate of pay as permanent staff

The treatment of agency workers in the meat and poultry industry is a reverse of the controversy in the NHS, which has been accused of squandering millions of pounds on temporary staff

The NHS paid agency staff up to 400 an hour, adding up to 1.3 billion a year, with temporary nurses earning up to 146 an hour in 2008 ten times the pay of salaried nurses. NHS spending on agency workers rose 60 per cent in the two years to 2008.