The online fashion retailer Asos has been accused of breaching “the spirit if not the letter” of employment law designed to prevent the exploitation of low-paid temporary workers.
Contract documents obtained by the Guardian show new temporary Asos warehouse workers have been receiving lower wages than colleagues for three months longer than regulations suggest is permitted. The policy could have potentially saved the retailer thousands of pounds in pay.
The discovery of the pay bands forms the latest in a string of criticisms aimed at companies using temporary workers after the Guardian exposed last year how warehouse workers at Sports Direct were being paid less than the national minimum wage.
The disclosure has prompted the GMB to examine launching legal claims on behalf of workers at the Asos warehouse – on a day the union also held protests outside the retailer’s annual shareholder meeting in London, as part of its long-running campaign to highlight what it says are poor working conditions in the group’s Barnsley depot. The Guardian was denied access to the meeting by an Asos executive.
The UK agency worker regulations state that: “After an agency worker completes a 12-week qualifying period with the same hirer, in the same role, they will be entitled to have the same basic terms and conditions of employment as if they had been employed directly by the hirer.” Those same basic terms include pay.
However, the Asos temporary workers, who are employed via the agency Transline, have been handed contracts that state: “Pay parity with wage structure on site after six months service” – when new warehouse operatives were given a pay rise from £7.45 per hour to £7.73.
Asos and Transline said that, in the weeks after the Guardian obtained the contracts, the six-month service rule had been reduced to three months.
The companies added that, under the previous policy, any new permanent staff joining the warehouse before that date would also have had to wait six months for the increase in pay, so there had been no breach of employment regulations as temporary and permanent staff were on the same terms.
However, the vast majority of warehouse workers hired to work at the site are understood to be on temporary, not permanent, contracts.
Asos and Transline declined to give any numbers of permanent workers who had in reality been earning the lower rate. A spokeswoman said: “We have always had a permanent comparator in the three- to six-month window who gets paid the same amount as a temporary worker.”
Zoe Lagadec, a solicitor at Mulberry’s Employment Law Solicitors, said: “This is another example of a structure designed to avoid measures to ensure that workers get treated equally and fairly.
“The agency worker regulations require pay parity after 12 weeks, so this arrangement is a clever way to circumvent it. It is certainly a breach of the spirit if not the letter of the regulations.”
The debate over the contracts has emerged after a long-running campaign by the GMB to improve working conditions at the Barnsley site.
It was reported last year that Asos warehouse operatives were so overworked, they did not have time to use the toilet, an allegation the company denied. Earlier this year, the GMB raised concerns about the levels of surveillance on the site and questioned whether so-called “flex” contracts were causing workers to be underpaid.
Asos responded to the union’s claims, which it described as misleading, in October when it said it was “committed to migrating towards the living wage as determined by the Living Wage Foundation within 18 months” and that it was “reducing the probation period to three months from six, effective immediately”.
However, the GMB has continued with its campaign.
Responding to the contract documents obtained by the Guardian, Neil Derrick, the regional secretary of the GMB, said: “GMB is investigating whether contracts issued at the Asos distribution centre in Barnsley breach regulations governing the treatment of agency workers.
“It appears Asos is trying to bend the rules. The fact members have told us they are not allowed to keep copies of their contracts have sets alarm bells ringing. What has Asos got to hide?
“This latest revelation puts working practices at Asos back in the spotlight and raises new questions about the company’s ethics. It’s time they treated their workers with the respect they deserve.
“GMB will be considering the possibility of legal action against Asos and Transline in any instances where we find members being issued with defective contracts.”
A spokeswoman for Asos, Transline and XPO Logistics, the company that runs the Barnsley warehouse, said: “We believe in treating temporary and permanent workers equally, from day one. As such, pay rates are the same regardless of someone’s temporary or permanent status. This means that we are well within the agency worker regulation guidelines, and any suggestion otherwise would be factually inaccurate. Our approach is to do what is right for the employee – and in many cases that means going above and beyond what’s required by law.”
The spokeswoman said temporary workers were emailed a copy of their contract after they had started work.