Employment Edit: 19 September 2024

Termination of permanent benefits

The Supreme Court has reinstated an injunction preventing an employer from using termination and re-engagement (often referred to as ‘fire and rehire’) to remove employees’ contractual entitlements to benefits described as ‘permanent’.

Following a restructure in 2007, Tesco entered into a collective agreement with its recognised trade union (USDAW) under which it agreed to pay ‘retained pay’ to employees who agreed to relocate. The retained pay, which was incorporated into employees’ contracts of employment, was described in relevant documents as a ‘permanent feature’ and could only be removed or amended in certain limited circumstances. In 2021, Tesco sought to end the entitlement to retained pay by offering affected employees a lump sum payment if they agreed to the removal of the benefit. Employees were informed that, if they did not agree, they would be dismissed and re-engaged on the same terms minus the retained pay. USDAW and several employees applied to the High Court for an injunction preventing this.

Granting the injunction, the High Court implied a term into the affected employees’ contracts preventing the employer from taking this step. The injunction was overturned by the Court of Appeal and the case progressed to the Supreme Court. Last week, the Supreme Court issued its judgment restoring the injunction and finding that a term should be implied into employees’ contracts stipulating that the employer’s right to dismiss could not be exercised for the purpose of depriving the employees of their right to permanent retained pay. It noted that retained pay was an incentive for employees to agree to relocate and it was inconceivable that the parties intended that the employer would have the unilateral right to dismiss employees for the purpose of bringing retained pay to an end.

Although the case is of most relevance where benefits have been stated to be ‘permanent’ (which is relatively uncommon), the Court’s analysis could also be relevant in other circumstances too. For example, it is interesting to note that the Court took into account pre-contractual material (including statements made to affected staff by Tesco and USDAW prior to the collective agreement) when interpreting the meaning of the contractual terms.

Employers will also need to keep in mind any future changes the Labour government might make to the practice of ‘fire and rehire’. The government has committed to ‘ending the scourge’ of ‘fire and rehire’, limiting the practice to specific circumstances where there is genuinely no alternative. Further details are expected in the Employment Rights bill which is due to be published in October.

(Tesco Stores Limited v USDAW & others)

Supporting disabled workers with hybrid working

The Equality and Human Rights Commission (EHRC) has issued new guidance for employers on supporting disabled workers with hybrid working. The new guidance, which is designed for small and medium sized organisations, aims to help employers understand their legal obligations including the duty to make reasonable adjustments. It also details some practical steps that employers can take to best support disabled workers with hybrid working.

The guidance includes tips on how to identify barriers to effective hybrid working and some conversation prompts to support managers with conversations around workers’ individual needs.

Scope of protected philosophical beliefs

The EAT has held that a claimant’s belief in English nationalism was not a protected philosophical belief under the Equality Act 2010.

After the claimant’s agency assignment with an NHS Trust was terminated, he brought a tribunal claim alleging that the real reason for the termination was his belief in English nationalism, which included anti-Islamic views. The tribunal held that the claimant’s belief did not meet one of the Equality Act requirements for a belief to be protected, namely it ‘must be worthy of respect in a democratic society, must not be incompatible with human dignity and not conflict with the fundamental rights of others’. The claimant appealed.

Rejecting the claimant’s appeal, the EAT noted the tribunal’s findings that the claimant’s belief amounted to ‘a generalised form of harassment targeting one particular religion’ and that there was a ‘disdainful and prejudiced focus on Islam’, The EAT noted how these findings demonstrated that his belief was more than offensive, shocking or disturbing. As his belief was not protected, the claimant was not eligible to bring a claim for discrimination on the grounds of philosophical belief.

Cases such as this are very fact-specific as they depend on the particular beliefs of the individual, but this case is a useful example of where a tribunal might draw a distinction between a belief that is protected and one that goes beyond the scope of protection.

(Thomas v Surrey and Borders Partnership)