Asda staff at the chain's Stevenage and Hitchin stores could be fired if they refuse to accept a pay cut, the GMB Union has warned.

According to the union, Asda will tell workers at 39 stores across the south that they will lose their current 'location supplement', worth 60 pence per hour, and have their night supplement reduced.

Asda workers within the M25 are paid over £1 per hour more than their colleagues nationally, while workers at stores just outside the M25 receive the 60p per hour 'location supplement'.

GMB is saying that any workers who do not agree to the new conditions will have the new contract imposed on them, and they could lose their job if they refuse to sign it.

A consultation on the changes is currently underway, with implementation planned for November. More than 7,000 workers would be affected.

Asda workers across the UK have received a ten per cent increase in base pay this year. In the last financial year, they were paid £10.10 per hour.

With the national minimum wage rising to £10.42 in April, base pay for Asda workers was raised to £11 per hour. A further increase of 11p per hour is coming in July.

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Commenting on the proposed changes, Nadine Houghton, GMB organiser, said: "Cutting the pay of 7,000 low-paid, retail workers during a cost-of-living crisis is inexcusable. 

"The billionaire Issa Brothers and their business partners the multi-millionaire elite private equity fund managers in TDR Capital are restructuring Asda in preparation for the debt laden merger they are trying to push through with EG Group. 

"If the business secretary allows this merger to go ahead, she will be responsible for allowing a deal that is bad for workers, bad for consumers and bad for the high street.

"These slash and burn tactics, along with food and fuel price increases, will only ramp up if the merger goes ahead. TDR and the Issa Brothers will be using Asda’s revenues to pay off their debt mountain – this is money that should be invested in stores, colleagues and ensuring proper competition in pricing. 

"Asda’s workers and consumers should not bear the brunt of financial engineering from private equity." 

In response, a spokesperson for Asda said: "We are holding a collective consultation in a small number of stores outside the M25 where colleagues are currently paid a legacy location supplement of 60p per hour on top of their existing rate of £11 per hour.

"This supplement is out of line with the wider retail market and has created an anomaly where some Asda colleagues in stores that are close together are paid different rates.

"As part of this consultation, we are discussing a compensatory payment for colleagues in return for the removal of this location supplement, if the proposal goes ahead.

"These discussions are ongoing and no final decision has been taken.”