March 31, 2022

P&O Ferries | Was their mass redundancy process justified?

The Chief Executive of P&O Ferries said he stands by his decision on the mass-redundancy over video call.

In the wake of P&O Ferries’ termination of some 800 employees jobs, there has been a lot of negative press coverage, government involvement and likely future claims from ‘sacked’ staff. Despite this, Peter Hebblethwaite, Chief Executive of P&O Ferries, claimed that he would make the same decision again because it had saved the business.

Hebblethwaite stated the reason for this was to save on staffing costs, as new employees hired in the ‘redundant roles’ are being paid between £5.15 and £6 an hour. This is significantly below the UK’s minimum wage of £8.91. He stated P&O is paying staff on international routes above the minimum International Transport Workers’ Federation wage and it will save the company half its crewing costs.

Likewise, his defence to the Commons Select Committee was that a “consultation process would have been a sham”, so P&O Ferries did not engage in one ahead of the shock redundancy of hundreds of staff via Zoom.

We can’t help but wonder if Hebblethwaite would really make that decision again considering the backlash that has happened? Is his statement to the Commons Select Committee justified? We shall see what financial affect this will have in the future for P&O Ferries, and whether indeed have they saved money by using controversial ‘fire and rehire’ tactics. It will certainly be more difficult for P&O Ferries to recruit willing new members of staff after previous employees have been treated so poorly – particularly on a lower wage.

P&O may be able to avoid tribunal claims due to jurisdictional requirements – namely that it does not fall within the remit of UK employment law and instead is subject to unique maritime laws. However, from a UK employment law perspective, these principals do not apply when it comes to collective redundancies, where 20 or more employees from the same business are to be dismissed within a 90-day period. Because the scale of dismissal is large, special rules apply.

From a UK employment law perspective, maritime law does not apply when it comes to collective redundancies.

The rules for collective redundancy

What are the rules for collective redundancy?

For starters, a full and thorough consultation should apply. By this, we mean if the employees are members of a recognised trade union acknowledged to conduct collective bargaining, then union representatives must be consulted with on behalf of the employees affected by the proposed changes.

In a non-union recognised business, employee representatives will be elected and they will consult on behalf of the affected employees. A business may already have appropriate existing representatives, or a process whereby these representatives will be elected should be conducted by way of a vote with the employees. Further individual consultations should be carried out with those who may be selected for redundancy.

In addition to the above, Section 193 (1) and (2) of the Trade Union and Labour Relations (Consolidation) Act 1992 states that notice must be given to the Secretary of State. Where 100 or more redundancies are proposed, (as in the case of P&O Ferries), the minimum period of consultation is 45 days. Notification is given to the Secretary of State by completing an HR1 form which would be located at www.gov.uk. Failure to notify can lead to legal proceedings and on conviction up to a fine of £5,000.

The consultation is conducted with a view of finding an agreement. It allows the employees and the employers time to consider ways to avoid terminating employment by way of redundancy. For example, representations may be put forward regarding reducing pay or working hours etc, which may have an affect in the number of employees at risk of redundancy. Typical areas of discussions with representatives would be discussed such as the rationale, numbers of employees at risk, methods and selection criteria considered when selecting those to be made redundant, time periods of consultations and how severance pay would be calculated.

A thorough, fair and transparent consultation in this way will avoid any potential claims at Tribunal. Unfortunately, P&O Ferries avoided all of these stages and jumped straight to the final step of announcing to their employees that they are being made redundant.

In response to Hebblethwaite’s statement, Transport Secretary Grant Shapps later tweeted: “However you try spin it, P&O Ferries has ripped up 800 workers’ rights and hung them out to dry. I’ve instructed a FULL review of our maritime employment laws and will be strengthening protections for seafarers’ minimum wages – I will share an update in the coming days.”

It will be interesting to see how this update and P&O Ferries’ money-saving methods play out over the next few months.

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About the author

Judy Simpson

About the author

Judy Simpson

With 15 years’ Human Resources experience, Judy has a wealth of knowledge across a diverse range of industries. During her career, she has used her strong negotiation skills to bring many difficult and unpredictable situations to a speedy and positive conclusion. HR consultancy often means ‘thinking on your feet’ for a prompt and best-possible solution. As well as specialising in employee relations for SMEs, Judy’s experience includes Working Time Regulations, apprenticeships, National Minimum Wage, Transfer of Undertakings Protection of Employees (TUPE), relocations, Learning & Development, Strategic Planning, and Change Management.

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