Supreme Court Tesco ruling overview:
- Who: The U.K. Supreme Court ruled against Tesco in a dispute with warehouse workers over the removal of a “permanent” pay supplement.
- Why: A panel of five justices ruled Tesco’s decision to fire and rehire the workers while removing the retained pay part of their contract violated their employment contracts.
- Where: The ruling was made in the Supreme Court of the United Kingdom.
The United Kingdom Supreme Court reportedly ruled Tesco violated its warehouse workers’ employment contracts when it chose to fire and rehire them in order to remove a so-called “permanent” pay supplement.
The decision reportedly overturned a 2022 finding from the Court of Appeal that it was not clear what the word “permanent” definitively meant in the employment contracts.
The court’s unanimous decision last week means Tesco will not be able to escape providing the “retained pay” to 42 warehouse workers who were relocated by the company to new distribution centers, reports Law360.
Tesco, the court ruled, rather must abide by a promise it reportedly made to provide the retained pay for the remainder of the workers’ employment with the retailer.
“It is inconceivable that the objective mutual intention of the parties was that Tesco should retain a unilateral right immediately to dismiss these employees for the purpose of removing the right to retained pay,” Justices Andrew Burrows and Ingrid Simler wrote, according to Law360.
Tesco argued rehiring staff with less favorable contracts needed to avoid possible equal pay claims
The court rejected Tesco’s argument that the workers’ right to receive the retained pay was tied to their particular contracts and that it should be able to rehire staff to less favorable contracts in order to avoid the possibility of millions of pounds worth of equal pay claims.
An injunction preventing Tesco from rehiring staff members with contracts that do not include retained pay has also now been restored, reports Law360.
The decision was reportedly celebrated by the Union of Shop, Distributive and Allied Workers, which represented the workers.
Tesco previously issued a recall in April 2022 for some of its popular Chicken and Vegetable cup soup with croutons products over concerns of possible metal fragment contamination.
Have you ever been fired and rehired with a less favorable employment contract? Let us know in the comments.
The plaintiffs are represented by Oliver Segal KC and Stuart Brittenden KC of Old Square Chambers, instructed by Thompsons Solicitors LLP.
The Supreme Court Tesco ruling is In re: The Union of Shop, Distributive and Allied Workers, et al., v. Tesco Stores Ltd., Case No. 2022/0133, in the Supreme Court of the United Kingdom.
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