UK Employment Law has been back in the news recently when it was revealed that P&O Ferries announced immediate dismissals, without notice, to 786 employees over a pre-recorded Zoom message.
The move incurred outrage across the business and trade union community, with the Prime Minister even weighing in saying it appeared P&O broke the law.
That was the question on many people’s lips… “surely, they can’t just do that?”
In this article we will explore whether P&O broke the law, what happens next, and what to be mindful of as an employer.
Did P&O break the law?
Employees and workers in the UK have the right not to be wrongfully dismissed. If they have more than two years’ service, employees also have the right not to be unfairly dismissed.
There are also requirements for meaningful consultation with employees. Where more than 20 employees are at risk of redundancy, the employer is also required to undertake collective consultation for a set period (depending on the number), as well as informing the Government of their intention.
P&O didn’t undertake any consultation or provide notice. They also, it appears, didn’t undertake a fair process and they did not file the necessary paperwork with the Government.
On the face of it, it seems they didn’t follow UK employment law. Surprisingly, the P&O CEO admitted to a House of Commons Select Committee, just days after the news broke: “There is absolutely no doubt that we were required to consult with the Unions. We chose not to do that.”
There are, however, complex questions about whether UK employment law applies in these circumstances. P&O will likely rely on a combination of maritime law and the law of other relevant jurisdictions to suggest our own rules do not apply. Whilst it is likely UK employment law will apply as the majority of the workers appear to be working from ports in Dover and Hull, only an Employment Tribunal will have the power to decide.
What happens next?
P&O have claimed they did an assessment of the risks of not complying and they have set aside £36.5m to compensate affected employees, with each individual receiving no less than £15,000.
When speaking to non-lawyers about the situation they have been surprised to hear employers can simply bypass laws and pay compensation. Whilst it isn’t quite as simple as that, it is clear P&O decided the move is “worth” the possible fines, tribunal claims, and reputational damage to ensure an extremely swift exit of nearly 800 employees. There is still, however, a risk of Tribunal claims, and criminal cases being brought.
Claimant law firms and trade unions will no doubt be working hard to bring claimants together to lodge a large group claim in the Employment Tribunal, ensuring they get the claims in within the 3-month time limit.
The Government has also intervened, with suggestions of unlimited fines and possible new laws to stop this kind of behavior from bosses in future.
It may be P&O didn’t account for the public backlash. Or it may find itself able to provide enough compensation to individuals to deter them from pursuing lengthy Tribunal claims.
Why does it matter?
Aside from this possibly affecting your choice of Cruise ship provider, if you run an organisation with employees, the case is a timely reminder of your legal requirements during restructures and dismissals, as well as the unpredictability of the court of public opinion.
If you are thinking about dismissals, redundancies, or restructures it is sensible to seek specialist advice to ensure you have followed the correct procedures and protected your organisation from expensive Tribunal claims. Whether large or small, all employers have legal obligations to follow.
It is also a reminder of the impact of poor decision making on staff morale, potential partners, or customers, as well as the ability of legislators to intervene. Being hauled in front of a Government Select Committee can’t be a pleasant experience.
P&O may have decided they can swallow a £36.5m hit, but the consequences of potential unlimited fines may make that decision an even more costly one. Only time will tell.
Sam Butler is an employment solicitor and partner in our legal team. You can contact him with any queries here.