Tesco workers have won a High Court case protecting them from fire and rehire tactics.

The Union of Shop Distributive and Allied Workers (Usdaw) – represented by social justice law firm, Thompsons Solicitors – brought the case on behalf of 42 workers employed at the company’s Daventry and Litchfield distribution centres. 

Usdaw says the group faced having their wages cut as part of a change to their terms and conditions of employment by Tesco.

Fire and rehire practice prevented

It says the High Court ruling will prevent the supermarket from ‘fire and rehire’ practices. This is where as it says Tesco had planned to lay people off and re-employ them on new contracts, with less favourable terms and conditions.

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 re-hiring 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.

Usdaw comment

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.”

Usdaw said it was left with ‘no option but to seek a legal solution’ to protect its members’ pay because Tesco had refused to negotiate.