Employment lawyers reacted with surprise after P&O Ferries sacked 800 seafarers out of the blue, warning it may have broken several laws and could be hit with claims for unfair dismissal.
As staff staged sit-ins on the company’s boats, with the backing of their trade unions, experts cast doubts over the legality of P&O’s plot to replace them with cheaper agency workers.
The affair could end up costing P&O “hundreds of thousands” in unfair dismissal payouts and penalties for legal breaches, they said.
What laws is P&O accused of breaking?
Employers are legally required to consult workers during a statutory notice period before making them redundant. P&O did not do this, so trade unions believe that its actions are likely to be unlawful.
“For those staff who have been, or are about to be dismissed, they will certainly have claims for unfair dismissal,” said Rustom Tata, chairman and head of the employment group at law firm DMH Stallard, adding that elements of employment law appeared to have been “wholly ignored”.
Further, employers wishing to make more than 100 redundancies must notify the business secretary at least 45 days in advance of those dismissals. On Thursday afternoon, a No10 spokesperson said: “We weren’t given any notice to this.”
Failure to notify the secretary of state would be a breach of the Trade Union & Labour Relations (Consolidation) Act 1992, the TUC said.
Unions representing P&O workers have been consulting lawyers with a view to taking legal action.
Redundancy notices are being issued, with the P&O apparently having recognised the unlawfulness of its actions with comments that enhanced compensation will be paid.
P&O’s offer of “enhanced” redundancy packages indicates that it may have “recognised the unlawfulness of its actions”, according to Tata.
Frances O’Grady, general secretary of the Trades Union Congress, said: “If P&O breached the law they must suffer severe consequences – with ministers increasing the legal penalties if necessary. If one employer gets away with this, every worker is at risk.”
Is this “fire and rehire”?
Fire and rehire is a hugely controversial method used by some companies, usually – but not always – when in dire financial straits. It involves sacking staff and then telling them they can apply for their old jobs on less favourable terms. Companies that have deployed the tactic include Weetabix, Tesco, British Airways, Heathrow and British Gas. Trade unions and the public support a ban on the practice but ministers last year blocked a bill that aimed to do just that.
The government would be “dismayed” if P&O were doing this, a No 10 spokesperson said. But what P&O is trying to do looks slightly different. Rather than rehiring staff to their old jobs, it is replacing them with agency workers and saying that sacked staff could, if they wanted, join those agencies.
“That is effectively seeking to avoid having to renegotiate terms with staff and their representatives,” said Tata.
The TUC said it was not yet clear if P&O was planning to rehire staff on inferior terms but warned it was a growing trend, with 9% of workers affected by such a scheme in the first year of the pandemic.
What now for P&O workers?
Some are staging sit-ins aboard the company’s ferries, with the support of unions such as the RMT and Nautilus International.
Kathryn Evans, head of employment at law firm Trethowans, reckons staff could end up being paid “hundreds of thousands of pounds in failure to consult and unfair dismissal awards.”
But Tata warned that the sit-ins could prompt a backlash from the company too.
“The question may become whether it is lawful and reasonable for the employer to require the employee to leave the vessel and what the impact will be of an employee refusing to do so,” he said.
“Might any unfair dismissal compensation be reduced to nil? Given the employer’s approach it is quite likely that the employees will find considerable sympathy in the employment tribunal – albeit when any case is finally heard.”
