The supermarket has lost a court case over employee contracts, preventing them from dismissing workers and re-engaging them on a new contract which offers a lower amount of pay.

Tesco is looking to legally challenge a decision which prevents them from utilising ‘fire and rehire’ policies in a distribution centre in Livingston.

As part of this, the supermarket is temporarily prohibited from terminating workers’ employment contracts and re-hiring these workers on a contract that fails to retain their current pay.

Usdaw, a retail trade union that represented some workers of the Livingston distribution centre, found that if these policies had been enacted, staff could lose anywhere between £4,000 and £19,000 annually.

As such, the union called this ruling a “major victory in the fight against ‘fire and rehire’ tactics”.

Usdaw national officer Joanne McGuinness said:

We are very pleased to have secured this victory for our members who faced a huge cut in wages after Tesco moved to renege on a long-standing collective agreement made in good faith.

It is a major victory in the fight against ‘fire and rehire’ tactics, which are now being used by too many businesses.

The court delivered a temporary prohibition and we are now calling on the company to honour the judgment and withdraw its plans at all sites.

We stand ready to seek a permanent interdict for Livingston and a High Court injunction for the other sites to defend this unfair pay cut for hundreds of key workers.

Responding to the case, a spokesperson for Tesco admitted the company were “surprised at the decision” and will be looking into avenues of how they can legally challenge the ruling.

According to Tesco, the company’s motivation behind attempting to remove retained pay was to phase out a benefit that not all employees received.

The spokesperson stated:

Retained pay was offered a number of years ago as an incentive to retain colleagues.

Today we have over 16,000 colleagues working in distribution, the vast majority of whom do not receive this top-up, so we have taken the decision to phase it out.

We made a fair offer to those colleagues affected, and many of our colleagues have chosen to accept this.

However, this ruling is only a temporary decision and the judgement applies to the Livingston site only. Usdaw stated it would continue to fight for workers in the Litchfield, Daventry and Avonmouth branches.

Earlier this year, the Trades Union Congress (TUC) found that one in 10 workers were being asked to re-apply for their jobs on worse conditions during the pandemic.

Specifically affected by these tactics were young workers, people from a working class background and BME workers (Black, Minority Ethnic).

Frances O’Grady, General Secretary for the TUC, stated that ‘fire and rehire’ tactics have “no place in modern Britain and must be outlawed”.