The UK Supreme Court has ruled that Tesco UK was not entitled to terminate some employees’ contracts and rehire them for lower pay, RTÉ reported last week.
Usdaw, a shopworkers union, took legal action against the retail giant after it sought to remove some warehouse workers’ entitlement to higher pay.
The dispute centred on a number of warehouse workers’ entitlement to enhanced pay for agreeing to move to a new distribution centre in 2007.
When Tesco sought to remove the entitlement in 2021, it offered a lump sum payment to the workers saying that if they did not accept the agreement the retailer would terminate their contracts and offer a new contract without the increased pay included.
Usdaw won its initial injunction to prevent the fire and rehire of warehouse staff, but Tesco overturned that ruling in 2022 leading to the most recent court case.
'Fire And Rehire'
Tesco said it accepts the ruling, with a spokesperson clarifying that the situation related to “a very small number of colleagues in our UK distribution network who receive a supplement to their pay.”
The spokesperson added, “Our objective in this has always been to ensure fairness across all our distribution centre colleagues.”
Oliver Segal, Usdaw’s lawyer in the case, said in court documents for the appeal in April that led to last week’s ruling that Tesco was effectively arguing that it has an “unrestricted freedom to terminate the relationship ‘at will’.”
Tesco, on the other hand, has argued that the affected workers had received increased pay worth thousands of pounds each for more than a decade.
The Labour government in the UK said it plans to outlaw ‘fire and rehire’ tactics, but has yet to put a plan in place as to how it would do so.
A spokesperson for Britain’s Department for Business and Trade said, “We will be bringing forward legislation soon to put an end to unscrupulous fire and rehire practices, which have no place in a modern labour market.”
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