– A lesson in how not to make redundancies
Few of us can have failed to be horrified by last week’s news of P&O Ferries’ recent dismissing of their 800 strong sea-faring crew. The scenes on Thursday were quite extraordinary, with employees being told to disembark all passenger and cargo and then wait for an announcement. That announcement was a short video telling staff they were all being made redundant with immediate effect.
It is hard to imagine, a more casual disdain than sacking 800 workers ‘remotely’ in a message devoid of empathy. How will the communities (particularly in Dover, Hull and Stranraer) recover from what is likely to feel like an act of betrayal?
There is so much to unpick here, in employment law terms, that it might not be possible to do it justice in one blog. Although most employment law rights can be blatantly ignored by a determined employer, the cost (both financially and reputationally) of ignoring the law usually acts as a major deterrent. Apparently not so here. On the face of it, P&O Ferries have ignored pretty much every accepted employment law norm to bring in their plan to ‘save the future of the company’ with immediate effect.
Ignoring Collective Consultation rules
First, we have their apparent complete ignoring of collective consultation. The law requires employers to collectively consult for a period of 45 days in the event it wishes to make redundancies on this scale. Failure to do so can bring about unfair dismissal claims and also ‘protective awards’ for failure to consult. Whilst an Employment Tribunal has a discretion as to how much to award per employee (13 weeks’ pay or less), there is surely no defence here. Therefore P&O Ferries will be looking at a hefty award being made against them. On the back of a cereal box, I have calculated this to probably be £5-7 million. This claim will be brought by the trade unions on behalf of their members, so not ‘settled’ with individual settlement agreements.
Criminal offence too
One lesser-known angle here is that it is a criminal offence for an employer to fail to notify the Secretary of State (using the HR1 procedure) of impending redundancies. Apparently Grant Shapps was notified the day before the announcement. However his reply went to someone who had retired several months previously. The HR1 form is supposed to include the contact details of the business making the redundancies and other information – and if incomplete is rejected. This is potentially a personal criminal liability for the directors of P&O. One has to wonder what they are thinking – and it will be interesting to see what further facts emerge here.
800 unfair dismissals
There is likely, of course, to be 800 unfair dismissal claims too. From what we know, there has been no redundancy dismissal procedure at all. It feels likely that each person will have a strong claim for an unfair dismissal on the grounds of it being procedurally unfair. (In fact, they are probably automatically unfair – see below).
Presumably P&O Ferries have factored this in, when deciding how to calculate the apparent ‘enhanced payments’ that are being offered to the seafarers. I expect we will hear more news of this in the coming days/weeks. I doubt very much that P&O Ferries will be able to keep these offers confidential.
Subverting TUPE rules
It is difficult to see how their contracting-out of their seafaring workforce to a ‘third party agency’ could be anything other than a TUPE transfer. However, as with other areas of employment law, P&O Ferries appear to have ridden roughshod over this rule by dismissing all of their employees pre-transfer.
Such action will mean all the dismissals are automatically unfair dismissals. I expect that, in the grand scheme of things, P&O Ferries have also factored this in. I expect the ‘third party agency’ has made sure they have cast-iron warranties from P&O Ferries to ensure they are not liable for any ‘pre-transfer’ dismissals.
Health & Safety?
The health and safety of crew and passengers is paramount in the shipping industry. Whilst P&O Ferries must have presumably risk-assessed their plan to instantly replace 800 employees with agency workers, I wonder if they will be able to persuade the authorities – or their passengers – that their vessels remain safe? The new crew will not have sailed the routes or probably operated the vessels before. Who would want to sail on the first few crossings? Not me.
This is such a cynical move by the ferry operator, showing such contempt for the law, good practice, its staff, local communities and passenger safety that it is quite extraordinary that it has happened in 2022. I’m sure this is a news story that will run for some time.
In the meantime, let us hope it does not encourage other employers from acting similarly.