Tesco’s ‘Fire and Rehire’ Policy Gets UK Top Court Scrutiny

Tiffany Tsoi and Katharine Gemmell
·2 min read

(Bloomberg) -- A group of Tesco employees took the grocer to the UK’s highest court over the use of the controversial “fire and rehire” tactic that helps employers to cut costs.

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The distribution center workers allege they were either fired or forced to move 40 miles to a new place of work in 2009. Employees who agreed to relocate were offered a lump sum as an incentive to stay on working for the supermarket. In 2021 however, Tesco announced that it intended to fire those employees and offered to re-hire them on a worse contract with lower pay.

Tesco treated its employees as if they were a “servant” and it was the “master” with an “unrestricted freedom to terminate the relationship at will,” Oliver Segal, a lawyer representing the workers, said in documents prepared for the Supreme Court hearing on Tuesday.

The controversial “fire and rehire” practice has come under scrutiny in the UK in recent years after P&O Ferries sought to fire hundreds of its crew and replace them with cheaper labor. The UK government has tried to clamp down on it with new rules to ensure employers don’t take advantage of workers.

British Airways Plc also sought to take advantage of the practice during the Covid-19 pandemic but cargo workers secured a deal with the airline to scrap the policy after they took industrial action.

The two day hearing comes after Tesco won their appeal against the workers at a lower court, successfully overturning a previous decision that blocked the grocer from firing them.

Lawyers for Tesco asked the court to throw out the latest appeal bid. “In agreeing the retained pay term, the parties were not restricting Tesco’s existing rights to terminate the affected employees’ employment contract on notice,” the lawyers said in documents prepared for the hearing.

“We were shocked when Tesco adopted ‘fire and rehire’ tactics to try and strip this right away and then chose to pursue a small number of employees through every court in the land to deny them wages,” said Mark Todd, an officer at the Union of Shop, Distributive and Allied Workers, which represented the employees.

“We made a fair offer to colleagues at that time, and many of them chose to accept this,” a Tesco spokesperson said. “Our first priority is to engage constructively with USDAW and the small number of colleagues affected.”

Read More: Tesco Wins Court Appeal Over ‘Fire and Rehire’ Worker Spat

(Updates with a comment from the union in the penultimate paragraph)

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