The UK Supreme Court has sided with retail distribution trade union Usdaw in its legal battle against supermarket chain Tesco in a "fire and rehire" dispute. 

The court's decision prevents Tesco from using the strategy to alter workers' contracts. 

The dispute arose over Tesco's attempt in 2021 to remove an entitlement to enhanced pay for warehouse workers, which had been in place since 2007. 

Tesco proposed to offer workers a lump sum payment to agree to the change.  

If they did not agree, their contracts would be terminated, and they would be rehired on new terms without the enhanced pay.  

Usdaw took legal action to protect the workers' rights, initially securing an injunction to prevent Tesco from dismissing workers then rehiring them on less favourable terms. 

However, Tesco successfully appealed the injunction in 2022, leading to the Supreme Court's involvement.  

The highest court in the land has now restored the injunction, ruling that Tesco cannot proceed with the "fire and rehire" approach.

Usdaw general secretary Paddy Lillis said: “Usdaw has been determined to stand by its members in receipt of this valuable benefit that constituted a key component of their pay. We recognised that they had been afforded this payment because of their willingness to serve the business and it was on that basis that we agreed with Tesco that it should be a permanent right. 

“When we said permanent, we meant just that. We were therefore appalled when Tesco threatened these individuals with fire and rehire to remove this benefit. These sorts of tactics have no place in industrial relations, so we felt we had to act to protect those concerned." 

In response to the ruling, Tesco acknowledged the decision and clarified that it affected only "a very small number of colleagues in our UK distribution network who receive a supplement to their pay."  

A spokesperson of Tesco was quoted by Reuters: "Our objective in this has always been to ensure fairness across all our distribution centre colleagues."