The Supreme Court ruled against Tesco in a significant legal case concerning employee rights.
- Tesco’s attempt to alter employment contracts to remove ‘retained pay’ was judged unlawful.
- This decision concludes a major legal battle between Tesco and the Usdaw union.
- The ruling emphasises the protection of workers’ contractual rights in the UK.
- Tesco has acknowledged the decision while asserting its fairness towards employees.
The UK Supreme Court has delivered a landmark ruling against Tesco, deciding that the company cannot unilaterally alter employment contracts to eliminate ‘retained pay’ benefits. This decision reinforces the legal protection afforded to workers’ contractual rights, marking a pivotal moment in employment law.
Initially, the Usdaw union and its members at Tesco’s Daventry and Lichfield distribution centres took legal action against the supermarket giant. They argued that Tesco’s attempt to ‘fire and rehire’ staff on inferior terms was an unjust tactic to remove the ‘retained pay’ clause that had been agreed upon in 2007 as part of a relocation incentive.
In April, the High Court supported the workers, granting an injunction to prevent Tesco from terminating their contracts for the purpose of rescinding ‘retained pay’. When Tesco appealed, the case progressed to the Supreme Court. The final verdict has upheld the earlier ruling, thereby safeguarding the affected employees’ rights.
Usdaw’s General Secretary, Paddy Lillis, hailed the victory as a triumph for the trade union movement, asserting that such ‘fire and rehire’ strategies have no place in modern industrial relations. Lillis stated, ‘We were therefore appalled when Tesco threatened these individuals with fire and rehire to remove this benefit.’
Tesco responded to the judgement by accepting the Supreme Court’s decision, reiterating their commitment to fair treatment of their distribution centre employees. A spokesperson expressed that their aim was always to ensure fairness across their distribution network, and they had offered competitive alternatives to the affected employees when the decision to phase out the ‘retained pay’ was made.
The Supreme Court’s decision marks a significant moment in upholding workers’ rights within the UK’s legal framework.
