header-logo header-logo

22 July 2022
Issue: 7988 / Categories: Legal News , Employment
printer mail-detail

Fire & rehire allowed

Tesco has won an appeal against an earlier ruling preventing the supermarket chain from using ‘fire and rehire’ tactics

In Union of Shop, Distributive and Allied Workers & Ors v Tesco Stores [2022] EWCA Civ 978, the Court of Appeal overturned a High Court injunction against Tesco dismissing and re-hiring employees in order to remove a contractual entitlement to enhanced payment terms, known as ‘retained pay’. The retained pay clause dated back to 2007 when Tesco offered warehouse staff an incentive to move location during a restructuring of its distribution network―if they had declined the offer, they would have been eligible for redundancy payments of £6,000-£8,000.

The retained pay was stated as being permanent. One of the claimants, Jagpreet Singh received £134.70 per week retained pay. His contract stated: ‘This payment is part of your contractual terms… Retained pay will be uplifted by any future negotiated pay increases. Retained pay can only be altered in agreement with yourself and ceases where you agree to a promotion or where you request a fundamental shift change... In the event of a company-initiated change there would be no reductions in retained pay.’

In 2021, however, Tesco offered employees an advance payment of 18 months of retained pay in return for their agreement to remove the clause from their contract. If the employee did not agree, Tesco would terminate the original contract and offer to rehire the employee on different terms.

The High Court granted an injunction against Tesco terminating the original contracts. However, Lords Justice Bean, Newey and Lewis held there was no ‘mutual intention’ that contracts would continue for life, until normal retirement age, or until site closure; and no ‘mutual intention to limit the circumstances in which Tesco could bring the contracts to an end’. As a result, the contract could be terminated in the usual way.

Sarah Hooton, a partner in the employment team at Browne Jacobson, said: ‘While the issue of “fire and rehire” is not going away any time soon―a new statutory Code of Practice has been proposed to “clamp down on controversial tactics”―this decision will still be welcomed by employers as reducing the risk of future threats of injunctions.’

Issue: 7988 / Categories: Legal News , Employment
printer mail-details

MOVERS & SHAKERS

Cripps—Radius Law

Cripps—Radius Law

Commercial and technology practice boosted by team hire

Switalskis—Grimsby

Switalskis—Grimsby

Firm expands with new Grimsby office to serve North East Lincolnshire

Slater Heelis—Will Newman & Lucy Spilsbury

Slater Heelis—Will Newman & Lucy Spilsbury

Property team boosted by two solicitor appointments

NEWS
A High Court ruling involving the Longleat estate has exposed the fault line between modern family building and historic trust drafting. Writing in NLJ this week, Charlotte Coyle, director and family law expert at Freeths, examines Cator v Thynn [2026] EWHC 209 (Ch), where trustees sought approval to modernise trusts that retain pre-1970 definitions of ‘child’, ‘grandchild’ and ‘issue’
Fresh proposals to criminalise ‘nudification’ apps, prioritise cyberflashing and non-consensual intimate images, and even ban under-16s from social media have reignited debate over whether the Online Safety Act 2023 (OSA 2023) is fit for purpose. Writing in NLJ this week, Alexander Brown, head of technology, media and telecommunications, and Alexandra Webster, managing associate, Simmons & Simmons, caution against reactive law-making that could undermine the Act’s ‘risk-based and outcomes-focused’ design
Recent allegations surrounding Peter Mandelson and Andrew Mountbatten-Windsor have reignited scrutiny of the ancient common law offence of misconduct in public office. Writing in NLJ this week, Simon Parsons, teaching fellow at Bath Spa University, asks whether their conduct could clear a notoriously high legal hurdle
A landmark ruling has reshaped child clinical negligence claims. Writing in NLJ this week, Jodi Newton, head of birth and paediatric negligence at Osbornes Law, explains how the Supreme Court in CCC v Sheffield Teaching Hospitals NHS Foundation Trust [2026] UKSC 5 has overturned Croke v Wiseman, ending the long-standing bar on children recovering ‘lost years’ earnings
A Court of Appeal ruling has drawn a firm line under party autonomy in arbitration. Writing in NLJ this week, Masood Ahmed, associate professor at the University of Leicester, analyses Gluck v Endzweig [2026] EWCA Civ 145, where a clause allowing arbitrators to amend an award ‘at any time’ was held incompatible with the Arbitration Act 1996
back-to-top-scroll