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Tesco loses ‘fire and rehire’ court case after distribution centre pay dispute
The long running battle began in 2021 after Tesco proposed to lay off staff at its Daventry and Lichfield distribution centres and then rehire them on lower pay.
The move was challenged by Usdaw and a year later the High Court ruled in the union’s favour.
However, Tesco successfully appealed the decision that same year, prompting Usdaw to take the case to the Supreme Court.
On 12 September 2024, five justices unanimously ruled that Tesco should be blocked from dismissing the staff.
In a statement, a spokesperson for Tesco said that retailer accepted the Supreme Court’s judgment.
Usdaw 'delighted' with the outcome
The origins of dispute date all the way back to 2007, when staff at closing distribution centres were given enhanced retained pay in order to relocate.
But in 2021 it was announced that the enhancement would be removed, in return for a lump sum or the termination of their contract and the reoffering of a role without the increased salary.
In court, Usdaw argued that as the ‘retained pay’ was described as ‘permanent’ in the staff’s contracts, it could not be removed.
“We recognised that they had been afforded this payment because of their willingness to serve the business and it was on that basis that we agreed with Tesco that it should be a permanent right,” said Usdaw general secretary Paddy Lillis.
“When we said permanent, we meant just that. 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.”
Lillis concluded: “We were very disappointed with the outcome in the Court of Appeal but always felt we had to see this case through. We are therefore delighted to get this outcome, which is a win for the trade union movement as a whole.”
Neil Todd, partner at Thompsons Solicitors which represented Usdaw, commented: “This is a fantastic judgement for Usdaw and the members concerned.
“It demonstrates that a right to an injunction is available regarding a breach of contract of employment when damages are not an adequate remedy, as was the case here. The injunction will prevent this important right from being stripped away.”
Meanwhile, the Tesco spokesperson 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.”
In other news, the Competition and Markets Authority has launched an inquiry into the proposed acquisition of two ForFarmers owned feed mills by Boparan Private Office.
