The UK’s Supreme Court has ruled against Tesco’s ‘fire and rehire’ practices.
- Tesco attempted to change some workers’ contracts to less favourable terms.
- The legal challenge was led by the workers’ union Usdaw against Tesco’s actions.
- Tesco’s appeal was overturned, reinstating an injunction against ‘fire and rehire’.
- The ruling is hailed as a significant victory for trade union rights.
The Supreme Court of the United Kingdom has delivered a decisive judgment against Tesco’s controversial ‘fire and rehire’ strategy, marking a pivotal moment in the ongoing legal saga. Initially, Tesco sought to terminate the contracts of certain warehouse employees only to offer re-employment under less advantageous conditions. This manoeuvre was challenged in court by the shopworkers’ union, Usdaw, which represents the affected workers.
This legal dispute revolved around Tesco’s attempt to eliminate ‘retained pay’ — a benefit previously negotiated for some employees. Usdaw had secured an injunction in 2022 to prevent Tesco from proceeding with these changes. An appeal by Tesco had temporarily overturned this injunction, but the recent Supreme Court ruling has restored it, affirming the workers’ rights to benefits previously agreed upon.
In delivering the judgment, the court, led by judges including Lord Reed and Lady Simler, concluded that the notion of Tesco unilaterally ending employment contracts to modify pay was untenable. The judges noted that such actions were incompatible with common industrial practices and expectations, emphasising that the parties involved had never intended for the contracts to be altered at Tesco’s discretion.
Tesco has accepted the Supreme Court’s ruling. A spokesperson for the company highlighted the importance of fairness and reiterated their commitment to engaging constructively with Usdaw and the affected employees. The spokesperson clarified that the dispute involved a small subset of the workforce who had historically received additional pay benefits, which Tesco decided to phase out starting from 2021.
Paul Lillis, the general secretary of Usdaw, expressed satisfaction with the outcome, underlining the union’s commitment to defending the accrued rights of its members. Lillis described the tactics employed by Tesco as unacceptable in industrial relations. Similarly, Neil Todd from Thompsons Solicitors praised the court’s decision, highlighting its significance in upholding contractual rights when ordinary legal remedies are insufficient.
This ruling establishes a significant legal precedent affirming employee rights against unilateral contract changes.
