A trade union and leading law firm has expressed disappointment at the decision by Tesco to challenge a ‘fire and rehire’ ruling at the Court of Appeal later this week [9 June 2022].

The Union of Shop Distributive and Allied Workers (Usdaw) – represented by social justice law firm, Thompsons Solicitors – won a landmark legal victory in February against the supermarket giant over its decision to dismiss a number of its staff and seek to re-engage them on inferior terms and conditions.

Usdaw brought the initial case on behalf of 42 workers employed by Tesco in its Daventry and Litchfield distribution centres. The workers faced having their wages slashed as a consequence of their employer’s move.

February’s High Court ruling prevented the supermarket from using fire and rehire tactics against the workers and a permanent injunction was granted. The court held that the 42 employees had been guaranteed an entitlement to a specific payment labelled ‘retained pay’ to keep them within the business, which Tesco intended to remove by firing them and then rehiring them on a contract with the retained pay entitlement removed.

The judge ruled that there was an implied term in the workers ‘contracts that the right to terminate their employment could not be exercised if the aim was to remove the right to ‘retained pay’.

Tesco have decided to take the case to the Court of Appeal, a decision Usdaw expressed disappointment at given the workers’ loyal service to the company.

There is no justification for the company to pursue cost-cutting measures to the detriment of its staff. We will continue to fight alongside the trade union movement against employers that think they can get away with these kinds of cynical employment tactics.

Neil Todd, trade union specialist

Neil Todd, a trade union specialist at Thompsons Solicitors, said: “The High Court ruling in February was a well-reasoned and unequivocally clear judgement. The employer has made specific commitments to these workers about Retained Pay and the court found that it was unlawful for Tesco to renege on that commitment using fire and rehire tactics if the end result was to deprive those workers of the very payments it had guaranteed.

“There is no justification for the company to pursue cost-cutting measures to the detriment of its staff. We will continue to fight alongside the trade union movement against employers that think they can get away with these kinds of cynical employment tactics.”

This isn’t the first fire and rehire crisis that Tesco has become embroiled in. Its workers in Scotland have already secured an injunction, pending a full trial, on a similar move there.

Joanne McGuinness - Usdaw National Officer added: “We are disappointed that Tesco has decided to appeal the victory we secured for our members’ and hope the court of appeal will also back the right to retained pay and reject enforced contractual changes through the use of fire and rehire.

“In this case, in around 2007 Tesco was beginning a vital distribution expansion programme and therefore to ensure that valued members of staff agreed to transfer location to new distribution sites, Tesco made assurances that those staff would retain the difference in their pay between their existing package and the new terms and conditions they would move to at those new sites.

“Importantly they assured Usdaw that this would not be removed at a future date. Despite this, some 15 years later Tesco reneged on its promises and sought to buy out this retained pay and threatened its employees with dismissal if they did not sign up to a new contract without the retained pay element. Tesco refused to negotiate with Usdaw who were left with no option but to seek a legal solution so as to protect its members’ pay.”