Local Government Lawyer Home Page

Sharpe Edge Webpage Banner

Welcome to Sharpe Edge, Sharpe Pritchard’s local government legal hub on Local Government Lawyer.

Sharpe Edge features news, views and analysis from our team of specialist local government lawyers working at the heart of the latest legal developments. Sharpe Edge platform is also the only place where local government lawyers can get e-access to two law books by our Head of Local Government Rob Hann: The Guide to Local Authority Charging and Trading Powers (‘LACAT’) and The Guide to Local Authority Companies and Partnerships (‘LACAP’).



Slide background

Will employers still be able to use the practice of ‘fire and rehire’ in 2022?

Icons HazardChristian Grierson and Julie Bann discuss a recent case in which the High Court has granted an injunction preventing Tesco from using the controversial employment practice of ‘fire and rehire’.

USDAW & others v Tesco Stores Limited QB-2021-000988

In a recent case the High Court has granted an injunction preventing Tesco from using the controversial employment practice of ‘fire and rehire’.

The tactic of firing staff and then rehiring them, typically with the purpose of enforcing the removal of benefits, has attracted increased negative media attention and this case represents a dramatic development in the law. We look at the case and whether the practice remains viable for employers in 2022.

Fire and Rehire

The issue is a common one, where an employer wants to make a change to staff terms and conditions, but the staff refuse to accept the change.

There are steps employers can take to encourage staff to accept the change such as offering an incentive, clear communication and timing the change to coincide with a beneficial change. Ultimately, if the staff continue to refuse the change, then employers are forced to consider terminating the existing staff contracts on notice and offering continued employment on the new terms.

The controversial tactic has been much discussed during the pandemic, where its use attracted renewed criticism. This led to ACAS in November 2021 publishing updated advice on changing employment contracts. The new advice explicitly stated: “fire and rehire is an extreme step that can seriously damage working relations and has significant legal risks for organisations”.

In the public sector, where it is common for staff to be supported by strong unions there has been forceful demands for the practice to be banned, with Labour and the TUC in 2021 calling on the tactic to be banned.

A Radical Case

In 2007-2009 Tesco agreed to pay staff ’Retained Pay’ during a reorganisation and relocation of its staff working in distribution centres to avoid losing all of its staff. The Retained Pay was a permanent change to the terms and conditions of Tesco staff impacted by the reorganisation.

Then in January 2021 Tesco sought to sought to remove Retained Pay and offered staff the choice been a lump sum of 18 months’ Retained Pay or being fired and rehired on the new terms. In response, USDAW applied to the High Court for the following:

  1. Declaration: A declaration that affected employees’ contracts were subject to an implied term preventing Tesco from exercising the right to terminate for the purpose of removing the right to Retained Pay.
  2. Injunction: An injunction preventing Tesco from terminating the contracts.

The High Court found in favour of USDAW and granted relief on both points. There was an implied term that the staff could not be fired and then rehired to remove the Retained Pay, as the Retained Pay had been promised in language that clearly expressed its permanency. The injunction was granted as damages would not be an adequate remedy and so Tesco was prevented from commencing the fire and rehire.

Tesco tried to argue the ‘Johnson Exclusion Zone’ blocked USDAW’s argument on the implied term as it would duplicate the statutory right to claim unfair dismissal. The Johnson Exclusion Zone is the rule that an employee cannot seek damages for breach of the implied term of trust and confidence on how they were dismissed. However, the court held that this principle should not be extended to other implied terms and that this did not impact the unfair dismissal regime.


The case represents a big shift in the law but turned on the ‘extreme’ facts of the case. 2022 will certainly not be the year that the practice of ‘fire and rehire’ comes to an end. However, in light of the judgment and the ACAS advice, it is clear the tactic must remain a last resort.

Top takeaways

  • Fire and rehire must be the last resort having exhausted all other options;
  • It is essential that there is a robust commercial reason for why the change is required and this should be communicated transparently to affected employees from the outset;
  • Communication and caution are key when dealing with any change to employee terms. An effective consultation process is more likely to result in a positive solution. Mutual agreement between the staff and the employer to change the terms and conditions will always be the safest option.
  • To be effective, consultation should be a means of attempting to find an agreement and so compromise may be necessary on both sides.

Sharpe Pritchard has an experienced team of employment solicitors who regularly advises public sector clients on all manner of contentious and non-contentious employment law matters. Please contact Christian Grierson if you wish to discuss the implications of this article in more detail.

Christian Grierson is a Solicitor and Julie Bann is a Partner at Sharpe Pritchard LLP.

For further insight and resources on local government legal issues from Sharpe Pritchard, please visit the SharpeEdge page by clicking on the banner below.

sharpe edge 600x100

This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email This email address is being protected from spambots. You need JavaScript enabled to view it.

LACAT BookFREE download!

A Guide to Local Authority Charging and Trading Powers

Written and edited by Sharpe Pritchard’s Head of Local Government, Rob Hann,

A Guide to Local Authority Charging and Trading Powers covers:

• Updated charging powers compendium          • Commercial trading options

• Teckal ‘public to public’                                    • Localism Act


LACAT BookAvailable to buy:

A Guide to Local Authority Companies and Partnerships

An invaluable, comprehensive toolkit for lawyers, law firms and others advising
on or participating in Local Authority Companies and Partnerships”

- Local Authority Chief Executive


  More Articles

Icons House

A renewable future: focusing energy solutions at a local level

Natasha Barlow and Steve Gummer discuss the 'Energy Trilemma' and how it is playing out at a local level.
Icons Date

Procurement Bill – Initial impressions from the first draft

Juli Lau and Sophie Mcfie-Hyland outline their initial impressions from the first draft of the Procurement Bill.
Icons Hazard

Let’s paint the town green! Government plans for green homes

Laura Campbell discusses the change urgently needed in towns and cities to make the landscape greener.
Icons House

The Queen’s Speech in Brief

The number of Bills which affect public sector clients is greater than usual – and the government have got straight off the starting blocks by publishing some of them already.
Icons Hazard

Refurbishment and Retrofitting: In with the old, out with the new!

Sharpe Pritchard analyse the challenge of decarbonising the construction sector.
Icons House

NET ZERO – What obligations are there on the UK to achieve it?

Radhika Devesher takes a look at the legal duty to achieve net-zero placed upon the UK.
Icons House

Championing green goals through public buying

Juli Lau considers how public purchasing power can be used to champion Net Zero goals, and how public procurement might be used as another driver for change.
Icons Hazard

Top Tips for Local Authority Lawyers advising on Data Protection Matters

Charlotte Smith and Hannah Peto set out some of their top tips to consider when advising on data protection matters.
Icons Court

The Cost of Freedom of Information – The Council’s Failure to Advise

Charlotte Smith and Nadia Ahmed summarise the case and judgement of Moss v Royal Borough of Kingston-upon-Thames and another (NJ/2018/007).
Rob Hann Photoshop

Ask the Author

These are frequently asked questions to Rob Hann from colleagues in Local Government via the Sharpe Pritchard ‘Ask-the-Author' facility concerning the subject matter of his books on local authority companies, partnerships, charging and trading.
Icons Court

A call to review public contracts with Russian suppliers

Juli Lau and Gonzalo Puertas discuss the first official document to consider public sector contracts with companies linked to the Russian and Belarusian state regimes, issued by the Cabinet Office.
Icons Date

A New NEC Option to tackle greenwashing in the construction industry

Allan Owen and Sophie Drysdale discuss 'greenwashing' in the construction industry and a new secondary option clause X29 for its NEC4 suite of contracts developed by NEC.
Icons House

The Pathway to the Future – The Road Map for Employment Tribunals

David Leach discusses and outlines the road map of the planned changes for modernising the Tribunals in 2022 and 2023 released by The Presidents of the Employment Tribunals.
Icons House

Farrar Out

Clare Mendelle and James Goldthorpe discuss how the insolvency of Farrar Construction leads to clarity from the Courts on dealing with an insolvent contractor under JCT.
Icons House

The UK government has this week introduced the Economic Crime (Transparency and Enforcement) Bill

Peter Collins and Sophie Pilcher discuss the Economic Crime (Transparency and Enforcement) Bill introduced by the UK Government this week.
Icons Hazard

A sweet truth for selectivity

Steve Gummer and Gonzalo Puertas discuss a case that concerns an application for judicial review seeking to challenge a decision to introduce a zero-duty autonomous tariff quota (“ATQ”) of 260,000 metric tonnes of raw cane sugar for refining.
Icons House

Adjudication 101: Introduction and Overview

Michael Comba traces the origins of adjudication and considers why the process was introduced, who it is aimed towards and how construction contracts must include certain provisions.
Icons Date

New Government Guidance on PFI Expiry

Rob Hann, Head of Local Government at Sharpe Pritchard, takes a look at new guidance on PFI expiry recently published by the IPA to help public bodies wrestle with the complexities of transition they will face as these contracts reach full term.
Icons Hazard

Three new Levels to ‘level up’ Local Government in England?

Rob Hann, Sharpe Pritchard’s Head of local government, takes a look at the new proposals under the Government’s Levelling Up White Paper to facilitate devolution to remaining regions of local government in England which are currently without a Mayoral Combined Authority.
Icons Hazard

Progress on Climate Change action plans in Local Government

Stephen Cirell discusses the progress on climate change and renewable energy action plans within Local Government.
<a href=

Witches’ hats, sexist comments, and a £2 million pay-out

Julie Bann and Christian Grierson discuss a case in which a finance specialist has won over £2 million in compensation, after claims of sex discrimination and unequal pay.
Icons Hazard

Stuck in traffic?

High Court rules “VIP Lanes” For PPE contracts breached fundamental procurement law principles, in latest Judicial Review victory for the Good Law Project.
<a href=

Local Authority Sports and Leisure provision – Challenges Post-Covid19

With the unique circumstances posed by the Covid 19 pandemic and temporary closures of Council-sponsored sports and leisure facilities, Rob Hann, Sharpe Pritchard’s Head of Local Government outlines some of the challenges the sector faces.
<a href=

Bucking the Trend on Specific Performance Buckinghamshire Council v FCC Buckinghamshire Limited

Clare Mendelle and James Hughes highlight the wide definition of Third-Party Income and the measures the courts are prepared to take to enforce the terms of longstanding contracts, by analysing the Buckinghamshire Council v FCC Buckinghamshire Limited case.
<a href=

The Government’s response to the Transforming Public Procurement consultation: what will change and what will not?

Juli Lau, Colin Ricciardiello, Beth Edwards and Natasha Barlow analyse the Government’s response to the Transforming Public Procurement consultation.
<a href=

Momentum for Heat Network Roll Out Gathers Pace

Steve Gummer discusses the increased momentum for a Heat Network Rollout.
Icons Hazard

Unconscious Bias, Discrimination and a Warning to Public Sector Employers

Christian Grierson and Julie Bann discuss two employment tribunal judgements, which provide a stark warning to public sector employers about unconscious bias and discrimination.
Icons Hazard

Levelling up – A new opportunity for further devolution in England?

Rob Hann explores the Government's 'levelling up' policy and looks at whether it is an opportunity for further devolution in England.
<a href=

Time limits for commencing proceedings in procurement challenges

Colin Ricciardiello discusses a landmark procurement challenge judgment on the time limit for commencing proceedings.
Icons Hazard

The Revised National Planning Policy Framework: Better design, greener outcomes?

Alastair Lewis and Sarah Wertheim outline the latest National Planning Policy Framework changes and explain how future developments will be impacted by the new rules.
Slide background