Injunction issued for dismissing and rehiring employees

A recent Court of Session ruling has significant implications for businesses which routinely hire and rehire employees to save money. The Court of Session has issued a temporary injunction prohibiting Tesco from terminating contracts in order to withdraw entitlement to a benefit of “retained pay”.  The ruling has also prevented the company from unilaterally terminating workers’ contracts with less than 2 years’ service in order to re-engage the same staff, at its Livingston distribution centre.

Usdaw, the union representing the workers involved, alleged the supermarket was forcing some of the staff at the Livingston distribution centre to sign up to a new contract that would result in them losing between £4,000 and £19,000 per year.

According to research by the TUC, one in 10 workers have been told to reapply for their jobs on worse terms since the first lockdown in March 2020. The use of dismissal and rehiring staff with less than 2 years’ service has often been used as a legitimate way for businesses to change terms of employment or to revise terms that are commercially unsustainable.

Whilst there are times when this action may be used as part of a genuine attempt to preserve jobs during these challenging times, the technique is not without risk for employers.

Tesco have pledged to challenge the ruling, stating that “we made a fair offer to those colleagues affected, and many of our colleagues have chosen to accept this.”

Usdaw is also representing workers in cases at other Tesco distribution centres, including Litchfield, Daventry clothing and Avonmouth.

 

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