A senior MP and law firm partner have questioned P&O Ferries' decision to cut 800 jobs with immediate effect and replace staff with agency labour - as unions today continued to battle the controversial move.
The maritime giant today said it was sending 800 seafarers immediate severance notices as it bids to stem its losses. The news came after crews were told to keep ships at port this morning ahead of a major announcement.
Unions had said they were advising seafarers to stay on board their ships. This afternoon there were reports security guards were looking to board ships to remove crew members.
P&O Ferries news: 800 workers made redundant as company battles for survival - live updates
RMT general secretary Mick Lynch said: "We are seeking urgent legal action and are again calling for the Government to take action to stop what is fast turning into one of the most shameful acts in the history of British industrial relations."
Labour MPs and other unions have also slammed P&O's move, with former Shadow Chancellor John McDonnell calling it "the worst behaviour of a nineteenth century mill owner".
Conservative MP Huw Merriman, who chairs the Commons Transport Select Committee, described the developments as “deeply concerning”.
He said: “The Government must do everything it can to ensure that this appalling employment transaction cannot be completed.
“Concern remains as to whether this is lawful.
“Firing loyal staff and replacing them with cheaper labour sourced from elsewhere is not a model that the public will wear.
“That model was not acceptable when our national flag carrier airline attempted to adopt it, and it is not acceptable now.
“The Government should make it clear that it will not condone this behaviour. P&O’s parent company, DP World, must understand that British customers won’t do business with companies that treat their staff with contempt.”
The Citizens Advice website says: "You’re part of a ‘collective redundancy’ if your employer is making 20 or more people redundant. Your employer has to hold a group consultation if there’s a collective redundancy."
Tom Long, partner at Shakespeare Martineau, said: “P&O’s decision to fire 800 staff with immediate effect appears to contravene the requirements needed for a normal mass redundancy.
“Where an employer plans to make 20 or more redundancies, there is a requirement for a period of consultation with employee representatives, such as a trade union. That period is 45 days, where 100 or more redundancies are planned in any one location.
“As such, P&O would be expected to undergo this process before making any mass dismissals. It’s not evident whether this has happened, although it would appear not.
“If employees are made redundant they can bring a claim of unfair dismissal in the employment tribunal, with the maximum compensation being up to a year’s salary in most cases. If they were not paid their notice or a statutory redundancy payment, claims could also be brought for these payments.
“If P&O failed to carry out appropriate collective consultation in advance of the dismissals, the trade unions could bring a claim about that failure, with a potential award of up to 90 days’ gross pay per affected employee if the claim succeeded.
“It appears that P&O will be offering ‘enhanced severance packages’ to staff to compensate them for their dismissals, but whether that offer will be sufficient to prevent significant litigation awaits to be seen.”
Claire Brook, employment law partner at Aaron & Partners, has said controversial fire and re-hire practices have become more widely adopted in recent years.
She added: "P&O’s announcement today that it has terminated the contracts of 800 employees with immediate effect and press commentary that it intends to replace those employees with a lower cost workforce has highlighted this trend.
"UK employment law requires employers to notify the secretary of state and to enter into collective and individual consultation prior to the termination of 20 or more employees by reason of redundancy and/or where enforcing changes to terms and conditions of employment to 20 or more employees in an establishment within a 90 day period.
"Any employers considering redundancies or imposing changes to terms and conditions should seek advice in good time in advance of commencing such a process in order to ensure that they comply with the legal requirements and provide the appropriate training and support to their managers in conducting a fair and reasonable process - and in handling difficult conversations, perhaps the most challenging that they may face in their careers."
Could staff have an unfair dismissal claim?
Rustom Tata, Chairman and Head of the Employment Group at law firm DMH Stallard, said: "While the current law does allow ‘fire and rehire’, that is usually in relation to the same employees. The employer says that it cannot afford the current levels of pay etc, seeks to renegotiate, and in the absence of agreement serves notice to terminate employment while saying that it remains prepared to employ the individual on new terms.
"The issue here is that current staff (from a heavily unionised workforce) seem to be set to be replaced with a number of agency staff. That is effectively seeking to avoid having to renegotiate terms with staff and their representatives. 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.
"For those staff who have been, or are about to be dismissed, they will certainly have claims for unfair dismissal.
"There is a further potential twist for those staff who are refusing to leave their vessels.
"It appears that Nautilus International one of the trade unions involved has advised its members not to leave their vessels. 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. 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.
"Might the employer have a claim against the union for encouraging (or ‘inducing’ to use the legal term) the employee to breach their contract? The answer to the latter is probably not, given that unions are almost certainly acting within the law given that this is a clear trade dispute.
"One has to question the extent to which the integrity of the P&O brand will be impacted not only by the fact of redundancies, but also by the apparently wholly planned approach being taken to such a large proportion of its workforce ignoring some of the basic fundamentals of employee relations. It very much seems that there was no prior consultation or discussion with employees of their representatives, and large elements of the employment protection legislation are being wholly ignored.
"Details on specific numbers are not yet clear, but the political reverberations have already started, whether in relation to the dividends paid by P&O to shareholders in recent years, to the amount of furlough money received by P&O during the pandemic, or the question mark over the future of certain routes."
