Did P&O Ferries sack 800 staff unlawfully?

On Thursday 17 March 2022, P&O Ferries sacked 800 members of their crew on grounds of redundancy by way of a video message, in what they said was a “very difficult, but necessary decision to secure the viability of the business.”

The company’s actions have been met with widespread condemnation with many viewing the treatment as highly immoral and unfair… but was it unlawful? Read on to find out.

What does failure to consult mean?

Where an employer is planning to make 20 or more staff redundant within any 90 day period, they must notify the Secretary of State and collective consultation must be carried out. This is where an employer discusses and consults upon redundancy plans with a recognised trade union, or employee representatives. 

Where 100 or more redundancies are to be made, collection consultation must be made at least 45 days before the first dismissal takes place.

There is no rule for how long consultation must last, but it should include open and honest conversations about the process and alternatives should be considered to avoid the need to make redundancies.

If an employer does not hold collective consultation when it is obligated to do so, employees can bring claims against them in the employment tribunal. If they are successful, the employee may be entitled to a “protective award” to compensate them, which can be up to 90 days’ gross pay for each affected employee.

It was conceded on 24 March 2022 by P&O’s boss, Peter Hebblethwaite, that no consultation was carried out and the video message was the only notice that was received by the employees. He said this decision was taken because the company considered it had no alternative in order to continue trading and that no union would have accepted the changes that were planned. 

Based on this alone, P&O did not comply with their obligations.

Unfair dismissal

Additionally, employees with more than two years’ service have the right not to be unfairly dismissed. 

Redundancy is one of the five fair reasons for which employees can be dismissed but, arguably, because P&O have announced that they will be replacing those dismissed with agency workers, there may not be a genuine redundancy situation.

A genuine redundancy situation is one when an employer has a real business reason to justify the dismissals, such as a:

• Business closure
• Workplace closure
• Reduced requirement for employees

In order for a dismissal for redundancy to be fair, the employer must first establish that the redundancy was the real reason for dismissal and the employment tribunal must go on to find that the employer acted reasonably, in all the circumstances, in treating redundancy as the reason for dismissal. This also includes following a fair process.

It is likely that those employees who have been made redundant may also bring claims for unfair dismissal if they have the requisite service. If they are to be successful, they will be entitled to a basic and compensatory award, however, this will be reduced by any statutory/contractual or enhanced redundancy payments already received.

It is understood that P&O have offered an enhanced settlement package to the affected employees, which comprises two and half week’s pay for each year of service plus six months’ pay. In return, they are required to enter into a settlement agreement which contains non-disclosure obligations. 

If the employees do accept these enhanced sums and enter into a settlement agreement, then they will not be able to bring any claims in the employment tribunal, as the purpose of a settlement agreement is to waive claims related to their employment and the termination of it.

How to carry out a fair redundancy process

We would not recommend making redundancies in the way that P&O Ferries did, as undoubtedly they have exposed themselves to the risk of potential claims and, regardless of any claim/claims and whether they are successful or not, they have severely damaged their reputation in the process.

If you do need to make redundancies, our redundancy portal is an invaluable tool which gives you access to useful documents such as a best practice guide, template letters for each stage of the process, selection matrices and much more.

We have designed value for money packages, accessible entirely online via a password protected portal, for redundancies. This portal is for employers who have fewer than 20 employees for which individual redundancy consultation must be undertaken. Access to these guides, templates, and advice is available for a one-off payment 

https://www.birkettlong.co.uk/site/mybl/restricted-redundancy-fewer-than-20.html 

For more than 20 employees:

https://www.birkettlong.co.uk/site/mybl/restricted-redundancy-more-than-20.html

 I'm an employee who is facing redundancy

We have created a free kit which provides information to explain the process ahead of you, what redundancy procedures your employer must follow, examples of the kind of letters you might receive and guidance on what you need to do. 

To access these templates, we ask that you sign up to our free portal. This is a simple one step process and does not mean you are signing up to anything but accessing these documents. 

Please find the link, below:

 Employee Redundancy Kit - Birkett Long Solicitors

If you are an employer or an employee facing redundancies and feel you need more specific, tailored advice on your situation, then please do not hesitate to get in touch. 

Similarly, if you have been offered a settlement agreement by your employer, or would like one drafted for an employee, then are able to assist.