Union victory in fire and rehire case

Retail union Usdaw has succeeded in its long-running fire and rehire case against Tesco (USDAW and others v Tesco Stores [2024] UKSC 28) (see Labour Research, September 2022, page 19; and March 2023, page 19).

The Supreme Court (SC) considered again the decision by Tesco to terminate the contracts of workers benefiting from “retained pay” in order to prevent them being entitled to these payments permanently.

In 2007, Tesco reorganised its warehouses, offering additional payments (“retained pay”) as an alternative to redundancy. Contracts described these payments as “permanent”, intended to be paid as long as someone remained in employment in the same role.

In 2021, Tesco tried to remove the payments, offering a lump sum instead, then choosing to fire and rehire on new terms when this was rejected.

Usdaw applied to the High Court for an injunction to prevent this, and initially succeeded. Tesco appealed and the Court of Appeal overturned that decision. The union appealed to the SC, which has restored the original decision.

The SC held that this term in the contracts meant the right to receive the payments would continue so long as employment in the same role continued.

Tesco’s right to terminate these employment contracts was qualified, and the term would have no value if Tesco could simply terminate employment to defeat the protection offered as “permanent”.