Did P&O Ferries break the UK Law?
An assessment of whether P&O FERRIES broke employment law by not informing and consulting with staff before making them redundant
On 17 March 2022 P&O Ferries made 786 seafarers redundant. The seafarers were not given prior notice of the redundancies and they were given a deadline of 31 March 2022 by which to accept enhanced settlement packages. P&O Ferries then went on to replace the seafarers with agency staff who are being paid at a lower rate.
The CEO of P&O Ferries, Peter Hebblethwaite, has said that the decision to make 786 seafarers redundant was taken as a last resort and only after full consideration of all other options “because the company could not have survived otherwise”.
Mr Hebblethwaite has also said that the dismissed employees would be compensated “in full”, with a package worth £36.5 million.
Where there is a proposal to make more than twenty employees redundant within a ninety-day period, an employer is required to notify the Secretary of State at the Department of Business, Energy and Industrial Strategy (BEIS), which P&O Ferries did not do. Failure to notify the BEIS is a criminal offence and carries an unlimited fine.
Section 188 of the Trade Union Act 1992 requires a collective forty-five-day consultation where more than one hundred employees are affected by redundancies.
The consultation should include consultation about ways of avoiding the dismissals, reducing the numbers of employees to be dismissed, and mitigating the consequences of the dismissals, and should be undertaken by the employer with a view to reaching an agreement with the appropriate representatives.
Did P&O Ferries break UK Law?
There has been some confusion as to whether P&O Ferries broke UK employment law. This is because, laws made in 2018, mean that the position of notifying the BEIS may be slightly different for seafarers. Where a ship is registered to another country then the employer’s obligation is arguably to inform the relevant authorities in those countries about the proposed redundancies, rather than the UK authorities. P&O Ferries have said that they notified the relevant authorities in Barbados, Bermuda and Cyprus on 17 March 2022 the same date they informed the seafarers that they were to be made redundant.
If P&O Ferries were subject to UK Law, they would have had to inform the 786 seafarers that they were at risk of redundancy, which P&O Ferries failed to do. They would also have needed to consult with the seafarers and the union as to the best
means to achieve the desired management result with as little hardship to the employees as possible, which P&O Ferries also failed to do. P&O Ferries did not seek to agree with the union the criteria to be applied in selecting the seafarers to be made redundant and made no attempt to consult with the seafarers or their union representatives prior to17 March 2022. All decisions concerning the best way to save the business were made unilaterally by P&O Ferries. Mr Hebblethwaite admitted to an MP committee that he did not consult with the union prior to making the dismissals because “no union would accept our proposal.”
Can the seafarers who were made redundant pursue claims against P&O Ferries?
All but one of the seafarers have signed agreements and accepted enhanced settlement packages. By signing these agreements, they have forfeited their legal right to pursue any claims in the Employment Tribunal against P&O Ferries in relation to anything connected to their employment or the termination of their employment.
Had the other 785 seafarers not accepted compensation payoffs they may have been able to pursue claims for unfair dismissal, statutory redundancy payment and notice pay in the Employment Tribunal against P&O Ferries.
In addition to the redundancy pay and notice pay entitlement, an employee who is successful with an unfair dismissal in redundancy case will normally be entitled to a basic award. The employee will also be entitled to compensation (a ‘protective award’) for financial loss arising from the unfair loss of their job. This can be up to ninety days’ full pay.
In some cases, the Tribunal may make an order for the employee’s reinstatement or re-engagement, instead of monetary compensation. In such a case compensation will be ordered to cover the intervening period between dismissal and reinstatement or re-engagement.
Requirement for pursuing a claim in the Employment Tribunal and deadline to make a claim
A claim for unfair dismissal must be made within three months less one day of the date their employment ended.
As this case involves the maritime sector it is more complex. In cases where companies are registered in, and workers recruited from different countries employees will first have to show a close connection to the UK to demonstrate that their
employment is governed by UK law if they wish to pursue claims in the UK Employment Tribunal. They will also have to have ‘employee’ employment status and have worked for the organisation for two years.
Some consequences of P&O’s actions
On 1 April 2022, the Insolvency Service confirmed that it has commenced formal criminal and civil investigations into the circumstances surrounding the recent redundancies made by P&O Ferries. They will report on its findings in due course.
The government has committed to introducing legislation to ensure only ships that pay workers at least National Minimum Wage will be allowed in UK ports.
The one seafarer to have not accepted a compensation payment is pursuing claims in the Employment Tribunal for unfair dismissal, racial discrimination and harassment against P&O Ferries and the chief executive. They are seeking £76 million in damages to create a trust to campaign for better wages and to prohibit ‘fire and hire practices.
How can Ali Legal Limited help?
If you are an employee facing difficulties at work or have been dismissed. Similarly, if you are an employer looking for advice in managing your workforce or navigating the redundancy process, please contact our specialist Employment team on 0203 011 4314 or firstname.lastname@example.org.