LONDON Tesco was not entitled to terminate some employees' contracts and offer to rehire them on less favourable terms, the United Kingdom's Supreme Court ruled on Thursday.

Shopworkers' union Usdaw took legal action against Britain's biggest retailer after Tesco sought to remove some warehouse workers' entitlement to increased pay by ending their contracts and offering to re-engage them - a practice often referred to as 'fire and rehire'.

The Supreme Court ruled that Tesco was not permitted to use 'fire and rehire' in these circumstances and restored an injunction preventing the retailer from doing so.

Usdaw had won an injunction in 2022 which prevented Tesco from dismissing the warehouse workers and offering them new contracts, but Tesco subsequently overturned that ruling on appeal.

The Supreme Court reversed that decision, however, ruling that Tesco's right to terminate employees' contracts could not be used to deprive them of their right to enhanced pay.

Tesco is Britain's largest supermarket group with a grocery market share of nearly 28%. It is also the UK's biggest private sector employer with about 270,000 workers.

  - Reuters