Tesco had agreed retained pay with some employees as part of a relocation arrangement. The entitlement was described as permanent. Years later, Tesco sought to terminate contracts and offer re-engagement without retained pay.
Selected cases
UK Supreme Court · [2024] UKSC 28
Tesco Stores Ltd v USDAW
The UK Supreme Court considered whether Tesco could terminate and rehire staff to remove a permanent retained-pay entitlement.
UK Supreme Court12 Sept 2024
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Quick read
- Employers should be careful with promises described as permanent, guaranteed or protected.
- The UK Supreme Court considered whether Tesco could terminate and rehire staff to remove a permanent retained-pay entitlement.
Use this to check
- Avoid casual use of permanent language in employment promises
- Document the commercial basis for pay protection arrangements
- Get advice before using fire-and-rehire tactics
Decision snapshot
What happened
- Tesco had agreed retained pay with some employees as part of a relocation arrangement.
- The entitlement was described as permanent.
- Years later, Tesco sought to terminate contracts and offer re-engagement without retained pay.
What the court had to decide
- The issue was whether an implied term prevented Tesco from terminating employment contracts for the purpose of removing the retained-pay entitlement.
What the court decided
- The Supreme Court restored an injunction preventing Tesco from using termination in that way.
- The wording and circumstances made the entitlement permanent in a meaningful contractual sense.
Practical impact
Practical read
- Employers should be careful with promises described as permanent, guaranteed or protected.
- Cost pressure later may not justify undoing a carefully negotiated entitlement by termination and rehire.
Useful next steps
- Avoid casual use of permanent language in employment promises
- Document the commercial basis for pay protection arrangements
- Get advice before using fire-and-rehire tactics
How businesses should read it
Employers should be careful with promises described as permanent, guaranteed or protected. Cost pressure later may not justify undoing a carefully negotiated entitlement by termination and rehire.
Key takeaways
- Avoid casual use of permanent language in employment promises
- Document the commercial basis for pay protection arrangements
- Get advice before using fire-and-rehire tactics