Asda and workers union Unite have launched a joint initiative to change the way more than 6,000 staff are employed across the supermarket's 29 meat and poultry suppliers.

Unite has regularly criticised the way supermarkets drive down costs along the supply chain, claiming that they create a two-tier labour market and leave agency workers on poorer terms of employment.

But as part of the new initiative, agency workers and the directly employed will be paid equally. A second objective is to maximise direct employment, ending the sometimes semi-permanent status of agency workers. In future the, agency work will be undertaken chiefly to meet seasonal fluctuations.

"We warmly welcome Asda's pioneering initiative," said Unite's deputy general secretary Jack Dromey. "For years, supermarkets have driven down costs along their supply chain with tens of thousands of workers paying the price with discriminatory and unfair practices.

"It is wrong to exploit migrant agency workers on poorer conditions of employment and it is wrong to undercut directly employed workers on better conditions of employment. That divides workforces and damages social cohesion in local communities."

Asda said it had been quick to act when Unite raised concerns. "Our suppliers have all responded well to the challenge of ensuring equal pay and permanency for agency workers. We'd encourage other retailers to engage with both Unite and their supply bases to face these important issues."