The Supreme Court has granted the Union of Shop Distributive and Allied Workers (Usdaw) permission to proceed with its case against Tesco – in an ongoing battle over the supermarket giant’s use of ‘fire and rehire’ practices.

Yesterday [21 December 2022] the highest court in the UK permitted the union – which is represented by social justice law firm, Thompsons Solicitors – to proceed with its case against Tesco, which wants to fire and rehire its staff in order to remove their entitlement to a long-term financial benefit called Retained Pay.

The case relates to workers employed by Tesco in its Daventry and Litchfield distribution centres who won a landmark legal victory in February preventing an attempt to dismiss them and remove their right to Retained Pay. The High Court found that, as the parties had agreed Retained Pay was “permanent” and “guaranteed for life”; Tesco was not entitled to serve notice on the contract when its sole purpose for doing so was to remove the benefit in question. An injunction was granted to ensure Tesco was prevented from doing this.  

A deeply disappointing decision was then made by the Court of Appeal in July which determined that the fact that the collective agreements contained references about Retained Pay being “permanent”, only meant it was guaranteed for the life of a particular contract of employment and there was no mutual intention from the language used that it would last beyond that. On this basis the injunction was discharged leaving Tesco able to serve notice on the contracts to remove the benefit.

Usdaw made it very clear following the Court of Appeal judgment that it would continue its fight and the Supreme Court has now given the union permission to do so. Usdaw maintains that “permanent” should mean exactly “what it says on the tin”, that the terms agreed between the parties about Retained Pay were absolutely clear as were the mutual intentions of the parties in agreeing those terms.

Neil Todd, a trade union specialist at Thompsons Solicitors, said: “We are delighted to have been given permission by the Supreme Court to proceed with this important case. The fight against fire and rehire is a pivotal one for the whole trade union movement.

“Tesco faces a fight as USDAW is resolute that the workers concerned were given clear commitments by Tesco that Retained Pay was to be a permanent feature of their income.”

Joanne McGuinness – Usdaw National Officer - added: “It has always been clear to us what we agreed with Tesco in respect of our members in receipt of Retained Pay. That is that they would have a right to this payment for as long as they remained employed by Tesco in their current role. The agreement was reached at a time when the organisation needed these individuals to remain in post as it could not have been operationally effective if they had chosen to leave. The workers agreed to remain in the business and relocate on the basis of the guarantee of these payments when they otherwise may have taken redundancy.

“We were therefore shocked when Tesco adopted fire and rehire tactics to try and strip this right away and this is why we sought an injunction from the High Court. We were very disappointed by the outcome at the Court of Appeal but we made clear it would not end there without some recompense for our members and we would exhaust every avenue to protect our members’ terms and conditions of employment. The decision to grant permission is a further step doing everything we can to continue this fight.”