Tesco has lost its Supreme Court ‘hire and fire appeal’ as the judge ruled it cannot terminate the employment contracts of its employees, for the specific purpose of depriving them of “retained pay”.
In a judgement given today (12 September) the judges said Tesco’s employment contracts contained a term that said the supermarket giant could not fire employees just to take away their right to “retained pay”.
Today’s verdict marks the outcome of the Supreme Court case which took place in April this year, and the latest hearing in a long-running legal battle between the UK’s largest retailer and Usdaw union.
In 2007, Tesco offered a permanent “retained pay” enhancement to staff to relocate from closing distribution centres to new ones in Daventry and Lichfield under a collective agreement with Usdaw.
Usdaw members employed by Tesco in its Daventry and Litchfield distribution centres had previously won a landmark legal victory against the grocer after they said it had attempted to strip them of “retained pay”, which the trade union claimed dismissed staff and instead offered to re-engage them on “inferior” terms and conditions.
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Together with the union, several workers took the case to the High Court, where they won and were allowed an injunction to stop Tesco from terminating their employment to remove the “retained pay” term from the contract.
In response, the supermarket giant took the case to the Court of Appeal and then the Supreme Court to have the original judgement overturned.
Usdaw general secretary Paddy Lillis said he was “delighted” with the Supreme Court’s outcome, and described the judgement as a “win for the trade union movement as a whole.”
Lillis added: “We were therefore appalled when Tesco threatened these individuals with fire and rehire to remove this benefit. These sorts of tactics have no place in industrial relations, so we felt we had to act to protect those concerned”
A spokesperson for Tesco said the supermarket accepted the Supreme Court’s judgement.
They added: “Our colleagues in our distribution centres play a really critical role in helping us to serve our customers and we value all their hard work. Our objective in this has always been to ensure fairness across all our DC colleagues. Today’s judgment relates to a contractual dispute brought on behalf of a very small number of colleagues in our UK distribution network who receive a supplement to their pay.
“This supplement was offered many years ago as an incentive to retain certain colleagues and the vast majority of our distribution colleagues today do not receive this top up. In 2021, we took the decision to phase it out. We made a competitive offer to affected colleagues at that time, and many of them chose to accept this. Our aim has always been to engage constructively with USDAW and the small number of colleagues affected.”
