ASDA was accused by a Labour MP today of using a new wages system as a smokescreen to slash the income of 3,000 staff.

Siobhain McDonagh, MP for Mitcham and Morden, said that the chain, which has its British head office in Leeds, is changing the contracts of 60,000 staff to raise their basic pay.

But the changes also include slashing overtime rates, abolishing paid breaks and cutting the hours of night-shift workers, costing them around £500 a year each.

Ms McDonagh also said that staff who do not sign the new contracts would be “forced to resign.”

She said she had met Asda’s senior director for public affairs Chris Lowe and written to chief executive Roger Burnley about her concerns.

“Asda is one of the high street’s most long-standing and well-respected brands,” Ms McDonagh said. “Of course, I welcome any increase in basic pay, but I am completely appalled that this is being used as a smokescreen to slash the salaries of 3,000 of their most loyal staff.”

Asda did not respond to a request for comment by the Morning Star.

The staff are organised by general union GMB, whose national officer Gary Carter said: “Absolutely nothing has been agreed with GMB and we will fight any imposition of these contracts on our members.

“Asda is performing well and is highly profitable because of the hard work of our members, who are the backbone of the company.

“We expect Asda to enter negotiations with a commitment to improving terms and conditions for the whole workforce.”