Usdaw brought the case to the High Court in 2021 on behalf of members employed by the supermarket giant in its Daventry and Litchfield distribution centres, securing a landmark victory when the Court ruled against Tesco’s proposal to remove “retained pay”, a contractual benefit described as “permanent” when it was afforded to the workers concerned.  

The judgment concluded that the attempt to remove the entitlement to Retained Pay by adopting a fire & re-hire strategy was in breach of contract and granted an injunction to prevent Tesco from proceeding with its proposals.  

The Judge held that considering the express term guaranteeing the benefit, there was an implied term in the workers’ contracts that the right to terminate employment could not be exercised if the aim was to remove a right to ‘retained pay.’ 

This decision marked a significant win for Usdaw and its members, reinforcing workers' rights against increasingly contested 'fire and rehire' practices within the industry. 

Tesco challenged the High Court decision in the Court of Appeal. 

The Court of Appeal found that Tesco retained the right to terminate the contract, with any entitlement to Retained Pay ending when the contract did.   

It contended that the High Court was wrong to find that both parties intended that the entitlement should be permanent and would not accept that it was the mutual intention of the parties to limit the circumstances in which Tesco could bring the contracts to an end.  

This decision, if it is allowed to stand, effectively allows Tesco to proceed with the dismissal of the workers concerned if they are served with appropriate notice and notwithstanding the commitments made to them previously. 

In December 2022, Usdaw secured leave to appeal from the Court of Appeal to the Supreme Court, the Highest Court in the UK. 

Neil Todd, a partner in the Trade Union Law Group at Thompsons Solicitors, the law firm representing the workers, said: “We are privileged to bring these proceedings on behalf of Usdaw and its members to the Supreme Court. 

“The individuals we represent were made a wholly unambiguous commitment within their contract of employment that they would have the right to 'retained pay' for as long as they continued in their respective roles.  

“We contend that “permanent' means just that, and it was not open to Tesco to renege from that commitment and utilise fire and re-hire tactics solely to remove that right once it had served its purpose.  

“It is imperative that such commitments, once made, are honoured, as they represent not only legal obligations but also the ethical standards of mutual trust and respect imperative in any employment relationship.  

Mark Todd – Usdaw National Officer added: “It has always been clear to us what we agreed with Tesco in respect of our members in receipt of ‘retained pay’. That is that they would have a right to this payment for as long as they remained employed by Tesco in their current role. The agreement was reached at a time when the company needed these individuals to remain in post as it could not have been operationally effective if they had chosen to leave. The workers agreed to remain in the business and relocate on the basis of the guarantee of these payments when they otherwise may have taken redundancy. 


“We were therefore 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. Tesco is a highly profitable business, and those profits are generated by the hard work and loyalty of our members. They deserve better than be subjected to ‘fire and rehire’ and extensive legal challenges.” 


Notes for editors: 

Usdaw (Union of Shop, Distributive and Allied Workers) is one of the fastest growing unions in the TUC and the UK's fifth biggest trade union with around 360,000 members. Most Usdaw members work in the retail sector, but the union also has many members in transport, distribution, food manufacturing, chemical industry and other trades 


For further information please contact Usdaw’s Media Officer, David Williams on: 0161 249 2469, 07798 696 603 or by e-mail to 

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