Latest in Employment Law>Case Law>USDAW v Tesco Plc [2022]
USDAW v Tesco Plc [2022]
Published on: 19/07/2022
Article Authors The main content of this article was provided by the following authors.
Jason Elliott BL Lecturer in Law and Barrister
Jason Elliott BL Lecturer in Law and Barrister

Jason Elliott was called to the Bar of Northern Ireland in 2013 and is the Associate Head of School of Law at Ulster University.  As a practising barrister, he has developed a largely civil practice representing individuals, companies and public bodies in litigation. This covers a wide range of areas including personal injuries, wills and employment law. In terms of employment law, he has represented both applicants and respondents in the Industrial Tribunal.   At Ulster University, Jason lectures extensively on the civil areas of practise such as Equity and Trusts and delivers employment law lectures for both undergraduate and postgraduate students.

Background

The claimant, a trade union, is recognised by the defendant for the purposes of collective bargainingAn agreement was reached for retained pay (instead of a lump sum) and the defendant made it clear that the entitlement to retained pay would remain for as long as the employee was employed in their roleIn 2010 it was noted as a ‘permanent feature’ of the contractual entitlement which could only be changed through mutual consent, on promotion or a change to work patterns. 

In January 2021, the defendant stated it was removing retained pay with a lump sum being paid for the entitlement to be removedIf the employees failed to accept that then they would be dismissed and offered new termsThe claimant sought a declaration that the contracts were subject to an implied term stopping the defendant from terminating the contract for the purpose of removing retained payAt first instance, the High Court granted the reliefThe reason for this was that ‘permanent’ as noted in 2010 was such that retained pay would exist as long as the employee was employed in the same substantive roleThis did not negate the defendant’s right to terminate the contract where there was just cause, such as misconduct or redundancy.  

The defendant appealed to the Court of AppealThe appeal was allowedOn the interpretation of ‘permanent’ the Court of Appeal stated the High Court had erredThere was no evidence that the issue of fire and rehire had been examined in the context of ‘permanent’ as discussed in 2010Despite the lack of time limit in the contract regarding retained pay, the lack of clarity did not mean that it would exist for lifeAs a result, the express terms (rather than the implied term used by the High Court) would have to be appliedThis meant that the defendant could give notice under the contract and that the retained pay would only exist for as long as the contract existed.    

The Court of Appeal also stated the disposal of the case from the High Court was inappropriateIt was the first situation in which a final injunction had been granted to prevent a private employer from dismissing an employee indefinitelyThe injunction itself also suffered from a lack of clarity as the defendant did not know what it could or could not do.  

Practical Lessons

This case has implications for the restriction of fire and rehireIn this case, Tesco were clearly using it as a method of removing the retained pay aspect that had been negotiated some ten years earlierThe Court of Appeal has stated that it was wrong to intervene in this case and that injunctions should not be used to restrict the contractual rights of private employers. It is suggested that this is a sensible position as the point does come in which the contractual rights agreed to by both parties should be those enforced rather than the creation of new implied rights in an uncertain area with uncertain outcomes. 
https://www.bailii.org/ew/cases/EWCA/Civ/2022/978.html 

And to look at the High Court decision case review see here: https://www.legal-island.com/articles/uk/case-law/2022/february/usdaw-v-tesco-stores-ltd-2022/ 

 

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Disclaimer The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct at 19/07/2022