Tesco’s legal ban on using the ‘fire and rehire’ employment tactic was overruled by the Court of Appeal last week, in a move which allows the supermarket giant to dismiss and re-employ workers on different contractual terms.
The original dispute saw Tesco banned from using the controversial practise after it had been found to dismiss a number of staff at its distribution centres before then seeking to re-employ them on less favourable contracts.
In Tesco’s case, it had been using the approach to phase out enhanced payment terms from the workers’ contracts.
Known as ‘fire and rehire’, the tactics are used by employers looking for ways to cut costs. Tesco had previously been told by the courts that the approach was illegal; a ruling that was overturned in court last week.
READ MORE: Tesco loses High Court battle over ‘unfair’ fire and hire practice
The case was originally brought on behalf of 42 Tesco workers at distribution centers who claimed that the grocer was attempting to fire and rehire them on a worse contract, without retained pay.
Workers union Usdaw – which brought the claim on behalf its members – workers had been told to give up their entitlement to retained pay – something they said had been had been permanent and “guaranteed for life”.
It had originally had been awarded in 2007 as an incentive for employees to relocate to the two sites.
However, in last week’s Court of Appeal judgment, Lord Justice Bean said there was nothing in the retained pay provisions that would “prevent the employer from giving notice to terminate the contract in the usual way”.
A Tesco spokesperson said: “We are considering our next steps following today’s ruling, and will continue to work constructively with the small number of colleagues affected to agree a way forward.”
Joanne McGuinness, a national officer at Usdaw said the union would seek permission to appeal the ruling at the Supreme Court.
“Today’s ruling overturning that injunction will not deter us,” she said.
“It is simply not right that very clear commitments to loyal workers can be simply set aside on a whim as it is no longer convenient for the company.”
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