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.
How does anyone have faith in capitalism when stuff like this happens?
Either:
- They’re in denial that this happens (arguably, it didn’t happen, as eventually Tesco lost, and they wouldn’t know about it in the three years Tesco was winning because The Telegraph/Mail etc. wouldn’t report on that).
- They think worse things would always happen under other systems (e.g. everyone would be a slave of the state and go to gulag if they complained about anything).
- They don’t see it as an inherent problem with capitalism (e.g. simply make doing this illegal, and refuse to let business lobby to reverse the decision, and everything’s fine).
- They think this is a good thing (e.g. the fired workers will be incentivised to work harder, then earn a payrise, and use the extra 10p an hour to start a competing multibillion pound supermarket chain).
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.
Or they don’t believe this is what a capitalist system is. That one really gets me because I don’t know where to start on defining capitalism.
Seriously, this isn’t even something I would stoop to to min/max my earnings in Roller Coaster Tycoon 2. Executives who come up with shit like this should never be legally allowed in a C-suite position again.
You know exactly what I mean. Why are you asking for clarification when it’s spelled out in the article what they wanted to do?
Tons of companies have fired half their employees and then re-hired them as contractors with lower salaries/wages.
And yet, you are complaining about the system that stopped it from happening.
And yeah, of course I understood what you meant. You also understood what I meant. Maybe you should look at “corruption” instead, you’ll get much better results there.
