Tesco has suffered a defeat in its 'hire and fire' appeal, with the Supreme Court concluding that it cannot end employee contracts to strip them of retained payment rights.
The ruling established that Tesco employees' contracts included terms preventing the retail behemoth from revoking their right to retained pay, as reported by .
This significant legal confrontation began in 2021 when workers from Tesco's Daventry and Litchfield distribution centres, supported by the trade union Usdaw, initiated proceedings.
READ MORE: {}
They alleged that the supermarket chain had terminated employment to rehire staff on "inferior" conditions, notably without retained pay.
Retention pay is typically awarded as a lump-sum to incentivise staff retention within an organisation.
In 2007, Tesco proposed such a compensation for employees who transferred from closing locations to new sites. However, in 2021, it sought to withdraw this benefit by dismissing employees and proposing revised contracts minus the clause.
Usdaw maintained that the term "retained" in contracts indicated permanence, making any effort to rescind it unlawful.
Although Tesco had managed to overturn a previous High Court decision in its favour in 2022, Usdaw escalated the matter to the nation's apex court, leading to the current verdict.
Most Read
Patrick Howarth, Partner at Foot Anstey, commented on the recent case, stating it is "important" and an "evident victory" for Usdaw. He also reassured that "retailers and other employers should not be concerned that their right to change terms of their employees' contracts has been removed. It hasn't."
He went on to say, "The most important takeaway for employment professionals and HR teams for this case is that communications between unions, employers and employees issued during consultation were held to be relevant to the interpretation of what particular contractual terms actually meant."
Additionally, he pointed out that "This case has been wrongly painted with the same brush as a number of the fire and re-hire cases hitting the headlines recently, with the facts of the case expanding beyond this."
In response to the ruling, a Tesco spokesperson stated that the supermarket acknowledges the Supreme Court's judgement. They also highlighted: "Our colleagues in our distribution centres play a really critical role in helping us to serve our customers and we value all their hard work. Our objective in this has always been to ensure fairness across all our DC colleagues. Today's judgement relates to a contractual dispute brought on behalf of a very small number of colleagues in our 海角视频 distribution network who receive a supplement to their pay."
"This supplement was offered many years ago as an incentive to retain certain colleagues and the vast majority of our distribution colleagues today do not receive this top up. In 2021, we took the decision to phase it out. We made a competitive offer to affected colleagues at that time, and many of them chose to accept this. Our aim has always been to engage constructively with USDAW and the small number of colleagues affected."