If your employer fired you and then offered your previous job back on lower pay, would you accept?

In Tesco Stores Ltd v USDAW, Tesco proposed firing staff at certain distribution centres and rehiring them on lower pay.

Three employees informed their union and brought claims against the supermarket.

What happened?

  • In 2007, Tesco wanted to close some distribution centres and offered staff increased ‘retained pay’ to relocate.
  • In 2021, Tesco attempted to stop the increased ‘retained pay’ by offering a lump sum to replace it or terminating contracts and re-hiring the employee on a lower salary.
  • Three employees informed their union and took legal action.
  • They argued that the ‘retained pay’ had been described as ‘permanent’ within their employment contracts.
  • The case then went to the Supreme Court who reversed the appeal! Tesco could not use their right to stop employees’ contracts to take away their enhanced pay.

So, the employees won!

Why does this matter now?

The new Employment Rights Bill proposes changes to the law governing Fire and Re-hire.

These changes propose removal of the narrow exception allowing contractual changes necessitated by ‘financial difficulties’.

Employers cannot unilaterally change contractual terms without mutual consent.

This protection for employees is predicted to be further strengthened by the new Employment Rights Bill.

So, it might be easier for employees to bring claims.

What can HR do to prepare for this?

  • Consider getting your contracts amended to reflect business needs.
  • Make sure company policies are up to date!
  • Don’t wait to implement contractual and policy changes to make sure you mitigate any potential claims!

Need help?

At PJH Law we specialise in Employment Law, feel free to call our office on 01780 757589 or visit our website today to get in touch!