Tesco Stores Ltd v Union of Shop, Distributive and Allied Workers and others

Tesco Stores Ltd v Union of Shop, Distributive and Allied Workers and others

A term is implied in the claimants' contracts of employment that Tesco's right to terminate on notice cannot be exercised for the purpose of removing or diminishing the right to receive retained pay. This implication is necessary to give effect to the promise that retained pay would be a permanent contractual entitlement, and damages would be inadequate, justifying the grant of an injunction amounting to indirect specific performance.

Parties
Respondent: Tesco Stores Ltd; Appellants: Union of Shop, Distributive and Allied Workers and others
Jurisdiction
England and Wales
Judgment Date
12 September 2024
Procedural Posture
Appeal / Supreme Court Judgment
Outcome
Appeal allowed
Legal Topics
Collective Agreements, Contractual Interpretation, Implied Terms, Termination of Employment, Specific Performance, Injunctions
Employment Law Contract Law Collective Agreements Contractual Interpretation Implied Terms Termination of Employment Specific Performance Injunctions

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 24 Party arguments 2 Amounts and remedies 10
Sign in to unlock

Parties

Tesco Stores Ltd

Respondent

Union of Shop, Distributive and Allied Workers and others

Appellants

Procedural Posture

Appeal / Supreme Court Judgment

Legal Issues

  1. 1 Whether the retained pay term in the collective agreement prevents Tesco from terminating employment contracts to remove retained pay
  2. 2 Whether a term should be implied to restrict Tesco's right to dismiss for the purpose of removing retained pay
  3. 3 Whether an injunction amounting to indirect specific performance is appropriate

Ratio Decidendi

A term is implied in the claimants' contracts of employment that Tesco's right to terminate on notice cannot be exercised for the purpose of removing or diminishing the right to receive retained pay. This implication is necessary to give effect to the promise that retained pay would be a permanent contractual entitlement, and damages would be inadequate, justifying the grant of an injunction amounting to indirect specific performance.

Court Disposition

Appeal allowed

Orders

  • Injunction reinstated restraining Tesco from terminating contracts for the purpose of removing or diminishing retained pay
  • Declaration of employees' contractual right to retained pay