The Supreme Court ruled Tesco was not permitted to use ‘fire and rehire’ to remove some workers’ increased pay
12 September 2024 - 14:33
bySam Tobin
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
A Tesco supermarket in Potters Bar, the UK. Picture: Picture: BLOOMBERG/CHRIS RATCLIFFE
London — Tesco was not entitled to terminate some employee’ contracts and offer to rehire them on less favourable terms, the UK’s Supreme Court ruled on Thursday.
Shopworkers’ union USDAW took legal action against Britain’s biggest retailer after Tesco sought to remove some warehouse workers’ entitlement to increased pay.
Tesco ended their contracts and offered to re-engage them — a controversial practice often referred to as “fire and rehire”.
Britain’s governing Labour Party has said it will outlaw “fire and rehire” tactics, but has yet to set out how it will replace current codes of practice.
The Supreme Court ruled that Tesco was not permitted to use “fire and rehire” to remove some workers’ increased pay and restored an injunction preventing the retailer from doing so.
Tesco, which has a British grocery market share of nearly 28%, said it accepted the ruling. A spokesperson said it related to “a very small number of colleagues in our UK distribution network who receive a supplement to their pay”.
“Our objective in this has always been to ensure fairness across all our distribution centre colleagues,” the spokesperson added.
Paddy Lillis, USDAW general secretary, said in a statement that the ruling was “a win for the trade union movement as a whole”.
Lillis said of “fire and rehire” itself: “These sorts of tactics have no place in industrial relations, so we felt we had to act to protect those concerned.”
The dispute centred on certain warehouse workers' entitlement to enhanced pay for agreeing to move to a new distribution centre back in 2007.
When Tesco sought to remove the entitlement in 2021, it asked workers to agree to its removal for a lump-sum payment or else their contract would be terminated and a new contract offered without the increased pay included.
USDAW initially won an injunction, which prevented Tesco from dismissing the warehouse workers and offering them new contracts, but Tesco overturned that ruling in 2022.
The union’s lawyer, Oliver Segal, said in court documents for the appeal in April that led to Thursday’s ruling that Tesco was effectively arguing it has an “unrestricted freedom to terminate the relationship ‘at will’.”
Tesco, however, argued the affected workers had received increased pay worth thousands of pounds each for more than a decade.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Tesco loses ‘fire and rehire’ case in UK
The Supreme Court ruled Tesco was not permitted to use ‘fire and rehire’ to remove some workers’ increased pay
London — Tesco was not entitled to terminate some employee’ contracts and offer to rehire them on less favourable terms, the UK’s Supreme Court ruled on Thursday.
Shopworkers’ union USDAW took legal action against Britain’s biggest retailer after Tesco sought to remove some warehouse workers’ entitlement to increased pay.
Tesco ended their contracts and offered to re-engage them — a controversial practice often referred to as “fire and rehire”.
Britain’s governing Labour Party has said it will outlaw “fire and rehire” tactics, but has yet to set out how it will replace current codes of practice.
The Supreme Court ruled that Tesco was not permitted to use “fire and rehire” to remove some workers’ increased pay and restored an injunction preventing the retailer from doing so.
Tesco, which has a British grocery market share of nearly 28%, said it accepted the ruling. A spokesperson said it related to “a very small number of colleagues in our UK distribution network who receive a supplement to their pay”.
“Our objective in this has always been to ensure fairness across all our distribution centre colleagues,” the spokesperson added.
Paddy Lillis, USDAW general secretary, said in a statement that the ruling was “a win for the trade union movement as a whole”.
Lillis said of “fire and rehire” itself: “These sorts of tactics have no place in industrial relations, so we felt we had to act to protect those concerned.”
The dispute centred on certain warehouse workers' entitlement to enhanced pay for agreeing to move to a new distribution centre back in 2007.
When Tesco sought to remove the entitlement in 2021, it asked workers to agree to its removal for a lump-sum payment or else their contract would be terminated and a new contract offered without the increased pay included.
USDAW initially won an injunction, which prevented Tesco from dismissing the warehouse workers and offering them new contracts, but Tesco overturned that ruling in 2022.
The union’s lawyer, Oliver Segal, said in court documents for the appeal in April that led to Thursday’s ruling that Tesco was effectively arguing it has an “unrestricted freedom to terminate the relationship ‘at will’.”
Tesco, however, argued the affected workers had received increased pay worth thousands of pounds each for more than a decade.
Reuters
Quantum’s boardroom battles take investors on a bumpy ride
WATCH: Libstar CEO Charl de Villiers on double-digit earnings jump
Retail workers need 21 months to earn what CEOs earn a day
CHRIS GILMOUR: No end in sight for Shoprite’s spectacular growth
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.