Asda has issued a statement after being accused of threats to cut the pay of 7,000 of its employees.
The GMB union has hit out at the supermarket giant after it told workers at 39 stores they could lose their 60p per hour 'location supplement' and have their night supplement reduced.
The union said those who do not agree "will have the new contract imposed on them and could be dismissed if they refuse to sign".
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The move comes amid a potential £12bn merger between Asda the the billionaire Issa brother's EG Group.
It also comes after Asda announced it was to give a 10% pay rise to over 115,000 employees at 663 of its stores.
GMB organiser Nadine Houghton 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."
An Asda spokesperson 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."
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