Employment Law: P&O Ferries Case Study | April 2022

Employment Law: P&O Ferries Case Study | April 2022

P&O Ferries’ recent dismissal of 786 members of staff raises serious questions as to the legality of redundancies with immediate effect.

The known facts behind the mass dismissal is that on the 17th March P&O announced their decision (via zoom) to terminate 786 staff with immediate effect from those employed from the Port of Dover, Kingston upon Hull, Liverpool and Cairnryan – they chose not to consult what are the legal implications.

The law on collective redundancy requires a duty to consult and Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A) provides that:

"Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals."

Section 188(1A) also states that the consultation shall begin in good time and, where the employer is proposing to dismiss 100 or more employees, at least 45 days before the first of the dismissal takes effect, and at least 30 days where the employer is proposing to dismiss between 20 and 99 employees.

A further requirement is the employer must notify the Secretary of State in writing of the proposed redundancies before it gives notice to the affected members of staff that their contracts will be terminated - however, a letter from the Secretary of State to P&O suggests this did not happen. Peter Hebblethwaite (P&O CEO) stated to a House of Commons Select Committee (24/03/22) “We chose not to consult … and we will compensate everyone in full for that”.

When looking at the level consultation, the employer is required to provide:

  • the reasons for the proposed dismissals
  • the numbers and descriptions of employees whom it is proposed to dismiss as redundant
  • the proposed method of carrying out the dismissals ie: selection

So does all the above apply to the P&O Case? P&O have argued that it doesn’t as the ships are registered in Cyprus, the Bahamas and Bermuda and as such the company have referred to the Directive 98/59/EC as amended in 2018:

‘Where the projected collective redundancy concerns members of the crew of a seagoing vessel, the employer shall notify the competent authority of the State of the flag which the vessel flies’.

https://www.legislation.gov.uk/eudr/2015/1794/article/4/2020-12-31

A second legal point to consider is TUPE and does it apply in this case?

P&O are saying that they will bring in other parties, using agency workers to perform the jobs of the employees made redundant. It appears as though they are effectively outsourcing these roles to a contractor and if that’s the case then there is a strong argument that the employees who have been told they are redundant should have had their employment transferred to whoever P&O are bringing in.

A further point is what P&O are proposing to pay these agency staff and should the UK National Minimum Wage apply here to all workers engaged on all the routes affected by this decision?

If it is proven that P&O have breached legislation in these areas it could attract significant compensation liabilities especially around protective awards for failing to consult and TUPE.

This case has got a lot on miles to go and as it unfolds, we will continue to update on this and related developments.

NB: This information is for general guidance only and is not legal advice. It should not be regarded or relied upon as a complete or authoritative statement of the law. However, if you have any HR issues on this or any other HR matters and would like to talk them through with our team, please contact us.

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