Tesco’s appeal against the High Court’s decision to ban it from terminating employees’ contracts and re-engaging them on new terms will be heard at the Court of Appeal tomorrow (9 June).
In February Mrs Justice Ellenbogen ruled in favour of the shop workers’ union Usdaw, which brought a claim on behalf of 42 members who worked at Tesco distribution centres in Northampton and Staffordshire.
The changes proposed by Tesco included terminating workers’ contracts and re-employing them on new ones which did not include retained pay. The retailer argued that it was using a “contractual mechanism” open to employers.
A permanent injunction against the move was put in place by the judge and an injunction against a similar move is in place in Scotland.
Usdaw national officer Joanne McGuinness said: “We are disappointed that Tesco has decided to appeal the victory we secured for our members and hope the Court of Appeal will also back the right to retained pay and reject enforced contractual changes through the use of fire and rehire.
“In this case, in around 2007 Tesco was beginning a vital distribution expansion programme and therefore to ensure that valued members of staff agreed to transfer location to new distribution sites, Tesco made assurances that those staff would retain the difference in their pay between their existing package and the new terms and conditions they would move to at those new sites.
Changing employment terms
“Importantly they assured Usdaw that this would not be removed at a future date. Despite this, some 15 years later Tesco reneged on its promises and sought to buy out this retained pay and threatened its employees with dismissal if they did not sign up to a new contract without the retained pay element. Tesco refused to negotiate with Usdaw who were left with no option but to seek a legal solution so as to protect its members’ pay.”
Neil Todd, a lawyer at Thompsons Solicitors who is representing the claimants, said: “The High Court ruling in February was a well-reasoned and unequivocally clear judgment. The employer has made specific commitments to these workers about retained pay and the court found that it was unlawful for Tesco to renege on that commitment using fire and rehire tactics if the end result was to deprive those workers of the very payments it had guaranteed.
“There is no justification for the company to pursue cost-cutting measures to the detriment of its staff. We will continue to fight alongside the trade union movement against employers that think they can get away with these kinds of cynical employment tactics.”
Tesco has been contacted for comment.