Tesco has lost a high-profile “fire and rehire” case in the UK’s supreme court over proposals by the supermarket to let some staff go and re-employ them on lower pay.
The dispute with the shopworkers’ union Usdawbegan in 2021 and centred on moves to use firings or the threat of dismissal to remove retention payments awarded years earlier to some workers at distribution centres.
The UK’s highest court ruled that Tesco Stores Ltd could not terminate the employment contracts of staff to stop them receiving the retention payments and then rehire them on new contracts without the top-up.
The case has been closely watched because it raises wider questions about the practice of “fire and rehire” and an employer’s right to terminate a contract by giving notice to the employee and then re-employing them on less generous terms.
They also argue that the business would go bust or move out of the country, both resulting in far wider job losses. I don’t doubt that a small minority of businesses might fit into this but a business the size of Tesco that made a couple of billion of profit last year and is heavily dependent on physical sales in the UK to achieve that.
Same argument is used against the likes of Amazon or Apple paying fair taxes or wages, they do about 30 billion and 1.5 billion of sales of mostly physical goods here respectively, that they would have to give up on, which is just not going to happen. Apple has about half the UK mobile market, like they would give that up.
This is what I always say when arguing about this at work, that if a company is making X billion in profit and we decide to tax them heavier so they only make half of X billion in profit they’re not going to leave as that’s still at lot of profit.
Sure there is an argument that it could set a precedent in other countries to tax harder but still some profit is better than no profit and if not then you don’t have a viable business anymore and someone else will capitalise.