The Union of Shop, Distributive and Allied Workers v Tesco Stores Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Ellenbogen DBE |
| Judgment Date | 03 February 2022 |
| Neutral Citation | [2022] EWHC 201 (QB) |
| Docket Number | Case No: QB-2021-000988 |
| Court | Queen's Bench Division |
[2022] EWHC 201 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Ellenbogen DBE
Case No: QB-2021-000988
Mr Paul Gilroy QC and Mr Stuart Brittenden (instructed by Thompsons Solicitors LLP) for the Claimants
Mr Bruce Carr QC and Ms Talia Barsam (instructed by Herbert Smith Freehills LLP) for the Defendant
Hearing dates: Wednesday, 5 and Thursday, 6 May 2021
APPROVED JUDGMENT
Introduction
This judgment follows the trial of a CPR Part 8 claim against Tesco Stores Ltd, brought by four claimants, respectively: (1) The Union of Shop, Distributive and Allied Workers (“USDAW”); (2) Mr Christopher Webb; (3) Mr Jagpreet Singh; and (4) Mr Sandeep Kumar. The Second, Third and Fourth Claimants are employees of the Defendant and union representatives. Each claims on his own account and as representative of other employees who have the same interest, under CPR 19.6, to whom they refer as ‘Affected Members’, the definition of which term is set out in the re-amended claim form, recited below. The Claimants are represented by Messrs Paul Gilroy QC and Stuart Brittenden and the Defendant by Mr Bruce Carr QC and Ms Talia Barsam. I am grateful to all counsel for their assistance.
Albeit framed in a number of ways, the essential issue in this case is whether the Defendant is entitled to terminate each Affected Member's contract of employment and offer re-engagement on terms which do not include an entitlement to Retained Pay, against the background of its earlier assurances (variously expressed) that each such employee would have a permanent entitlement to Retained Pay, itself affecting the value of other benefits.
Following amendment and re-amendment of their claim form (the applications for which were not resisted and I granted, respectively, at the outset of trial and at the end of the Claimants' opening submissions), the Claimants seek final declaratory and injunctive relief in terms set out in their claim form, in which amendments are shown in the conventional way:
‘The Claimants seek relief in the form of an Order in the terms set out below. The Second, Third and Fourth Claimants claim under CPR 19.6 as representatives of all Affected Employees.
For the purposes of this Order, the following terms shall have the following meanings:
“Distribution Centres” means the Defendant's Lichfield, Daventry Clothing and Daventry Grocery Distribution Centres.
“Affected Member” means any member of the First Claimant employed by the Defendant at the Distribution Centres, who is in receipt of “Retained Pay”.
IT IS HEREBY DECLARED AND ORDERED AS FOLLOWS:
1. The contract of employment between each Affected Member (including each of the Second, Third and Fourth Claimant) and the Defendant is subject to an express term that the Affected Member is entitled to the payment of Retained Pay.
2. The contract of employment between each Affected Member (including each of the Second, Third and Fourth Claimant) and the Defendant is subject to an implied term that the Defendant will not exercise the right it would otherwise enjoy to give notice to terminate such contract so that new terms and conditions could be offered to the Affected Member, removing that entitlement for the purposes of removing the right to Retained Pay.
2A. Further or alternatively, by reason of the clear and unambiguous representations made by the Defendant to each Affected Member (including each of the Second, Third and Fourth Claimant) and which are particularised in a skeleton argument dated 6 April 2021, in relation to the Defendant's expressed intention to unilaterally remove such entitlement to Retained Pay through the mechanism of issuing notice of termination and re-engagement on new terms and conditions:
(i) the Defendant is estopped from seeking to unilaterally withdraw the entitlement to Retained Pay; and/or
(ii) such representations amount to a forbearance precluding it from exercising any right it otherwise possessed to unilaterally withdraw the entitlement to Retained Pay.
In respect of (i) and/or (ii) it is inequitable to permit the Defendant to act in a manner inconsistent with such representations.
3. The Defendant shall be restrained from:
(a) compulsorily withdrawing, from any Affected Member (including each of the Second, Third and Fourth Claimant), the contractual benefit of “Retained Pay”; and
(b) serving or purporting to serve notice of the termination of the contract of employment of any Affected Member (including each of the Second, Third and Fourth Claimant) in circumstances whereby the Defendant offers to re-engage any such person on terms and conditions which do not include the provision of Retained Pay.
…’
Pending judgment in these proceedings, the Defendant has undertaken not unilaterally to withdraw Retained Pay from, or serve or purport to serve notice of termination of employment on, any Affected Member as part of a dismissal and re-engagement process by which to achieve the same result. Across the three distribution centres, 43 employees (including the Second, Third and Fourth Claimants), whose names appear in the Appendix to this judgment, have been unwilling to agree to a variation to their contracts of employment, to remove their entitlement to Retained Pay. The effect of its removal would be dramatic. For the Second, Third and Fourth Claimants in this case, Retained Pay represents between approximately 32% and 39% of their wages.
Whilst the Defendant initially challenged the locus of the First Claimant union in these proceedings, in oral submissions it acknowledged that each of the individual claimants was properly a party, such that the issues raised would have required consideration irrespective of whether the union was also a claimant, and that no additional costs had been incurred by reason of its involvement. In such circumstances, as the Defendant acknowledges, it is unnecessary for the issue to be determined and I do not do so.
This being a CPR Part 8 claim, the evidence was contained in the witness statements and the documentation to which I was referred, and, subject to one, narrow, point, was not in dispute. The Claimants relied upon witness statements from each individual Claimant and from Mmes. Joanne McGuinness and Pauline Foulkes, each a National Officer of the First Claimant. The Defendant did not serve any witness statement. I granted leave to the Defendant to cross-examine each of the three individual Claimants on the narrow point of dispute, in line with the parties' earlier agreement. In the event, it has not been necessary for me to resolve the issue to which it related.
The material facts
The First Claimant is recognised by the Defendant, for collective bargaining purposes, within the meaning of section 178 of the Trade Union & Labour Relations (Consolidation) Act 1992. By a Recognition and Procedural Agreement dated 2009, but signed on 18 February 2010, the Defendant recognised the First Claimant as the sole representative and negotiating trade union for staff below the grade of Team Manager employed at so-called ‘new contract sites’, including those at Lichfield, Daventry and Livingston, Scotland.
Between 2007 and 2009, arrangements for Retained Pay were the subject of collective bargaining negotiations between the First Claimant and the Defendant, against the background of an expansion programme by the Defendant which had resulted in the closure of certain existing distribution centres; the expansion or restructuring of certain others; and the opening of new sites. In order to ensure that its distribution centre network could continue to operate effectively, at this time of significant change, the Defendant was of the view that it needed to make sure that it would not lose all of its existing employees through redundancy. An entitlement to Retained Pay was negotiated, as an alternative to a lump sum redundancy payment (which would otherwise have been payable, as staff could not have been compelled to relocate to a new distribution centre) and as an incentive to staff to relocate. The proposed terms as to Retained Pay were put to a ballot of members and were accepted. In summary, the contractual reward package, as it then existed, was given a monetary value and the difference between that value and the value of the new terms and conditions was protected. The arrangements as to Retained Pay have subsisted since, at the latest, 2009. Each of the Second to Fourth Claimants relocated from Crick, in Northampton, to one of the three distribution centres in England mentioned above; a distance of approximately 45 miles.
The Defendant provided its employees with a ‘Compensation Package Summary’, setting out, in tabular form, entitlements were staff to move to Lichfield or ‘ any other Tesco site with the new Tesco contract’ and the sums which would be paid were they to opt for redundancy. For those who chose to remain in employment, it was said, there would be ‘ new terms and conditions supported by individual retained pay – protection for life at new Tesco contract site…Please refer to previous joint statements for details’.
Staff were further provided with a ‘Q&A’ document, published by the Defendant on 20 February 2007, including the following questions and answers, numbered 32 and 33:
‘32. Will I receive any protection to support me moving to the new site with new terms and conditions?
Yes, we will support you in this instance by applying our ‘Retained Pay’ policy.
33. What does ‘Retained Pay’ mean?
If you transfer to a newly opened site in Tesco Distribution you will be on a new contract of employment. However, any difference in...
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