In response to plans in 2021 to terminate employees at some distribution centers and rehire them at lower pay, the Union of Shop Distributive and Allied Workers (Usdaw) and three of its Tesco members, who also represent the union, filed a lawsuit.
The case began in 2007 and initially involved about 360 workers, most of whom were employed at Livingston in West Lothian. The dispute started when the supermarket chain promised employees additional “retained pay” in exchange for moving.
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The biggest retailer in the UK declared in 2021 that it will stop offering retained pay and that people who were impacted would.
The corporation threatened to terminate their contracts and reoffer them on the same terms—minus the additional salary—if the offer was rejected.
Tesco claimed that managers were employing a legal “contractual mechanism” available to employers, whereas Usdaw contended that “retained” compensation was specified as “permanent” in the staff members’ contracts, indicating it could not be eliminated.
The ruling by the Supreme Court came after both sides had won in lower courts, most recently at the Court of Appeal with Tesco.
The five justices of the Supreme Court decided in unanimity that Tesco should not be allowed to fire the employees.
