16 September 2024
The Supreme Court has ruled that an injunction be placed on Tesco barring them from terminating employees to deprive them of additional pay implied in their contracts.
The case relates to workers who were asked to relocate upon the closure of some Tesco distribution centres. The workers took part in an agreement that saw them receive additional “retained pay” as an incentive for relocating, the terms stated that this additional payment was a permanent feature.
According to the supreme court press release, a separate clause in the employment contracts gave Tesco a contractual right to dismiss employees. Tesco sought to end the retained pay agreement, informing employees in receipt that if they did not consent to its removal they would be dismissed and re-engaged on the same terms, minus the retained pay clause.
Some employees, along with the Union of Shop, Distributive and Allied Workers (USDAW), took the matter to the High Court where an injunction was granted to prevent their termination. The Court of Appeal allowed Tesco to appeal, and the claimants took a further appeal to the Supreme Court, who reimplemented the injunction.
With future plans to change the way ‘fire and rehire’ practices are utilised, it will be interesting to see if this case and its decisions play a part in identifying where the practice is used to strip individuals of rights rather than for genuine business purposes.
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