Fair play, sanctity of contract and respect for human dignity are principles deeply embedded in British culture. P&O Ferries’ summary sacking of 800 workers in a pre-recorded Teams message so they could be replaced within hours by agency workers at allegedly half the cost offended all three. It was a callousness from which even 19th-century mill owners and ship owners shrank. Conservative ministers, given to see each principle through employers’ eyes as expendable if the circumstances so require, were roused to share the widespread outrage. The archbishop of Canterbury caught the public mood when he described the act as “inhumane and unethical”.
Both the business secretary, Kwasi Kwarteng, and the transport secretary, Grant Shapps, wrote to the company accusing it of outrageous behaviour, offering the government no time to organise remedial action – managing to correct their originally wrongly addressed letter to P&O’s now departed chair with unusual alacrity. The mistake betrayed the distance between government and business that is part of the problem. Meanwhile, the case has been referred to the Insolvency Service to see if any law has been broken. If so, warns Kwarteng, the company could face an unlimited fine. This is not a case where ministers can take the side of the company, even one anxious to limit losses it says run at £100m a year.
However, P&O, a subsidiary of Dubai’s DP World, will have taken care to see that it remained on the right side of Britain’s feather-light employment law, an international byword for laxity, wholesale bias to employers and legendarily weak enforcement. It justified what it did as a last resort, having effectively bypassed trade unions and bought out the employees’ consultation rights with a package at least as attractive as what they could achieve in a tribunal. Obeying the rule of law is thus recast as a business cost: if the rate of return is higher by buying out fundamental statutory obligations, then for an international company careless of its reputation it is an investment well worth making.
Nonetheless, one of Britain’s leading employment law experts, Bristol University’sProf Alan Bogg, identifies two areas where the company may have transgressed the law. The dismissals are most likely unfair under the dismissal legislation, and consultation rights over collective redundancies are sure to have been breached by these peremptory actions. However, the process of government lawyers coming to a judgment, possibly imposing a fine and then fighting the inevitable appeal will take months, if not years, as P&O will have calculated. The risk of a swingeing fine, unlikely even in this case, given the notorious laxities of employment law enforcement, will have been priced into P&O’s decision. By the time the issue is settled, it will be trading with its new agency staff – and those sacked on Thursday will be living with the consequences.
Brexiters argued that Brussels’ insistence on offering a modicum of worker rights throttled business. The claim was always arrant nonsense but the government promised a new employment act to exploit the alleged “opportunities of Brexit”, to codify the law around minimalist principles to remove any trace of dark anti-British values such as offering workers’ rights, entitlements and dignity at work. Those were for the sclerotic EU.
The bill is stalled, the government not daring to strip British workers of the remaining legacy of European rights, even though it did block a private members’ bill aimed at ending the egregious practice of firing and rehiring the same workers on lower wages and worse entitlements. Anti-trade union attitudes are deeply ingrained, but further weakening of employment law is now politically much more difficult. The proposed creation of a single enforcement body – perhaps even properly resourced – might finally be brought forward. There might (and should) also be clauses more closely aligning British and European law over collective redundancies and consultation, so that cynical employers cannot exploit differences. There is also an urgent need to consider stricter penalties and remedies to prevent fundamental rights being treated as business costs. Britain should be setting a gold standard in such regulation – not leading the race to the bottom.
P&O’s trading problems, like those of swathes of UK-based businesses, were a direct result of plummeting trade with the EU post Brexit, in its case, collapsing freight volumes on its ferries. Negotiating participation in the single market, however off-limits the proposition may currently be to Britain’s political class, and aligning our employment law to the EU’s where necessary, would do much to restore trade flows, underpin real wages and promote decent behaviour in the workplace.
Capitalism does not have to be like this. DP World professes a commitment to best corporate governance and responsible capitalism, but its refusal to abide by its promises has already triggered the resignation of one non-executive director, Mark Russell.
British company law, like employment law, is phenomenally lax. As an international ferry operator, P&O provides a key public service. It should be allowed to trade in Britain only if it incorporates as a company consecrated to delivering public benefit, to be held to account by its shareholders and stakeholders for so doing. The government could do more than wring its hands over the bad name P&O has given to capitalism. It could act to change the current dynamic for the benefit of all. Be sure it won’t.
