Tesco will appear before the Supreme Court next week as union leaders challenge a Court of Appeal ruling on the supermarket’s controversial “fire and rehire” tactics.
The case, which will be heard on Tuesday 23 and Wednesday 24 April, is part of a long-running legal battle between the two.
Usdaw members employed by Tesco in its Daventry and Litchfield Distribution Centres won a landmark legal victory against the supermarket back in 2021 after it had proposed to remove “retained pay”, which the union claimed dismissed staff and offered to re-engage them on “inferior” terms and conditions.
The supermarket giant pursued this case further to the Court of Appeal and the original ruling was overturned a year later.
The high court found that as the parties had agreed this payment was “permanent” and “guaranteed for life”, the employer was not entitled to serve notice on the contract.
However, the Court of Appeal did not accept that the phrases “permanent” and “guaranteed for life” showed a mutual intention on behalf of both parties that the right to “retained pay” would continue as long as the employee in question performed the role in which they were currently employed to undertake.
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The court decided to remove the injunction in place preventing the Tesco from dismissing these workers, however, Usdaw secured permission in December 2022 to appeal the ruling at the Supreme Court.
Neil Todd, partner of the Trade Union Law Group at Thompsons Solicitors, the firm representing the workers, said: “The individuals we represent were made a wholly unambiguous commitment within their contract of employment that they would have the right to ‘retained pay’ for as long as they continued in their respective roles.
“We contend that ‘permanent’ means just that, and it was not open to Tesco to renege from that commitment and utilise fire and re-hire tactics solely to remove that right once it had served its purpose.”
Usdaw national officer Mark Todd added: “It has always been clear to us what we agreed with Tesco in respect of our members in receipt of ‘retained pay’. That is that they would have a right to this payment for as long as they remained employed by Tesco in their current role.
“The agreement was reached at a time when the company needed these individuals to remain in post as it could not have been operationally effective if they had chosen to leave. The workers agreed to remain in the business and relocate on the basis of the guarantee of these payments when they otherwise may have taken redundancy.”
“We were therefore shocked when Tesco adopted ‘fire and rehire’ tactics to try and strip this right away and then chose to pursue a small number of employees through every court in the land to deny them wages.
“Tesco is a highly profitable business and those profits are generated by the hard work and loyalty of our members. They deserve better than be subjected to ‘fire and rehire’ and extensive legal challenges.”
A Tesco spokesperson said: “The Supreme Court hearing relates to the contractual terms for a very small number of colleagues in our UK distribution network, who receive a supplement to their pay.
“This was offered many years ago as an incentive to retain colleagues, but the vast majority of our distribution colleagues today do not receive this top-up, and so we took the decision to phase it out.
“We made a fair offer to colleagues at that time, and many of them chose to accept this. Our first priority is to engage constructively with USDAW and the small number of colleagues affected.”
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