Union hails ‘huge win’ in ‘firing and rehiring’ fight with Tesco

Lawyers representing a union have hailed a judge’s ruling on a “firing and rehiring” High Court fight with Tesco as a “huge win” for workers.

Usdaw said Tesco was acting “unconscionably” by trying to “unilaterally remove” workers’ entitlement to retained pay.

Tesco disputed the claims and has indicated that it will consider an appeal.

A High Court judge on Thursday made rulings in favour of Usdaw.

Mrs Justice Ellenbogen, who is based in London, had considered arguments at an online High Court hearing in May.

Lawyers representing Usdaw had said Tesco was proposing to issue notices of termination and offer re-engagement on new terms which did not include retained pay.

Union bosses asked Mrs Justice Ellenbogen to “restrain” Tesco.

Lawyers representing Tesco said bosses were using a “contractual mechanism” open to employers.

Lawyer Neil Todd, who represented Usdaw and is based at Thompsons Solicitors, said, after the ruling: “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.”

Joanne McGuinness, Usdaw’s 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.”

A spokeswoman for Thompsons Solicitors said Usdaw had succeeded in a claim against Tesco which would “protect its workers from unfair fire and rehire tactics”.

She said Usdaw had brought the case on behalf of 42 workers employed by Tesco at distribution centres in  Daventry, Northamptonshire, and Litchfield, Staffordshire.

“The group faced having their wages cut as part of a change to their terms and conditions of employment by Tesco,” she added.

“Today’s 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’.”

A Tesco spokesman said: “A very small number of colleagues in our UK distribution network receive a supplement to their pay, which was offered a number of years ago as an incentive to retain colleagues.

“We now have over 16,000 colleagues working in distribution, the vast majority of whom do not receive this top up, and so we took the decision last year to phase it out.

“We made a fair offer to colleagues, and many of them chose to accept this. We are disappointed with today’s outcome and we are currently considering whether we will appeal this decision.”

TUC general secretary Frances O’Grady said the ruling was a “resounding victory in the battle against fire and rehire” and “a win for the union movement”.

“Too many employers think they have free rein to threaten workers in secure jobs with the sack if they don’t accept a new contract on worse pay or conditions,” she added.

“Today’s judgment is an important win against an employer trying to use this scandalous practice to end a promised permanent benefit.”