Tesco says it will accept a Supreme Court ruling in a so-called ‘fire and rehire’ case amid government efforts to bolster workers’ rights.
The Union of Shop Distributive and Allied Workers (Usdaw), along with three of its members at Tesco who also represent the union, took legal action over proposals in 2021 to fire staff at some distribution centres and rehire them on lower pay.
The case, which originally involved more than 360 workers – the majority at Livingston in West Lothian – arose after the supermarket chain offered staff higher “retained pay” to relocate in 2007.
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In 2021, the UK’s largest retailer announced plans to bring retained pay to an end and said that those affected would receive a lump sum instead.
If the offer was not accepted, the company said their contracts would be terminated and then reoffered on the same terms, but without the increased salary.
Usdaw argued that “retained” pay was described as “permanent” in the staff’s contracts, meaning it could not be removed, while Tesco said bosses were using a legitimate “contractual mechanism” open to employers.
The Supreme Court judgment followed earlier court wins for both parties – latterly Tesco at the Court of Appeal.
The five Supreme Court justices ruled unanimously that Tesco should be blocked from dismissing the staff.
They said: “Objectively, it is inconceivable that the mutual intention of the parties was that Tesco would retain a unilateral right to terminate the contracts of employees in order to bring retained pay to an end whenever it suited Tesco’s business purposes to do so.
“This would have been viewed, objectively, as unrealistic and as flouting industrial common sense by both sides.
“It would have been open to Tesco to negotiate a longstop date for the entitlement to retained pay or to make clear that the retained pay could be withdrawn if an employee were dismissed with notice and then re-employed in the…
