The judgment relates to 42 Usdaw members employed by Tesco in its Daventry and Litchfield Distribution Centres. Usdaw, represented by social justice law firm, Thompsons Solicitors, won a landmark legal victory in February against the supermarket giant over its decision to dismiss a number of its staff and seek to re-engage them on inferior terms and conditions.
The workers were informed that if they did not give up their entitlement to a considerable proportion of their wages, known as ‘retained pay’, they would be dismissed and then re-engaged on the less favourable terms in any event as part of a deliberate cost-saving strategy by the supermarket.
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 benefit in question. However in a deeply disappointing decision from the Court of Appeal it determined that it 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, remains determined to fight on against these shameful “fire and rehire” tactics and has made clear it will now seek leave to appeal from the Supreme Court.
Neil Todd, a trade union specialist at Thompsons Solicitors, said: