Usdaw members employed by Tesco in its Daventry and Litchfield Distribution Centres won a landmark legal victory against Tesco, after the company proposed to remove “retained pay” dismissing staff and offering to re-engage them on inferior terms and conditions. Tesco chose to pursue the case further to the Court of Appeal, where the original judgement was overturned.
The High Court had originally found that, as the parties had agreed this payment was “permanent” and “guaranteed for life”, the employer was not entitled to serve notice on the contract when its sole purpose for doing so was to remove the term in question.
However, in a deeply disappointing decision, the Court of Appeal was unable to accept that the phrases “permanent” and “guaranteed for life” showed a mutual intention on behalf of both parties that the right to “retained pay” would continue as long as the employee in question performed the role in which they were currently employed to undertake. This was despite the very clear wording in joint statements issued by Tesco and Usdaw at the time.
In the Court’s view there was a lack of clarity as to what both parties meant by “permanent”. In light of this finding the Court also concluded it could not imply a term into the contract to prevent the employer serving notice, even in circumstances where it was doing so solely in order to remove the right to “retained pay”.
Following on from this, the Court decided to remove the injunction currently in place preventing Tesco from dismissing these workers. However, Usdaw, on behalf of the members concerned, remained determined to fight on against these shameful “fire and rehire” tactics and secured leave to appeal to the Supreme Court.
Neil Todd, a partner in the Trade Union Law Group at Thompsons Solicitors, the law firm representing the workers, said: “We are privileged to bring these proceedings on behalf of Usdaw and its members to the Supreme Court.
“The individuals we represent were made a wholly unambiguous commitment within their contract of employment that they would have the right to 'retained pay' for as long as they continued in their respective roles.
“We contend that ‘permanent’ means just that, and it was not open to Tesco to renege from that commitment and utilise fire and re-hire tactics solely to remove that right once it had served its purpose.
“It is imperative that such commitments, once made, are honoured, as they represent not only legal obligations but also the ethical standards of mutual trust and respect imperative in any employment relationship.
Mark Todd – Usdaw National Officer added: “It has always been clear to us what
we agreed with Tesco in respect of our members in receipt of ‘retained pay’. That is that they would have a right to this payment for as long as they remained employed by Tesco in their current role. The agreement was reached at a time when the company needed these individuals to remain in post as it could not have been operationally effective if they had chosen to leave. The workers agreed to remain in the business and relocate on the basis of the guarantee of these payments when they otherwise may have taken redundancy.
“We were therefore shocked when Tesco adopted ‘fire and rehire’ tactics to try and strip this right away and then chose to pursue a small number of employees through every court in the land to deny them wages. Tesco is a highly profitable business and those profits are generated by the hard work and loyalty of our members. They deserve better than be subjected to ‘fire and rehire’ and extensive legal challenges.”
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
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