Usdaw took legal action over the supermarket chain’s proposals to fire staff at Daventry and Lichfield distribution centres and rehire them on lower pay in 2021. After the High Court ruled in the union’s favour in 2022, Tesco successfully appealed against the decision the same year. The union then took the case to the country’s highest court, with five Supreme Court justices today ruling unanimously that Tesco should be blocked from dismissing the staff.
The case arose after Tesco planned to close some of its distribution centres in 2007 and offered staff ‘retained pay’ for them to relocate. In 2021, the chain wished to bring ‘retained pay’ to an end and told staff that the enhancement would be removed in return for a lump sum, or their contracts would be terminated and then reoffered on the same terms, but without the increased salary. Usdaw argued that ‘retained pay’ was described as ‘permanent’ in the staff’s contracts, meaning it could not be removed.
Paddy Lillis - Usdaw general secretary, says: “Usdaw has been determined to stand by its members in receipt of this valuable benefit that constituted a key component of their pay. We recognised that they had been afforded this payment because of their willingness to serve the business and it was on that basis that we agreed with Tesco that it should be a permanent right.
“When we said permanent, we meant just that. We were therefore appalled when Tesco threatened these individuals with fire and rehire to remove this benefit. These sorts of tactics have no place in industrial relations, so we felt we had to act to protect those concerned.
“We were very disappointed with the outcome in the Court of Appeal but always felt we had to see this case through. We are therefore delighted to get this outcome, which is a win for the trade union movement as a whole.”
Neil Todd, a partner at law firm Thompsons Solicitors, which represented Usdaw, says: “This is a fantastic judgement for Usdaw and the members concerned. Those in receipt of retained pay were promised unequivocally that they would be afforded a permanent benefit under their employment contract if they agreed to remain with the business and support it when it needed them most.
“They were then threatened with ‘fire and rehire’ when Tesco considered that the benefit had served its purpose. This decision illustrates that a court will intervene to give effect to the parties’ intentions when entering into a contract. It also demonstrates that a right to an injunction is available regarding a breach of contract of employment when damages are not an adequate remedy, as was the case here.
“The injunction will prevent this important right from being stripped away. The litigation has been hard fought, but we are delighted to achieve an outcome that we consider just in all circumstances.”
Notes for editors:
Usdaw (Union of Shop, Distributive and Allied Workers) is one of the fastest growing unions in the TUC and the UK's fifth biggest trade union with around 360,000 members. Most Usdaw members work in the retail sector, but the union also has many members in transport, distribution, food manufacturing, chemical industry and other trades www.usdaw.org.uk
Supreme Court Decision: www.supremecourt.uk/decided-cases/index.html
For further information please contact Usdaw’s Media Officer, David Williams on: 0161 249 2469, 07798 696 603 or by e-mail to [email protected]
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