The Union of Shop, Distributive and Allied Workers (USDAW) are hailing a ‘huge win’ after the High Court ruled against Tesco supermarket introducing ‘fire and hire’ tactics at their distribution centres.
The claim against Tesco was made on behalf of forty-two employees - represented by Thompson Solicitor’s - who faced changes to their terms of employment which would have meant a loss of pay.
The workers involved in the claim are employed at Tesco distribution centres in Daventry and Litchfield. They had previously been given an entitlement known as retained pay - which the company proposed to remove - by firing and then rehiring them.
Mrs Justice Ellenbogen stated that the “difficulty” of the case was not in the intention to dismiss and re-engage staff - but in the intention to terminate the original contract for the purpose of extinguishing or diminishing the right to retain pay.
In her decision, the judge said there was “….an implied term that Tesco will not exercise the right it would otherwise enjoy to give notice to terminate such a contract for the purposes of removing the right to retained pay.”
Neil Todd - of Thompsons Solicitors, who specialise in trade union law - said that the firm were:
“…proud to have represented a trade union in taking on corporate giants.”
He added:
“Tesco had made unequivocal commitments to its workers who had come into work throughout the lockdown, when it needed them most. The court agreed that, in those circumstances, it wasn’t then open to them to deploy fire and rehire tactics when it suited them.”
“This is a huge win for the workers and for USDAW. The practice of firing and rehiring staff on less favourable terms and conditions has been in widespread use over the last 18 months as employers try to erode rights that have been hard fought for and are there to protect some of the lowest paid in society.”
As a result of the ruling, experts have said it has given firms cause to carefully consider their planned changes to contracts.
James Potts - Director of Legal Services at Peninsula - said:
“Even if they consult fully, have a justifiable business case and negotiate with employees, there still may be an underlying risk that employers will not be able to enforce changes to existing terms.”
Joanne McGuinness - national officer for USDAW - said:
“Companies are more frequently resorting to using fire and rehire tactics when they want to reduce employees’ terms and conditions of employment. The group faced having their wages cut as part of a change to their terms and conditions of employment by Tesco. Today’s High Court ruling will prevent the supermarket’s ‘fire and rehire’ practice in this case where it had sought to lay people off and re-employ them on new contracts, with less favourable terms and conditions, in England. The court noted that the forty-two workers had been guaranteed an entitlement to a specific payment labelled ‘retained pay’ to keep them within the business, which Tesco intended to remove by firing and then rehiring them. The judge held that there was an implied term in the workers’ contracts that the right to terminate employment could not be exercised if the aim was to remove a right to ‘retained pay’.”
Frances O’Grady - TUC General Secretary - commented:
“This is a resounding victory in the battle against fire and rehire - and, thanks to USDAW, a win for the union movement. Too many employers think they have free rein to threaten workers in secure jobs with the sack if they don’t accept a new contract on worse pay or conditions. Today’s judgment is an important win against an employer trying to use this scandalous practice to end a promised permanent benefit. But we can’t just rely on the courts to protect working people using current weak laws - we need action from government too. It’s time for ministers to finally deliver on their manifesto promise to protect and enhance workers’ rights - that means stopping fire and rehire without delay.”
Tesco have indicated that they are considering appealing the decision.
