Retail trade union Usdaw, represented by social justice law firm Thompsons Solicitors, has succeeded in a claim against Tesco in a High Court battle, which will protect its workers from unfair ‘fire and rehire’ tactics.

Usdaw brought the case on behalf of 42 workers employed by the supermarket giant in its Daventry and Lichfield distribution centres. The group faced having their wages cut as part of a change to their terms and conditions of employment by Tesco. The High Court ruling will prevent the supermarket’s ‘fire and rehire’ practice in this case, where it had sought to lay people off and re-employ them on new contracts, with less favourable terms and conditions, in England.

The court noted that the 42 workers had been guaranteed an entitlement to a specific payment labelled ‘retained pay’ to keep them within the business, which Tesco intended to remove by firing and then rehiring them. The judge held that there was an implied term in the workers’ contracts that the right to terminate employment could not be exercised if the aim was to remove a right to ‘retained pay’.

Neil Todd, a trade union specialist at Thompsons Solicitors, said:

“This is a huge win for the workers and for Usdaw. The practice of firing and rehiring staff on less favourable terms and conditions has been in widespread use over the last 18 months as employers try to erode rights that have been hard fought for and are there to protect some of the lowest paid in society. Tesco had made unequivocal commitments to its workers who had come into work throughout the lockdown, when it needed them most. The court agreed that, in those circumstances, it wasn’t then open to them to deploy fire and rehire tactics when it suited them. We are proud to have represented a trade union in taking on corporate giants who use fire and rehire tactics against the staff who had served them so loyally.”

This isn’t the first fire and rehire crisis that has embroiled Tesco. Its workers in Scotland have already secured an injunction, pending a full trial, on the same proposal.

Joanne McGuinness - Usdaw National Officer added:

“Companies are more frequently resorting to using fire and rehire tactics when they want to reduce employees’ terms and conditions of employment. Rather than reaching an agreement with the employees or their union, they simply threaten the employees with termination of their contracts, leaving them with an impossible choice. In this case, in around 2007 Tesco was beginning a vital distribution expansion programme and therefore, to ensure that valued members of staff agreed to transfer location to new distribution sites, Tesco made assurances that those staff would retain the difference in their pay between their existing package and the new terms and conditions they would move to at those new sites.

“Importantly they assured Usdaw that this would not be removed at a future date. Despite this, some 14 years later Tesco reneged on its promises and sought to buy out this retained pay and threatened its employees with dismissal if they did not sign up to a new contract without the retained pay element. Tesco refused to negotiate with Usdaw who were left with no option but to seek a legal solution so as to protect its members’ pay.”