High Court Injunction prevents Tesco from “firing and re-hiring”
Firing and re-hiring again - Tescos
In a judgment published yesterday the High Court granted an injunction to the USDAW trade union acting on behalf of Tesco workers. This related to Tesco’s plans to dismiss workers at their distribution centres in order to re-hire them or recruit replacements on less expensive contracts. The contracts of the workers in question contained a retained pay element negotiated by USDAW in 2010 which Tesco had guaranteed at the time as being permanent. In the circumstances, the High Court agreed with the claimants that an implied term arose in the workers’ contracts preventing Tesco from terminating in order to remove the retained pay element that they had previously guaranteed.
Firing and re-hiring is a tactic that employers sometime use to change the terms and conditions of employees often as a means of reducing cost. Companies currently considering such a move will wonder if the High Court decision prevents them from now doing this. The answer is probably not. In reaching its decision the High Court made it clear that the Tesco case was fairly unique on its facts thus enabling it to take the unusual step of granting the injunction sought. But employers should proceed carefully when considering dismissals of staff who will not agree to changes to their terms and conditions. Employees with more than 2 years’ service may bring unfair dismissal claims which could be successful if the employer cannot show that it had a sound business reason for making the change to workers’ terms or if they fail to follow a fair procedure.
If you are affected by this issue or have any other employment queries then please speak to your usual contact in the Downs Solicitors Employment Team.