Staff working at Sainsburys and Asda may see changes to their terms of employment following the merger of the two supermarket titans announced this week.

Jade Linton, associate solicitor in the Employment team at Thursfields, was commenting after Sainsbury’s chief executive Mike Coupe confirmed the plans to merge with Asda, which is currently owned by US supermarket giant Walmart.

Mr Coupe – who would lead the new group – also said the proposed deal would not lead to store closures or job losses, although the UK’s Competition and Markets Authority said it was “likely” to review the merger.

Jade said: “While the initial suggestion is that there would be no store closures or job losses, this merger is bound to lead to duplication among head office and centralised functions, and the possibility of employment contract changes needed to harmonise terms of employment.

This could include basic terms like hours of work, sickness and holiday conditions but at worse could involve changes to rates of pay and pension arrangements, assuming these terms differ between the two groups of employees.”

Jade explained that generally an employment contract can only be amended in accordance with its terms or with the agreement of all parties and that this is the option carrying the least risk of any claim of unfairness or breach.

However, she warned: “An employer seeking to harmonise terms of employment could do so by terminating the existing contracts of employment and offering re-engagement on new terms, or simply by imposing the changes.

These options are not without their risk and one would expect appropriate consultation with unions or employee representatives.”

Jade said companies the size of Sainsburys and Asda would almost certainly be planning to take detailed advice from their legal teams.

But she added: “For any companies considering acquisitions or mergers, they should remember any changes to an employee’s contract should only be made with the benefit of legal advice and with union agreement where applicable.”

For further advice please contact:

Jade Linton, Thursfields Solicitors

Email: jlinton@thursfields.co.uk Tel: 0121 7964024

 

Thursfields expert Solicitors are available at any of our offices and surrounding areas – Birmingham, Worcester, Kidderminster, Solihull, Halesowen, Sedgley and Stourport.

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