The backlash against P&O Ferries has been swift and fierce after the firm apparently sacked 800 staff by video message without any prior warning, consultation or even notice being given.
Understandably P&O’s decision has been met with a great deal of criticism and has prompted the Government to intervene after it allegedly fired its employees, planning to replace them with cheaper agency staff.
Maritime minister Robert Courts said he was "frankly angry at the way workers have been treated". He told the House of Commons P&O Ferries' actions were "wholly unacceptable". "Reports of workers being given zero notice and escorted off their ships with immediate effect while being told cheaper alternatives would take up their roles, shows the insensitive nature by which P&O approached this issue," he said.
Unions have hit out against the P&O’s decision saying that it has marked a “dark day” in the shipping industry.
Former transport minister Sir John Hayes also criticised the "capricious, careless, callous" decision, and suggested the government should "recover any monies granted to P&O during the pandemic" in a bid to reverse it.It has been reported that P&O Ferries claimed almost £15m in government grants in 2020, which included furlough payments for its employees.
So what are the rules and how should P&O have acted? We have put a note below as to the current procedure that should be followed in circumstances such as these.
Collective Redundancies
As there are more than 20 employees under the current circumstances then this would be covered under the collective redundancy consultation provisions noted in section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULCRA). Despite the fact that on the face of it that it appears is it is not a redundancy situation, as the jobs are still required, employers must still consult on its proposal with representatives of the affected employees and also notify the Department for Business, Energy and Industrial Strategy (BEIS). This does not appear to have been followed at all and a clear contravention of the rules currently in force. Failure to do report it to BEIS is a criminal offence, so it is expected that P & O will have done this albeit later than ?
Employers need to ensure that they follow correct procedures and apply them fairly. Employees have a number of rights in a redundancy situation. Employees who are dismissed by reason of redundancy may be entitled to a statutory redundancy payment and they may be able to challenge the termination of their employment as an unfair dismissal. On top of that employees can claim a protective award of 13 weeks’ wages if there has been a failure to collectively consult.
TUPE
Further, P&O are saying that they will bring in other parties using agency workers to perform the jobs. Noele McClelland, Partner in Thorntons Lawyers says:
“While undoubtedly we don’t know the full story of what P&O have done, if they are effectively outsourcing these roles to a contractor then there is a strong argument that the employees who have been told they redundant should have had their employment transferred to whoever P & O are bringing in under rules known as TUPE. We definitely don’t have the full story but one thing which is clear is that this is a PR disaster for the company and severely damaging to industrial relations.”
An employee's rights in a redundancy situation
Employees have the right not to be unfairly dismissed (section 94, Employment Rights Act 1996 (ERA 1996)). In practice, this means the right to be consulted in accordance with the Polkey guidelines and the right to be offered suitable alternative employment where possible. However, the right not to be unfairly dismissed only applies to employees who have completed the qualifying period of service of two years.
Regardless of an employee's length of service, an employee has the right not to be selected for redundancy on certain prescribed grounds as the dismissal will be automatically unfair. In a "collective redundancy situation", all affected employees have the right to be informed and consulted in accordance with section 188 of TULCRA.
All employees dismissed for redundancy have the right to contractual notice, subject to statutory minimum notice (section 86, ERA 1996). Employees with two years' qualifying service have the right to receive a statutory redundancy payment. An employee may also be entitled to a contractual redundancy payment, if there is an express or implied right to one.
If the employer is insolvent or refuses to pay, the employee has the right to apply to the National Insurance Fund for unpaid "employer's payments", including their statutory redundancy payment and certain sums due under their employment contract.
P&O appears to have not followed the legislation that governs this area. The employees affected and dismissed for redundancy have the right to contractual notice, subject to statutory minimum notice which has not been followed in the circumstances where zero notice was provided. Before making any redundancies, the employer must consult on its proposal with representatives of the affected employees and also notify the Department for Business, Energy and Industrial Strategy which does not appear to have been followed either and a clear breach of the rules in existence.
It remains to be seen how this saga will unfold however more protests over the P&O decision are reported to be taking place by P&O employees over the handling of the staff and clear breaches to employees’ rights that have taken place.
For more information or assistance please contact Noele McClelland in Thorntons specialist Employment Law team on 03330 430350.
