The P&O Ferries’ sackings show the damage that be done by mishandling job cuts, says KAREN HARVIE
The pandemic has certainly been the source of great stress and pressure on many companies around the world. The exceptional nature of the crisis has almost certainly led to some business decisions which, in normal circumstances, might not have been taken, or at the very least would have been given more consideration.
Staff probably represent the greatest cost for any business and, as such, it has not been surprising that many firms have focused on this area when reviewing their current operations.
There has been no shortage of stories telling of poor employment practices and the manner in which redundancies, for example, have been managed. But there is little doubt about arguably the most extreme example of this – P&O Ferries.
On 17 March the company made 800 of its staff redundant with immediate effect. This was quite a shocking moment- especially for those affected. P&O Ferries has argued that the company, in its current state, would not have been viable without such action.
However, there was more to come.
Firstly, staff were given this message over a video call. Secondly, they were told that their roles would then be filled by agency staff who would be paid between £5.15 and £6 an hour – well below the minimum wage.
Thirdly, and this is not yet the end of the matter, the CEO of P&O Ferries admitted to a Commons select committee that the company chose to break the law by not consulting before sacking staff. The reason? They knew “no union would accept our proposal.”
Quite a collection of actions for one company to be involved in.
Broadly speaking, the UK collective redundancy rules require an employer to inform and consult employee representatives when proposing the dismissal 20 or more employees by way of redundancy at an establishment within a 90 day period. The period of consultation will depend on the number of employees to be made redundant. In P&O Ferries’ case there were more than 100 employees being made redundant so the consultation period should have started at least 45 days before the first dismissal took effect.
The consultation period should have started on at the latest on Monday 31 January.
During the 45 day period meaningful consultation should take place, including on ways of avoiding the redundancies or mitigating the consequences of redundancy. Consultation should take place before any decision to terminate employment has been made.
Of course, this case involves a range of additional complications, not least that a number of vessels were registered abroad, including Bermuda, Bahamas and Cyprus. But that cannot disguise the actions of the firm and the treatment of its people.
Given the reputational and financial damage the company is now suffering it should serve as a reminder to all UK businesses and organisations that employment law is a serious matter and should be adhered to at all times.
Employment law and the related regulations are complex but they exist for the protection of both employee and employer – failure to follow these can result in serious harm to a business, and, in some cases, its end.
The P&O Ferries situation has a way to run but firms in this country should view it as a case study in how not to do things when it comes to employment matters.
The lesson is to get it right, and if you don’t know enough about it, find a professional who does.
Karen Harvie is senior associate in employment law at Aberdein Considine