Tesco restructure and redundancies and what this means for employees

Tesco has just announced a series of proposed changes to its business most notably the reduction of Lead and Team Manager roles presenting nearly 1,750 staff with the prospect of redundancy.

The proposed changes affecting UK stores also include:

• The introduction of around 1,800 Shift Leader roles;
• The closure of counters and hot delis from 26 February;
• The closure of 8 pharmacies;
• Reduced hours within some Post Offices;
• The cessation of certain roles in Head Office; and
• Closure of the Tesco Maintenance National Operating Centre in Milton Keynes.

You can view Tesco’s press release on these proposed changes here.

What is the statutory consultation process?

Due to the size of the restructure and possibility of redundancies Tesco has entered into a collective consultation process with USDAW (a trade union).

Pursuant to section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992, Tesco is subject to a legal obligation to consult with trade union representatives (or other elected employee representatives) because it is proposing to make 20 or more redundancies in any 90 day period.

Trade Unions such as USDAW are able to offer advice and representation to its members in difficult employment situations like this. In this instance, USDAW are effectively the agent who will bargain with Tesco on behalf of the affected employees.

Due to the volume of proposed redundancies, Tesco may also be obliged to notify the Department for Business, Energy & Industrial Strategy of its’ proposed redundancies should 20 or more employees be affected at one establishment.

Because Tesco may make 100 or more redundancies, the collective consultation process must commence a minimum of 45 days before the date on which Tesco envisages that the first of any dismissals will take place.

What does collective consultation mean for me?

Just because you are invited to engage in the collective consultation does not necessarily mean that you will be dismissed. All employees who may be affected by the proposed dismissals, or affected by any related measures that come into effect as a result, such as changes to your terms and conditions of employment, will also be invited to participate.

The purpose of the consultation process is to try and achieve an agreement whereby:

• Dismissals are avoided or reduced: for example by moving staff to other locations, taking early retirement or being re-deployed elsewhere in the business; and
• To mitigate the consequences of any dismissals made: for example by offering enhanced terms of redundancy.

What might the outcome be?

It is clear that Tesco proposes to re-deploy some staff into other roles including the newly created Shift Leader roles. For staff that Tesco dismisses, they may be offered a settlement agreement. You can read about what a settlement agreement is here.

This is not an exhaustive list of outcomes but in any event, it is important that you carefully consider any new terms that you are offered including for example, any changes to your pay and benefits.

You can access helpful guidance from Acas about calculating what your redundancy pay might be here or alternatively, use our redundancy calculator here.

Should you require advice on a settlement agreement, or are concerned about the prospect of redundancy, or perhaps need assistance in negotiating with your employer, contact our Employment Law Department for assistance on 01202 525333 or by email at employment@ellisjones.co.uk.