Union wins Tesco ‘fire and rehire’ case

A shop workers’ union has won a Supreme Court battle against Tesco over so-called “fire and rehire” plans put forward by the supermarket giant.

The row erupted in 2021 after Tesco proposed firing staff at some distribution centres and rehiring them on lower pay.

The Usdaw union said it was “delighted to get this outcome”.

Tesco said it accepted the Supreme Court judgement which it said affected “a very small number of colleagues”.

In 2007, Tesco planned to close some of its distribution centres, and offered staff increased “retained pay” so they would relocate.

The union took legal action in 2021 after Tesco proposed getting rid of this retained pay by either offering staff a lump sum to replace it, or terminating their contracts and rehiring them without the increased salary.

Usdaw argued that the retained pay had been described as “permanent” in their contracts, so should be ongoing.

But Tesco described the pay as a “contractual mechanism” open to employers.

Usdaw brought the legal action with three Tesco employees who work at distribution centres in Daventry and Lichfield.

The employees are also voluntary union representatives, a union spokesman said.

The case affects roughly 50 people who work in those centres, he said.

There is a separate case involving workers at the Livingston distribution centre going through the Scottish courts which also affects about 50 people.

Usdaw won an injunction in 2022 which stopped Tesco from carrying out its plans, but Tesco successfully got that ruling overturned on appeal.

On Thursday the Supreme Court reversed that decision, saying Tesco’s right to stop employees’ contracts could not be used to take away their enhanced pay.

Paddy Lillis, Usdaw’s general secretary, said the union had been “determined to stand by its members” and that the “valuable benefit” was “a key component of their pay”.

The union had been “appalled when Tesco threatened these individuals with fire and rehire to remove this benefit” and said the “tactics have no place in industrial relations”.

Tesco said the “vast majority” of distribution centre workers “do not receive this top-up”.

It decided to “phase it out” in 2021 and “made a competitive offer to affected colleagues at that time and many of them chose to accept this”.

It added that distribution centre workers “play a really critical role in helping us to serve our customers and we value all their hard work”.