E Point Perfect

Tesco wins legal battle over ‘fire and rehire’ tactic


// Tesco wins court battle over its ‘fire and rehire’ employment tactic
// Tesco is allowed to dismiss and re-employ workers on different contractual terms

Tesco has won a court battle over its ‘fire and rehire’ employment tactic, after it was overruled by the Court of Appeal.

The overruling means the supermarket giant is allowed to dismiss and re-employ workers on different contractual terms.

The initial clash meant Tesco was banned from using the controversial practice after it was found to dismiss a number of staff at its distribution centres before then seeking to re-employ them on less favourable contracts.

READ MORE: Amazon takes on Tesco with price match scheme

Tesco had previously been told by the courts that the approach was illegal; a ruling that was overturned in court last week.

The grocer had been using the tactic to phase out enhanced payment terms from the workers’ contracts.

The ‘fire and rehire’ tactics are used by employers who are looking to cut costs.

The case was originally brought forward by 42 Tesco workers at distribution centers who said the company was looking to fire and rehire them on a worse contract, without retained pay.

Meanwhile, the union Usdaw brought the claim on behalf its members and said workers had been told to give up their entitlement to retained pay.

In last week’s Court of Appeal judgment, Lord Justice Bean said there was nothing in the retained pay provisions that would “prevent the employer from giving notice to terminate the contract in the usual way”.

Tesco said it is “considering our next steps following today’s ruling, and will continue to work constructively with the small number of colleagues affected to agree a way forward”.

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